Phone: 631.730.8262
A holistic approach to underwriting made all the difference on one of our recent cases where we ultimately secured a win through reinsurance negotiation, improving the underwriting offer from Standard to Best Class and placing the case for $185,838 in target premium.
Drop me a note if you want to explore this topic further or give us a call (631) 730-8262!
#casesuccess, #lifeinsurance, #reinsurance
With the cost of capital increasing dramatically as interest rates have risen, many commercial loans now have terms that are far less favorable, if not punitive. Fortunately, clients with life insurance assets have access to a “refinancing” strategy that can provide relief from higher rates in the near term and a long-term management plan.
Drop me a note if you want to explore this topic further or give us a call (631) 730-8262!
#lifeinsurance #interestrates #bankloanrescue
The independent financial advisor has more competition than ever. Online options exist for virtually every type of insurance, many investment products, and even “advice” in the form of a roboadvisor. That said, those competitors lack one key ingredient: You.
Many insurtech platforms seek to effectively replace the advisor, believing that the consumer can be accessed directly, educated and motivated to apply for life insurance without seeking guidance from an expert.
That said, viewing this as an either/or question may be a flawed strategy. The forward-looking advisor must meet the consumer where they are, providing high quality educational content, a low-friction buying experience and the ability to connect with a professional if the need arises.
Drop me a note if you want to explore this topic further or give us a call (631) 730-8262!
#lifeinsurance #insurtech #advisorenablement
In today’s environment, many fiduciary advisors are turning to protection products such as fixed indexed annuities and fixed annuities to offset client portfolio risk.
That was one of the findings from Security Benefit’s Registered Investment Advisor Benchmark Study. The study looked into RIAs’ perspectives regarding client practices, economic sentiment, product diversification and the impact of the upcoming presidential election on the markets.
Security Benefit’s new research – conducted in partnership with Greenwald Research and DPL Financial Partners – uncovered the following key findings:
Equity allocations are on the rise more so than any other product allocation, with 51% of RIAs allocating more to equities in the last 12 months. Allocations to long duration fixed instruments (47%) and short duration fixed instruments (45%) also saw strong increases.
“An anticipated decline in interest rates coupled with the election in the latter half of the year may keep volatility high, however, RIAs are considering solutions with guarantees to weather this storm of uncertainty and build confidence among clients,” said Mike Reidy, national sales manager, RIA Channel at Security Benefit.
As the Federal Reserve has pushed back expected interest rate cuts, RIAs are eyeing multi-year guaranteed annuities to lock in current rates. MYGAs offer attractive accumulation potential for clients by delivering a guaranteed interest rate that is non-correlated with equities. One-quarter of RIAs who responded to the study said they have increased their clients’ exposure to fixed annuities such as MYGAs in the past 12 months.
FIAs offer downside protection and a range of indices, allowing RIAs multiple ways to position client portfolios ahead of a potential equity downturn. FIAs provide accumulation in the form of interest credits that are not linked to current rates, but instead the performance of financial indices. Although 30% of RIAs said they do not use FIAs in their practice, one-third (34%) of RIAs said they actively use them and another 11% noted they are familiar with FIAs and intend to use them in the next six months.
“Clients are prioritizing risk protection more so than maximizing gains,” Reidy said. “That protection theme is a trend we’ve been seeing especially over the past two years.”
RIAs may have had some misconceptions about annuities in the past, Reidy said, and one of those misconceptions is that annuities are complicated products. “But the products we are offering in the RIA space are very straightforward. They don’t necessarily have all these bells and whistles. We try to keep the fees low.”
Security Benefit’s research also found that an increasing percentage of RIAs are concerned about the potential of geopolitical events affecting the financial markets in the second half of this year.
“That’s one of the reasons why I think that whole safety issue is on our side, because if something goes wrong, if inflation spikes again or maybe we don’t see interest rate cuts or if interest rates go up, advisors are listening to their clients’ concerns and telling them that risks are still out there but we do have products that can protect them,” Reidy said.
While many RIAs were quick to adapt their practices to changing client needs during the COVID-19 pandemic, some things have largely stayed the same, including how RIAs attract new clients.
Asking for referrals remains the most important strategy to attract new clients, according to 52% of respondents. This was followed by networking at 19%, and specialized marketing to a specific niche client at 9%. In-person meetings have returned since the pandemic, with two-thirds of client meetings occurring in-person versus 40% of meetings held virtually.
When it comes to buy-sell planning, the goal is to find a balance between flexibility, tax efficiency, and keeping things simple. For buy-sell agreements, this balance is even more crucial since smooth, well-funded, and tax-smart ownership transitions make all the difference.
Interested in learning more? Give us a call (631) 730-8262!
#buysellplanning #successionplanning #crosspurchase #stockredemption
Exciting news—Symetra SwiftTerm life insurance can now be owned by businesses, effective Oct. 31! Help your clients secure buy-sell agreements and key-person coverage quickly and easily.
Interested in learning more? Give us a call (631) 730-8262!
#lifeinsurance #swiftterm #buysell #keyperson
In a recent case, we were working with a husband and wife, both 66-years-old, who were seeking a funding solution as part of their Care Planning strategy. Both clients had extensive medical histories, with multiple conditions presenting both mortality and morbidity concerns, yet we were able to find a carrier to approve as applied for with robust benefits.
Interested in learning more? Give us a call (631) 730-8262!
#casesuccess, #lifeinsurance, #longtermcareinsurance
A well thought out, formal agreement with proper funding can still accomplish the owner’s goals for the business upon their retirement, disability or death. We’ve all heard the stories of businesses without a plan in place, and one of the frequent causes is the lack of a clear successor. That, like so many other things in our business, can be overcome with the right planning. The most effective approaches address both the planned and the unexpected triggering events and can employ the leverage of life insurance to create or augment a funding strategy.
Interested in learning more? Give us a call (631) 730-8262!
CLIENT CONCERN
During a policy review, you come across an existing policy that a client purchased many years ago. It has accumulated significant cash value. However, you see that loans have been taken from the policy to pay for the premiums and/or to fund cash withdrawals. Those loans, combined with higher mortality costs and high loan interest charges, have subjected the policy to a potential unintended lapse.
If this scenario fits the client’s current life insurance policy, the client has three courses of action to choose from:
In recent years, private placement life insurance has emerged as a strategic tool for affluent individuals and families looking to optimize their investment strategies and enhance their wealth planning.
The 2024 PPLI Market Report, researched and written by Life Insurance Strategies Group and Lion Street, reveals that new annual policy premiums for PPLI more than doubled after the enactment of Consolidation Appropriations Act of 2021. This law changed the definition of life insurance to permit, in most situations, for accumulation life insurance policies to receive upward of more than two times the amount of premium for the same required amount of death benefit. In effect, this “supercharged” the wealth planning benefits of PPLI.
This financial product is available only to qualified purchasers and accredited investors. It offers a range of benefits that cater specifically to the unique needs of high net worth individuals. For many, PPLI is a singular tool that combines both tax-efficient investment growth with legacy planning.
PPLI is a variable life insurance policy designed for affluent clients involved in wealth and estate planning. Unlike traditional life insurance policies, PPLI allows policyholders to invest in a variety of highly tax-inefficient assets – including alternative assets, private equity and real estate – within the structure of an insurance policy. These investments grow tax-deferred, and the death benefit is typically paid out income tax-free to beneficiaries.
Affluent individuals often have substantial investments in assets that can generate significant taxable income. These include hedge funds and private equity, which can produce high levels of ordinary income and short-term capital gains, subjecting investors to high tax rates. By incorporating these assets into a PPLI policy, investors can significantly reduce their tax liabilities through several product benefits.
Beyond the tax advantages, PPLI provides several additional benefits that can enhance overall wealth planning strategies. Frank Seneco is president of Seneco Global Advisors, a life insurance provider in the ultra-high net worth space and works with both U.S. families and foreign families with U.S. ties in incorporating PPLI into estate planning. “For families that have wealth earmarked for future generations, PPLI can be used to protect these funds from tax erosion during an insured’s lifetime and then to pass the investments to children and grandchildren as part of an income tax-free death benefit,” he said.
A strategy gaining popularity is intergenerational planning using PPLI.
“There are a number of affluent families where the adult children of the patriarch and matriarch are well-off and where the benefits of PPLI can be positioned to benefit the third and future generations,” said Jordon R. Katz, President of JR Katz, a provider of life insurance solutions in Chicago. “In these situations, it is common for PPLI policies to be purchased on the lives of the second generation where the policy proceeds could be used to assist their children and grandchildren. It is likely these policies will be in place for 50 years, meaning the power of tax-free compounding within the policies can be dramatic.”
Katz warned that there are risks with PPLI.
“Generally, there are no performance guarantees with this type of policy and that means a policy could suffer from poor investment management experience, resulting in not being able to use the policy to fully meet planning goals or even the policy lapsing,” he said. As with any planning strategy, those considering PPLI should consult their entire team of legal, accounting, investment management and life insurance professionals.
Although life insurance company guidelines permit PPLI policy premiums of less than $1 million, it is recommended that policyholders commit no less than $10 million to be paid into a policy as quickly as possible in order to optimize policy performance and benefits.
“The math needs to work,” said Seneco. “There are costs involved in buying PPLI that must be outweighed by the performance of the policy over what will probably be decades. In early policy years, there are significant charges associated with the amount of death benefit that must be purchased and then there are on-going investment management expenses, though, these fees are similar to what a policyholder would experience in a taxable account.”
With the right guidance, PPLI can become a cornerstone of a tax-efficient legacy plan.
Interested in learning more? Give us a call at 631-730-8262 or Click to schedule a 15 minute call
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Port St. Lucie, FL 34987
Phone: 631.730.8262
Fax: 866.275.7847
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