Thank you for attending DFS’s Free IUL/Annuity Leads Event. We hope that you found the workshop informative and worthwhile.
Our primary goals were:
- How to receive our FREE INDEXED LIFE & ANNUITY LEADS
- How to position yourself to sell more IUL than you could ever imagine
- The ULTIMATE annuity sales pitch and sales tool
- “Ticking Time Bomb” and working with high net worth clients
- The strategy for answering and overcoming any objection when selling IUL
- How to present annuity in a way that makes prospects WANT to own it
- A complimentary Software/Calculator that will help you close more IUL prospects
- Marketing/Prospecting programs to attract more annuity opportunities
- Award winning agent platform – SuperAgentTools.com
- If you attend, you will receive a FREE FINANCIAL PLANNING WEBSITE
There were many topics covered during the workshop and the presenters did an outstanding job of sharing their expertise with you.
You were a great group and your enthusiasm and positive spirit helped make our time together both productive and fun.
Thank you for your comments and suggestions on the evaluations and I assure you that each will be given consideration so that future workshops will be even more of a success.
If we can be of help in any way, or if you have questions, please feel free to contact DFS Marketing at 855-740-3140.
Again, thank you for being part of our Free IUL/Annuity Leads Event and I wish you the best.
Increase the death proceeds to your beneficiaries while spreading the tax impact on your qualified or tax-deferred holdings. Enjoy the security of access to funds in the event of a chronic illness. Earn index-linked returns while protecting your values from declining markets.
Sooner or later, your financial life may reach a challenging dilemma: to position your assets for a smooth transition to your beneficiaries, or to maintain access in case of certain health conditions during your lifetime.
WealthPay Life not only helps with either scenario, but provides the opportunity for a larger gift passed on to your beneficiaries.
Life insurance serves to protect your family from financial hardship in the event of your untimely death. More than simply death protection, WealthPay Life provides protection on a variety of levels.
- You protect your family with a death benefit greater than your premium payment.
- You may have access to the death benefit amount if the insured is diagnosed with a terminal or chronic illness.
- You may achieve policy-value growth through index credits linked to the growth of a market index –with downside protection when the index values fall.
WealthPay Life, from EquiTrust Life Insurance Company, offers a combination of two products to create what may be an ideal solution to your current circumstances. It combines an index-linked whole-life insurance policy and an annuity (a “single premium immediate annuity,” or SPIA). Upon purchase of both policies (for applicant ages 60 to 80), your lump-sum premium is directed to the SPIA, which immediately begins directing periodic payments to the life policy. From there, we do the rest – and you enjoy peace of mind.
Why periodic payments to the life policy instead of a single-premium payment?
This strategy is designed for individuals with either qualified retirement assets or non-qualified, low-tax-basis annuities – the proceeds from which they likely won’t need for living expenses during their lifetime; and for people seeking a simple, tax-efficient means to pass a larger death benefit from these assets to their heirs. If this describes your circumstance, and you were to liquidate your assets for purposes of purchasing a single premium life product, the liquidation would likely result in substantial taxation. Or, if the taxed proceeds are used to purchase an investment that can be passed on to the heirs upon your death, the proceeds may be taxed again, by inheritance taxes.
When you purchase a SPIA, you incur the taxation when the income is “paid out” – in this case, to the life policy in the form of premium payments. So, you can spread out the taxation over several years. And the policy’s death benefit may go to your heirs income-tax free!
What are the time-period choices for spreading payments from the SPIA to the life policy?
WealthPay Life allows premium payments from the SPIA to the life policy to be spread over 3, 5 or 10 years. The life policy is paid-up after all scheduled premiums are paid. A longer payment schedule allows you to spread your tax liability most effectively, but with a tradeoff of a reduced death benefit. Your age and underwriting classification will determine the payment-period options available to you. Regardless of the payment schedule you choose, you have the knowledge that if you were to die during the payment period and before the policy is paid up, your beneficiaries will receive the full death benefit and any remaining SPIA payments.
Your circumstances will determine if spreading out premium payments is more beneficial than a single premium option. While your agent can assist you in this evaluation, you should also seek assistance from your tax or legal advisor before purchasing WealthPay Life.
How does it work?
Consider this hypothetical example. Sharon, age 60 and retired, wishes to leave her son, Scott, a portion of her estate upon death. She previously named Scott as beneficiary to her 401(k) plan, valued at $100,000. Sharon does not need these funds for purposes of daily living, and would like both to increase the value of the gift to Scott and spread the income-tax liability he will likely incur upon receipt of the proceeds.
Sharon opts to transfer her 401(k) funds to a WealthPay Life policy and elects the 10-year payment option. This allows Sharon to reduce the immediate tax impact of moving the 401(k) funds by spreading the tax liability over the 10-year premium-payment period.
Upon her death, the WealthPay Life policy will provide a guaranteed death benefit of $191,236 to Scott. Because life insurance death benefits pass generally income-tax free to beneficiaries, Scott’s benefit will not be diminished by income tax.
Compare the benefit to Scott between leaving the
$100,000 value in the 401(k), and transferring it to a WealthPay Life policy.
What if you encounter an illness?
Your life policy gives you access to a portion of the Death Benefit if you (the “insured”) are diagnosed with a chronic or terminal illness. This benefit is called the “Accelerated Death Benefit,” because death benefits are “accelerated” to help meet health-related expenses during your lifetime. During the payment period, the Accelerated Benefits are limited to a percentage of the death benefit, subject to the payment period selected and the type of illness incurred. After completion of the payment period up to 100% of the death benefit may be accelerated. Accelerated Benefits may be received federal income-tax free.
What if you need access to your money?
Only money not needed to meet current and foreseeable living expenses should be placed in WealthPay Life. However, if you need cash, you may take either a loan on your policy, or a withdrawal that may be penalty-free in certain instances. Some WealthPay Life policies will be classified as a Modified Endowment Contract (MEC). Only policies with a 10-year premium-payment schedule will not be classified as a MEC. Generally, any amount received under a life insurance policy on an insured that is determined to be terminally ill or chronically ill is considered to be an amount paid by reason of death. A Terminal Illness benefit will generally be received income-tax free, and a Chronic Illness benefit may be taxable. You should contact a qualified tax advisor regarding taxability of Accelerated Death Benefits.
Can your policy value and death beneﬁt grow?
Depending on the index credits earned in your policy’s accounts, your cash value and death benefits may increase to levels higher than the guaranteed amounts. You may allocate to a fixed interest-rate account as well as several accounts offering index-linked returns based on the performance of either the Standard & Poor’s 500 Index® or the Goldman Sachs Dynamo Strategy Index.® When the index goes up, you earn “index credits”… and when it goes down, your account value is not impacted. In other words, you benefit from the “ups” and are protected from the “downs.”
Each policy anniversary, “index credits” are determined on the index accounts and applied to your policy’s current accumulation value. You may also transfer account values among accounts on policy anniversaries. At the end of 10 years, surrender charges no longer apply, yet you continue to earn interest and index credits on an income-tax-deferred basis.
EquiTrust Life Insurance Company
Note: This information is not intended to be a detailed description of the effect of taxes on Social Security benefits. Deferred annuities contain certain restrictions and/or IRS penalties related to premature distributions. Please consult with your tax advisor to determine the actual impact on your specific situation.
All written content is for information purposes only. Opinions expressed herein are solely those of MyRetirmentSaving.com / DFS Marketing, Inc. and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual financial professional prior to implementation. Insurance products and services are offered through MyRetirementSaving.com / DFS Marketing, Inc. and Julian Dougharty (TX License #1703718) and are not affiliated with or endorsed by the Social Security Administration or any other government agency. This content is for informational purposes only and should not be used to make any financial decisions. Exclusive rights to this material belongs to MyRetirementSaving.com / DFS Marketing, Inc. Unauthorized use of the material is prohibited.
Social Security FAQ: What You Need to Know
1- When Am I Eligible To Receive Benefits?
Depending on what year you were born, retirement benefits may begin as early as age 62 for partial benefits and as late as age 67.
- If you were born before 1938, your age for full eligibility is 65.
- If you were born after 1960, your age for full eligibility is 67.
- People born between 1938 and 1942 reach full eligibility age on graduating scale two months per year.
- People born between 1943 and 1954 become eligible for full benefits at age 66.
- Those born between 1955 and 1960 become eligible based on a graduating scale increasing two months per year, finishing with an eligibility age of 67 for those born in 1960 or later.
2- How Is My Eligibility Determined?
Social Security eligibility is based on “credits” that you earn from working. You usually need to have earned 40 credits in order to qualify. As of 2011 you earn one credit for every $1,120 in earned income per year, up to a maximum of four credits.
3- How Much Will My Monthly Benefit Be?
Your Social Security benefit is calculated by averaging the earnings from your 35 highest income years. The average monthly payment is $1,082. As of January 2012, the average monthly benefit was increased by 3.6%, which works out to an additional $467 per year or an average benefit payment of $1,549 per month. It depends on your unique situation. You can calculate your Social Security benefit at www.ssa.gov.
4- Must I Quit Working to Receive Social Security?
You can continue to work without negatively impacting your Social Security benefits once you reach your full retirement age. Prior to full retirement age you are permitted to earn up to $14,160. $1 is withheld from your benefits for every $2 in earnings over the limit. You may earn up to $37,680 in the year you reach your full retirement age, then $1 is withheld for every $3 in earnings over the limit until the month you reach your full retirement age.
5- How Does Social Security Work For Married Couples?
If you both have worked long enough to qualify for Social Security, you both qualify for full benefits. If your spouse’s earnings record qualifies them for a benefit from Social Security that is less than half of your benefit, their benefit will be increased to a rate equal to half of your amount.
6- What If My Spouse Dies?
Provided the surviving spouse has reached their full retirement age, they are entitled to 100% of the deceased’s basic benefit amount. Prorated survivor benefits are paid to surviving spouses who have not yet reached full retirement age. The survivor will receive the higher benefit amount if the surviving spouse was receiving Social Security benefits and the deceased’s benefits were greater.
7- Is Social Security In Trouble?
Social Security is a “pay-as-you-go” system, so money paid in by current taxpaying workers is spent to pay benefits to current retirees. As the ratio of current workers to current retirees drops, fewer people will be paying into the system while more will be receiving benefits. People are also living much longer than when Social Security began in the 1930s, stretching out the payments which millions of Americans will be receiving. While some fear the end of Social Security, it is generally agreed that the U.S. government will not allow the Social Security program fail. That, however, does not mean that the program will be able to continue in its current state. Legislators have increased the eligibility age for receipt of
full benefits from 65 to 67 for people born in 1960 or later. Reductions in benefits, additional increases in the age of eligibility, or both, will likely to be needed in order to get the program back on solid ground. Another possible, although unpopular, course of action is raising taxes to fund the system.
When Should You Apply for Social Security Benefits?
When to apply for Social Security benefits is one of the most important issues you will face during your retirement. Most people simply apply for Social Security whenever they decide to retire, instead of taking into consideration what age will give them the maximum lifetime benefit. But can they afford to wait? It depends. Navigating Social Security can be a complicated process so it’s critical to take the time to evaluate your specific situation with a financial professional whom you trust.
Should I Take My Social Security Benefits Now or Delay?
Every individual’s situation is different. The best timing depends on your financial situation, including a thorough evaluation of critical income needs versus luxury income needs. You may be able to delay taking benefits, or need them sooner, depending on whether you or your spouse is working. Understanding how spousal benefits work, and using strategies to maximize your benefits can save you thousands of dollars over a long period of time. At age 66 you will receive full retirement age (FRA) benefits, but you are eligible to receive 75% of your full benefits if you apply at 62. Also, if you delay the onset of benefits past age 66 you can delay until age 70 and actually earn 132% of your FRA benefits. The longer the primary earner delays, the more the monthly income will increase. Theoretically, if you begin receiving Social Security early, you will receive a smaller monthly benefit for a longer time, and if you delay, you will receive a larger monthly benefit for a shorter time. There are “break-even calculators” which can be use to figure out how long you would have to live to make delaying worthwhile. Consult your financial professional to assist in this process. Calculating spousal benefits can be more complicated. Married couples have to consider how the retired worker benefit, spousal benefit, and survivor benefit will affect benefits and life time maximums. More information is available.
What You Don’t Know Could Cost You Thousands in Lost Benefits…
After having paid taxes on your hard-earned income over dozens of years, did you know that you may face even more taxes on your Social Security benefits?
Prepare yourself: up to 85% of your Social Security benefits could be taxable.1 However, with proper retirement planning, you can reduce or eliminate your Social Security tax liability, saving you a significant amount of money in your retirement.
How to Avoid the Social Security Tax Trap
Avoiding taxation of your benefits can only be accomplished in a couple ways.
- First, you can reduce your overall taxable income
- Second, you can use tax-deferred savings options, such as annuities.
Discuss with your financial professional. When properly structured, tax deferred annuities can increase your income while reducing taxes on your Social Security benefits. Income distributions are subject to regular income tax, and any income taken before age 59 ½ are subject to a 10% federal tax penalty.
To learn more, Please call 855-740-3140
Source: (Athene Annuity)
Recently, we have all witnessed a dramatic change in the attitudes people have about their money. Investors have begun seeking ways to properly eliminate risk and preserve long-term, guaranteed growth. When people seek safety and protection, they often consider utilizing the services and guarantees of America’s insurance industry. For many years, people have considered annuities to be a safe haven for their life savings. The following is a brief outline that reveals some of the reasons annuities and insurance companies are so safe.
The US insurance industry is truly one of the tightest regulatory environments in the world.
Each state has a Department of Insurance (DOI) regulating insurance activity in their respective state. For example, if you live in Oklahoma, your DOI is keeping an eye on the operation and solvency of each insurance company that does business in Oklahoma. It is important to keep in mind that the same holds true if that same insurance company is approved to do business in another state. In other words, your DOI is not the only one watching over the insurer. Every state the insurer does business in has another DOI looking over their shoulder as well. This creates a truly remarkable level of oversight to catch potential problems well before they can get out of hand. The following is a short list of the key areas under
Capital & Surplus Requirements
Insurers use capital and surplus as a buffer to finance growth and pay for emergencies and other business commitments. Each state specifies a minimum dollar amount for required capital and surplus that each insurer must maintain.
Risk Based Capital Ratio (RBC)
This sophisticated formula allows regulators to evaluate whether the insurer maintains sufficient capital in relation to the relative risk within the insurers operations. Each year, the RBC levels for each company are reported to the National Association of Insurance Commissioners (NAIC) and the state where the insurance company is domiciled. These ratios are then compared to the standards set by the NAIC for monitoring. The NAIC prescribes action based on 6 categories within the levels of performance for the RBC Ratio.
Annual Statements are filed with every state where the insurance company is licensed to do business and a copy sent to the NAIC. This allows for a thorough annual review of overall solvency within the company.
Other Ratios and Formulas
The Insurance Regulatory Information System (IRIS) is a system that has been developed to monitor financial conditions and prevent insolvency within an insurer. There are a total of 12 financial tests performed within the IRIS. The Financial Analysis and Solvency Tracking (FAST) system was created for additional analysis of larger insurers. The FAST system is applied to review the insurance company’s financial status every three years. The FAST system reviews both current financial records along with a review of the company’s 5-year history.
As an additional safety net, each state has established a life and health guaranty association, which operates under the supervision of the state insurance commissioner. Insurers are required to participate in a state’s guaranty association in order to do business in the state. The association is responsible for funding obligations to policyholders should an insurance company be unable to meet the financial obligation. The members of the association are assessed fees to pay for obligations to customers. Guaranty funds have specific limitations on the amount they cover. These amounts vary from state to state. State laws ordinarily prohibit an insurer from using the existence of the guaranty association for the purpose of the sale of insurance and annuities.
Other Insurance Companies
In order to keep a safe distance from financial challenges, insurance companies work together to create an additional level of safety for policyholders. Many insurers actively pursue reinsurance through other insurance carriers. This further spreads the risk against the potential for a catastrophic financial dilemma to have a substantial impact on any individual company.
Today, many insurance companies specialize in a particular line of business. While this may skew their risk into specific types of areas, it can also provide another level of security. For instance, an insurer that focuses almost exclusively in the annuity business is not exposed by large natural disasters or unforeseen health circumstances. A well-managed annuity company can provide tremendous levels of safety and confidence by properly managing the funds in their care through a conservative portfolio of government issued and investment grade bonds.
Insurance companies are built to last. In Europe for example, you can find insurers that are literally hundreds of years old. This tradition of conservative asset management and well tested formulas for performance put insurance companies in a class by themselves.
Insurance companies today are measured in terms of the billions of dollars that they have under their care. This financial clout allows companies to weather the storms of time and keep the promises they have made to their policyholders.
Insurance companies are among the most closely monitored business entities in the United States. Most active insurers are scrutinized by ratings services such as Weiss, Standard & Poors, Fitch, and the premier insurance rating company, A.M. Best. Companies like A.M. Best do more than simply make sure the company is meeting the minimum standards for regulatory clearance. Most ratings services are measuring the amount that the insurance company actually EXCEEDS the minimum requirements.
This additional monitoring level cannot be overstated. Nobody thinks twice when a consumer asks, “What is that insurance company rated?” In fact, most agents don’t wait for the question to be asked. They often offer the current company ratings to the client because it is assumed that they expect to receive this type of information. Why? Because the insurance industry is safe and measurable to a high degree. Now think carefully; when was the last time you asked, “What is my bank rated?” or how about, “I wonder what the credit rating of my local stock broker is?”
The items discussed above are indicative of a truly safe environment for an individual’s long-term money. However, there is a risk that is often overlooked; the erosive nature of the personal income tax. Every American that earns interest in non-qualified CDs, checking accounts, money market accounts, bonds and other interest bearing vehicles must pay Uncle Sam a percentage of what was earned whether they used this money or not. Insurance products like annuities allow people to determine when, if ever in their lifetime, they are going to pay income taxes on their earned interest. This advantage can dramatically increase the amount of money people have available when they need it most.
Are insurance companies really safe? Absolutely! Insurance companies that follow the prescribed formulas, practices and traditions mentioned above can achieve a level of financial security for customers that other financial service entities can only dream of. Give us a call to evaluate if your current portfolio passes the safety test!