Thank you for attending DFS’s Mega Meeting

 

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.

Your Financial Life May Reach a Challenging Dilemma

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.

 

Sources:

EquiTrust Life Insurance Company

http://dfs-marketing.com

http://myretirementsaving.com

 

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.

 

 

What is your investment comfort zone?

life insurance and annuity marketing

Think of it this way: Everyone has a comfort zone when it comes to weather. Some people like the hot temperature of the south; some like the cooler, wetter climates in the northwest; still others would rather have a seasonal variety, like you get in the north. It can be similar with your investment comfort zone. There is no single answer that’s right for everyone. It’s what you decide is most comfortable for you. To understand your investment comfort zone and the type of investor you are, you’ll need to consider where you are in your life, what goals you want to accomplish in retirement, and what level of risk you’re comfortable with in your portfolio.

Knowing your investment comfort zone matters.

Understanding the type of investor you are is particularly important for a number of reasons:

  • If you’re too complacent, you may be ignoring risk.
  • You need to recognize when risk is increasing or decreasing.
  • If you’re an uncomfortable investor, you may allow your emotions to take control of your decisions.
  • You want to minimize the possibility that you may need to make difficult decisions under pressure.

The three primary types of market investing

Investing in the market always involves a level of risk. That’s why it’s essential for you to know how much gain or loss is acceptable to you, and what level of risk you’re comfortable with.

Remember, there is nothing fundamentally better about being a risk-taker or risk-advisor. Sometimes the greatest risk is taking no risk at all. Understanding your risk tolerance as well as your overall objectives and goals can help determine the type of investment that is appropriate for you.

Generally people think of three main types of investments: stocks, bonds, and cash or cash equivalents. All of these types of investments have advantages and disadvantages, depending on how the market is reacting at a particular time period. Whichever investments you choose, you need to consider the opportunities for gains, losses, liquidity, tax advantages, and consequences.

Stocks

Although stocks may give you the opportunity for bigger gains over time, they can also be the most volatile. To most investors, particularly those who invest in equities, volatility is something to be aware of. The stock market can change from year to year and can be volatile, as the chart below displays. Most of us recall the “Lost Decade” from 1999 to 2009, when investors saw the S&P 500® Index drop more than 40% at the height of the 2008 financial crisis.

When the markets are volatile, the typical reaction is to want to get out of the market altogether and move your money into safer alternatives. But if you had done that following the 2008 market crisis, you would not have captured the rebound in the market the following years.

When determining your Investment Comfort Zone, think about: What is your time horizon (the amount of time before you’ll need your money)? What is your plan if the markets go down? Ask yourself, how is your portfolio protected?

Bonds

Bond funds have been solid investments in a retirement strategy for many years. As fixed income investments, bonds help provide diversification, stability, and tax benefits to almost any portfolio.

Generally speaking, people tend to avoid the risks they are aware of. That’s why, in recent history, people have sought to reduce their exposure to losses caused by volatility by switching from investing in the stock market, to investing in the bond market.

And while bonds are generally seen as a safer alternative, they are susceptible to a different kind of risk, due to their inverse relationship to interest rates. With interest rates currently still near historic lows, bonds can offer higher returns, making them more desirable to investors and driving bond prices higher.

But as the graph shows, we’ve had three decades of a general decline in the baseline for interest rates. Now interest rates can’t go much lower- and when they begin rising, the value of existing

bonds moves in the other direction. Your bonds would then be worth less in order to keep the returns they offer competitive with the higher interest rates of newly issued bonds.

So if you’re holding a disproportionate amount of your retirement assets in bonds, you may have more risk in your portfolio than you realize. While bonds should continue to be part of a well-balanced portfolio for most clients, you need to be aware of how a rising interest rate environment could affect your portfolio.

Cash and cash equivalents

We all know how important it is to have some money in a savings account or short-term investment such as a money market account. By keeping money liquid (i.e., as cash, or as an asset that can be quickly converted into cash), it will be available at the time you need it. But it is also important to discuss how much is enough, and when an amount of cash might negatively affect your accumulation goals.

As you can see, the value of a dollar is projected to erode due to the effects of inflation over time, so you need to consider this potential “cost” versus the convenience and relative safety of holding assets as cash.

So while cash can play a role as a part of your retirement plan, cash alone will likely not help you reach your financial goals. Given this, it might make sense to balance your portfolio by shifting some low-earning cash to investments with higher growth potential.

Emotional investing

A 2013 Psychology Today article discusses economic research and emotional investing. Specifically, that emotions play a significant role in how people make financial decisions. But one of the most common mistakes investors can make is to let emotions guide their investment decisions. That’s why it’s important to understand the impact that emotional investing can play in your investment decisions. Because investors tend to focus on short-term gains and losses, emotions can run high in both directions. When the market is up, we are all relaxed and confident in our investments. But when the market goes down, anxiety can set in and our first reaction is to pull out our money from the market and move it to a safer place.

When we act on this impulse, we are allowing our emotions to make our investment decisions. Remember, the ability to “time” the market- to predict which direction the market will move at a point in time and invest accordingly- is virtually impossible. (If it was more possible, we’d all be rich.)

The investment cycle as emotional cycle as shown on the graph below, people typically get most excited about investing when market prices are at their highest.

You could think of it as the “overconfident” stage, but it can also be the stage of greatest risk. Because this is the market’s high point, as it starts going down, investor confidence often follows, giving way to nervousness and worry.

People may tend to wait it out for a while, but as panic and discouragement set in, they may decide it’s time to get out of the market. By shifting their investments into cash, the thinking goes, they can avoid additional market downturns.

Unfortunately, by exiting when prices are lower (or even at their lowest), they’ll lock in their losses – meaning they’ve given up their chance to regain value when the market starts rising again.

Are your emotions driving your investment decisions?

After you have made your plan for retirement, and the market inevitably goes up and down, will you be willing to stay the course through the highs and lows? Or will you overreact to the market and make decisions based on emotion?

Rebuilding your assets after a big loss takes time. It’s simple mathematics: the more value you lose, the more you’ll need to gain back in percentage terms to fully rebuild from your losses.

Always keep in mind that the decisions you make may affect not just your portfolio’s total value, but can also impact your timeline for retiring. Make sure you have enough time to recover from any market correction to meet your goals.

Finding your personal Investment Comfort Zone

Understanding your Investment Comfort Zone begins by working with your financial professional and reassessing it on an annual basis.

The type of investor you are takes into account your financial goals, your time horizon, and your tolerance for risk. And just because you think you are one type of investor today doesn’t mean you can’t change over time as your needs, goals, or attitudes change.

When determining your Investment Comfort Zone, here are some points to consider:

  • What accumulation goal is necessary to meet your future retirement needs?
  • What financial changes could change your Investment Comfort Zone?
  • What mix of investments is suitable to achieve your retirement goals?
  • Have you taken on an unnecessary amount of risk to reach your goals?
  • Can you maintain financial discipline when you are faced with changing market conditions?

 

Source:

Allianz Life  https://www.allianzlife.com/

Bond Volatility

DFS Marketing Inc. Insurance Marketing Organization

THE WALL STREET JOURNAL

Buried deep in section D, Page 13*, you would uncover an outstanding article that clearly reveals a universal truth about bonds. “Many investors looking for safety and higher returns might falsely assume bonds are riskless investments, not realizing that even a modest increase in interest rates would take a serious bite out of fixed income values.”

Who’s making these statements?

The 2nd largest bond fund manager – The Vanguard Group.
Vanguard realizes the folly of many investors who do not understand they can lose principal if interest rates head higher. Vanguard rightfully warns investors, “…the value of a long-term bond fund might fall 20% if rates went up just two percentage points.”

 

In spite of these warnings and the fact interest rates are near historic lows, investors continue to flood money into risk laden bond funds. It is important to know this financial principle: Rising interest rates reduce bond values. It is a hard cold fact.
Author Ken Little from “About Money” is well aware of this relationship between rising interest rates and loss of bond value. He clearly states, “The biggest economic threat to bonds is rising interest rates.”
(Source: http://stocks.about.com/od/bonds/a/11-30-2012-Investors-In-Stock-Market-Need-Bond-Protection-Strategy.htm)

Do you believe interest rates are heading higher in the future?

Let’s examine an easy to understand example…

Imagine a bond was issued for $10,000. It has a five year term with a 5% coupon or interest rate, paid every six months.
Then, let’s imagine the market interest rates rise from 5% to 6%. If you want to sell this bond, would anyone buy it from you when it is paying 1% below market rates (5% vs. 6%)? That buyer could go elsewhere and just buy a 6% bond.
To get your bond sold, you will need to sweeten the deal so the buyer gets a competitive rate for buying your bond.
The problem is, you cannot change the interest rate on your bond. That’s locked in at 5%. What you can do, however, is change the price you will accept for your bond.
Here’s how you do it! Reduce your price so the annual interest payments of $500 ($10,000 x 5%) must equal a 6% payment.
This is called selling at a discount. To get the buyer a market rate of interest (6.0%), you must sell your bond at a discount for just $8,333. Now, the $500 fixed interest payment equals a 6% yield for the buyer of your bond…

 

 

 

 

 

While interest rates only rose by 1% in this example, your bond value reduced by a surprising 16.67%.

As an alternative, you may consider the safe haven provided by traditional fixed rate annuities. In most fixed annuities, the insurer accepts the market risk allowing the annuity owner to enjoy true safety and tax-deferred growth. Or consider the opportunities created by a Fixed Indexed Annuity. These innovative products provide you the potential to exceed traditional fixed interest rates without exposing your principal or past interest credits to market risk.

 

 

*(Source: The Wall Street Journal, March 19, 2003, Section D, Page 13)
“PLEASE NOTE: This is just an example to illustrate the relationship between interest rates and bond prices. It does not represent an actual computation. To do this calculation correctly would require a more complicated process and the answer would be different. However, the seller would still have to discount the face value of the bond to compensate for the interest rate difference.”
(Source: http://stocks.about.com/od/bonds/a/11-30-2012-Investors-In-Stock-Market-Need-Bond-Protection-Strategy.htm)