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.
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!
You’ve Done the Work. Now Enioy the Ride.
You worked hard. From saving up for your first car to building up your nest egg, you put in the time and the energy to prepare for what may lie ahead. And, now you have earned the opportunity to enjoy your golden years.
As you look forward and consider your retirement, you want financial solutions that provide savings protection and future growth potential. Fixed indexed annuities with a Lifetime Income Benefit Rider can offer you guaranteed income for life, tax-deferred growth and flexible payout options.
That way, with the right plan, you can spend more of your golden years enjoying your accomplishments while knowing your money is there for you when you need it.
Lifetime Income Benefit Rider (LIBR)
We are living longer lives and enjoying longer retirements. This means you have more time
to spend with your family, more time to travel, and more time to enjoy your milestones.
We believe that longevity should be celebrated. That’s why products has been designed with income you cannot outlive.
A Retirement Paycheck
Lifetime Income Benefit Rider affords you a consistent paycheck, so that your retirement is focused on what you want to do and not what you wished you could have done.
When you purchase the Lifetime Income Benefit Rider, you are guaranteed an income stream for the rest of your life. You will know the guaranteed minimum you will receive on a monthly, quarterly, semi-annual or annual basis.
The amount you receive is determined by a few simple factors:
- Your Age – when you decide to begin taking income from your contract
- Your Payout – whether you want income for as long as you or you and your spouse live
- Your Timing – the longer you wait to take income, the higher the payouts will be
- Offers income you cannot outlive
- Provides a steady paycheck throughout retirement
- Allows for spousal income benefits
Key Annuity and Lifetime Income Benefit Rider Terms:
Annuitization – Conversion of accumulated value of your annuity into regular guaranteed income payments.
Contract Value -Value of the funds in your Base Contract.
Income Account Value (IAV) -This value is used solely to determine the amount of income you will receive under this Rider. It is not a traditionally accessible value. Instead, this serves as a measuring value tool for purposes of the Rider only.
IAV Multiplier -An annually declared factor used to calculate your IAV credit for the Indexing Income option.
IAV Period -The period of time during which the Income Account Value is credited the Income Account Value Rate.
IAV Rate -Annual effective interest rate that is applied to the Income Account Value.
Index Credit -The amount credited to your Contract Value based upon the performance of the index allocation selected.
Lifetime Income Benefit (LIB) -The amount of income you will receive should you elect to take payments. It is based upon your IAV, gender and age at the time of election.
Reset -The IAV Period can be reset once during the contract for most options. There are two situations when this may be advantageous:
- At the end of the initial IAV Period, if lifetime income payments have not begun.
- If the Contract Value is higher than the IAV.
Joint Life Payout – A legal spouse, as defined under federal law and at least 50 years old, payment is based on the age of the younger joint payee. Payments are made through the life of the last surviving spouse.
Rider Fee -The fee charged for this Rider, if applicable, is deducted from your Contract Value each year as long as the LIBR is active. This fee may change at time of Reset.
Single Life Payout – Payout factors determined based on your age at the time of payout election.
Surrender – Full or partial distribution of contract values.
Surrender Charge – Fee charged, when applicable, for full or partial distribution.
How Annuities Work for Your Retirement
An annuity is a Contract purchased from an insurance company to help you accumulate assets for retirement.
This means your Contract guarantees are backed by the financial strength and claims paying ability of insurance providers and Your funds are safe and secure.
Fixed Indexed Annuity
Indexed annuities are fixed annuities that provide an opportunity to potentially earn more interest than traditional fixed annuities and other safe money alternatives. This is done by basing interest earned on an increase in an equity or bond index.
While the value of this Contract may be affected by an external index, this annuity does not participate directly in any stocks or equity investments. You are not buying shares of stock or an index. Your money is protected from market volatility so that a down market does not subtract from your principal.
A primary advantage of indexed annuities is the opportunity for growth by allowing your savings and interest to grow tax-deferred. Unlike taxable investments, you pay no taxes on your annuity interest until you begin to take withdrawals or receive income. This allows your money to grow faster than in a taxable account.
Source: American Equity