Hit Your Year-End Targets

You've worked hard all year and year-end deadlines are approaching fast. So you will want to make sure everything is submitted in good order to minimize delays.

To help keep you on track, we have put carrier deadlines on our website's MVP Events Calendar, and we encourage you to contact your office/representative for help with any particularly difficult situations. 

Use these helpful reminders and tips too:

1. Clearly identify any premium mode changes in a cover letter.
2. Make sure all changes are initialed by the policy owner.
3. Contact MVP to determine if the policy change will require a reissue.
4. Submit all pages of delivery requirements and applicable supplements.
5. Make sure the correct signature and title are on trust- or corporate-owned policies.
6. Double check that all policy owner's signatures and your own agent signature with dates are filled in.
7. Include policy numbers(s) on checks and clearly indicate if premium is to be split among multiple policies.

We Have an Obligation?

November is Long Term Care Awareness Month. Many people don't understand what it is, what it does or why they would need it. As an adviser, you should be using this month as your opportunity to start educating your clients and prospects about the importance of including this vital coverage in their financial plan.

• 70% of people over the age of 65 will need some type of long term care at some point in their lives.1
• 85% of people don't have a plan for covering long term care costs that are likely to be in their future. 2
• The projected average cost for 3 years of long term care 30 years from now is $750,000. 3

Big players in the LTC insurance market are currently requesting significant premium increases on some blocks of their in-force business. John Hancock is requesting an average increase of 25% on half of its in-force business while Genworth Financial is seeking up to a 13% increase on in-force business purchased in 2003 and 2012. Many of the LTC policies issued in the last 20 years were incorrectly priced and are still in-force. Now these blocks are older and applying for benefits. The problem is that carriers didn't anticipate that people would actually keep their policies. Current low interest rates aren't helping either because carriers use their return on bond portfolios to help pay claims.

When a rate action increase happens, policy holders generally don't drop their coverage. If they can't return to the market for a new policy, they either pay the extra cost or they cut benefits, like inflation protection, to keep the premiums down. The attitude is that some benefit is better than no benefit at all.

LTC benefit riders are gaining in popularity. These hybrid life insurance products that contain benefits for long term care can be an affordable way for individuals to "kill two birds with one stone" and still get the coverage they need. Help with long term care costs if the insured gets sick and lives a long life, and a death benefit paid to the designated beneficiary when the insured dies.

It's never too late to get the conversation started and every financial plan should include a long term care analysis. Whether it's a stand alone long term care policy or a hybrid life insurance plan, you have an obligation to your clients to broach the subject.

Long Term Care Awareness Resources
Maximizing the LTC Insurance Market



1. U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008.
2. John Hancock’s online survey conducted September 2011 by Mathew Greenwald & Associates, Inc.
3. Based on John Hancock’s Cost of Care Survey, conducted by LifePlans, Inc., 2011 and an assumed rate of inflation of 4.1% based on the average annual increase in the Consumer Price Index for All-Urban Consumers (CPI-U), obtained from the Bureau of Labor Statistics of the U.S. Department of Labor, for the 50-year period ending 12/31/10.1

This Electronic Age we Live in

It's everywhere we look... iPhones, iPads, computers, our TVs and even in our cars. Love it or hate it, we are living in an electronic world. Our industry is no different. We have the ability to quote, write and deliver life insurance electronically from just about anywhere. We have QuickApps, e-Apps, iGo and ePolicy. If we choose, we don't have to pick up a pen or print out an application ever again.

Choosing to conduct your business electronically may sound too high-tech or even confusing, but e-Apps are the faster, easier way to submit your business with MVP carriers in today's electronic world. You can become more effective and efficient AND increase your revenues.

Don't Waste Another Minute Completing an Application by Hand! With easy access from your desk/lap top or smart phone/tablet, e-Apps are your ticket to success.

On Thursday, October 17, we want to show you how to shorten cycle times, improve your placement ratio and enhance your revenue, and we will do this in just 30 helpful minutes.

Just join our WebEx at 8:45 AM CT on Thursday, October 17.

We Still Have a lot of Work to do

It's already the middle of September and you have probably heard by now that September is Life Insurance

Awareness Month (LIAM). You know...that industry-wide educational campaign designed to encourage everyone to take a serious look at their life insurance needs?

This year's celebrity spokesperson is retired NFL quarterback, Boomer Esiason. At the age of only 7, his mother died of cancer and did not have any life insurance. “I was handed a life lesson early, growing up with one parent,” says Boomer, “It wasn't the easiest life—my dad sacrificed a lot.” It's because of his own experience that he knows how important life insurance is for his family and he wants you to know that if something happens and you haven't done the planning, the people you leave behind will feel the brunt of your mistakes.

View the important LIAM message from Boomer for insurance professionals on MVP's home page or on our You Tube Channel.

Despite this industry-wide campaign and our day job, 85% of Americans say most people need life insurance, yet only 62% have coverage and those that have it, don't have enough. This is why what we do is so important! Helping families plan for something is better than nothing and it's very apparent that we still have a lot of work to do.

If you haven't gotten started yet, it's not too late, and it's momentum can carry you through the end of the year. Get LIAM Campaign Resources here

Prevent What Can Go Wrong with Insurance Exams

Most of us take insurance examinations for granted until something goes wrong. Very often we discover with very little effort that we could have avoided the problem in the first place if we had just taken the time to prepare our clients. Here's some information for you to pass on to your clients to help them get the best insurance classification and also have the best experience when preparing for their paramedical exam.

Tell your client to avoid strenuous exercise for 12 hours prior to the exam. Strenuous exercise, such as training for long runs can put stress on the liver and kidneys and negatively affect the lab results for liver function levels.

Remind your weekend warriors to avoid taking pain killers, such as Tylenol, Ibuprofen, etc., as these also can raise the liver function levels.

Fasting is no longer required by our carriers BUT, a good rule of thumb is no food for up to six hours prior to the exam. The food intake, while having no effect on the cholesterol, can elevate the glucose and triglyceride scores. It's also a good idea to limit salt and high-cholesterol foods 24 hours prior to the exam.

Drink a lot water the day before the exam and one glass about an hour before the test. Water is our natural purifier and will help flush impurities from our system. Avoid caffeine and nicotine prior to the exam too, as they can increase our blood pressure.

It's also a good idea to avoid drinking alcoholic beverages at least 12 hours prior to an exam and to get a good night of sleep the night before.

Share this video with your clients: How to Prepare for Your Life Insurance Exam*
or this brochure: Preparing for a Paramedical Exam*

Here's some interesting facts to share with your clients: The Center for Disease Control predicts that half of adult Americans will be obese by the year 2025. A high majority of those people will suffer from diabetes and 25% of those people will be unaware of any health problem. Perhaps we won’t be living as long as we think and life insurance might just be a valuable asset?

*MVP Financial Services, Inc. does not endorse any one or particular paramedical exam service.

MVP Welcomes Thorp Brokerage Resources

MVP is extremely excited to welcome Thorp Brokerage Resources (TBR) to our team!

Adding a sixth office in Edina, MN to our Midwest territory extends our reach and broadens our commitment to helping agents find solutions for their customers.

Gary and Scott Thorp and Pam Silverman have been providing hands-on care and management of agent cases since 1979. Like MVP, they are a founding partner of American Brokerage Centers, LLC, a national brokerage agency partnership dedicated to enhancing their producers' position with core companies.

As TBR makes their transition to MVP Financial Services, Inc., we know that this is going to be a wonderful new partnership for building strong relationships dedicated to helping place and protect your business and independence.

Click here to contact our newest MVP office in Edina, MN.

Indexed Universal Life: Hot or Not?

Lately you cannot work in this industry without coming across the latest buzz product: Indexed Universal Life (IUL). You certainly know the term, but how much do you really know about it and should you be

Many Indexed UL products base their credited interest on the S&P 500.

selling it?

IUL products combine life insurance with cash accumulation linked to stock market performance. It gives policy owners downside protection, and significant income tax advantages. According to LIMRA, the IUL market has grown from $330 million in 2006 to $1.5 billion in 2012, and IUL sales make up 30% of overall UL premiums.

Illustrations wars may not lead to the best carrier for the client long term if today’s leader is tomorrow’s dog due to lowering of caps on inforce policies or increasing mortality costs etc. We have all been through the days of under-performing products (UL, VUL or WL) due to returns that were much less than projected.  Is it possible that IUL could be tomorrow’s under-performing product?

MVP has developed a certain comfort level with the indexed strategy based upon the fact that no year can be less than zero. On the flip side, you can experience a year as high as 12.  On one product's indexed model, a 20-year historical rolling period doesn't have a single period that was less than 7.47%.  Unlike the VUL product, you don’t have a negative year where the client gets too scared to put his next premium into the policy. The biggest detriment to any plan using life insurance to save money is one where the client stops funding it! It is the kiss of death for the future cash values or income stream.

Learning from the past, we need to illustrate at an alternate return assumption that is lower than the historical average to make sure the plan works. We need to promote it as a product to be used with a high level of premium relative to the death benefit. If the client needs more coverage, they can buy a term policy in addition to the IUL. Let the money accumulate for a 20-year period to get an IRR on cash that is only between 1 to 2% lower than the illustrated gross rate. Monitor the cash values as you go and let the carrier's concierge team help keep track of it. Unlike the under-performing policies of the past, there are over-loan protection riders to guard against the tax time bomb on an income strategy. Products have tools in place now that were not available in the past to make sure the plan works for the client.

IUL products fit the best in the Mass Affluent Market where the client has already maxed out their 401(k) and makes too much money to do a Roth. Remind these clients that the cash values have creditor protection (depending upon the individual state’s laws). Your Doctor, lawyer and business owner clients will love it.

Spring-Time: Policy Review Time

According to the calendar, spring has sprung. Although with a foot of snow still on the ground and temperatures still hovering around freezing and below it really doesn't feel like it yet here in the mid-west.

We often think of spring as a time of new beginnings, or a re-birth... the days are getting longer, and it's a time to step up business and get busy living!

That brings us to policy reviews. What does that have to do with spring? Everything! Helping your clients to ensure that their insurance coverage is still adequate is a very important part of your job, and if you haven't already, you should make it a part of your business plan. If you aren't doing it, it's quite possible that some other, savvier professional will do it for you.

The policy review process facilitates an examination of how your clients’ needs have changed (income, marriage, divorce, health, education retirement etc.) and how their life insurance policies have performed since the coverage was purchased. It should include a review of policy ownership, beneficiaries, riders and any applicable sub-account allocations as well.

If you don't know how to get started, MVP can help. Check out our website, www.mvp4me.com, or give us a call.

 

Sooner Rather Than Later: Women Can Expect to Pay More Premium for the Same LTCI Coverage

Gender based differences in pricing for life insurance is the industry norm. To regain profitability, the LTC industry is looking to do the same. According to the American Association for Long Term Care Insurance, female policy holders accounted for nearly two-thirds of the $6.6 billion of LTC insurance claims paid by the industry just last year.

Now is the time for your women clients to purchase LTCI. It is anticipated that before year-end, gender-based pricing will become the norm for the LTC industry. A female policy, with comparable benefits and age to a male policy, is expected to be as much as 20-40% more in premium than the male policy. You already know that women tend to live longer than men, hence they tend to need extended long-term health care more often than men do. So, the risk is larger for women and the LTC industry premiums will begin to reflect this fact.

A spokesperson for a leading LTCI carrier has said that they expect gender-based pricing to take effect as early as next month with their introduction of a new product. The change to gender-based pricing would not effect current policy holders.

So if you have women clients that are considering LTCI, there is truly no better time than the present to make that purchase.

Address the Needs of Unmarried Partners

According to the 2010 US Census Bureau, traditional married couples were 78% of households in 1950. As of 2010 traditional married couples represented less than half of households. Couples that aren't married can't take advantage of the many tax and retirement benefits established for traditional married couples, but they still have a number of effective planning tools at their disposal to reach their retirement and wealth transfer goals.

For example, use life insurance to create a virtual marital deduction. A policy insuring one partner may be designed to pay death benefits directly to the surviving partner. Considering life insurance in this way may add new opportunities to your prospecting.

Since people form many different types of committed relationships and many of them today don't involve a marriage contract, the ING Life Companies has created three new consumer brochures to help you work in the unmarried couples market. You can choose from different versions that address a specific market for unmarried heterosexual, female and male partners. View Modern Solutions for Today's Modern Family from ING.

Let's Stop Complaining?

It's already February, the election is over and we have run into a wall, not over a cliff. Let’s take some control of our own lives and stop blaming everyone else. If we started to save more of our own money, we would have more freedom. Freedom from bad jobs, no jobs, bad decisions, more taxes and even our children moving back home. We could prepare for retirement, maybe even retire sooner, and not burden our families with the possibility that we might live too long and get sick.

Let's take a person age 50 that needs $500,000 of life insurance in the event he dies in the next 20 years. Could he die within that time frame? Of course. Will he? Probably not. Since he doesn't want to die, the insurance company doesn't want him to die and hopefully his family doesn't want him to die, let’s bet with the insurance company that he won’t, and guarantee to give him all his premiums back at age 70 if he lives?

The premium is $4,100 per year. We don’t think the insurance company would take the risk of $500,000 in death benefit for that premium if they thought our customer was going to die. We also don’t think the insurance company believes our customer is going to keep the policy for 20 years to get his money back.  WE HAVE A PLAN to keep some of our freedom. When our customer lives to age 70, he can 1) transfer the $82,000 in returned premium to a single premium product with a $4,000 monthly LTC benefit and a guarantee return of premium if he changes his mind, or 2) transfer it to an immediate annuity, receive $466 per month and use it to pay for a $6,000 monthly LTC benefit policy, or 3) use the annuity money to pay for his Medicare, or 4) party like crazy, celebrating the fact he lived and is not sick!

There are only two objections to the above that we can accept. One, the coverage isn't enough, and the customer needs to save more money or two, the person just doesn't care. If the objection is the second, shut up and stop complaining because he is going to be the problem for the rest of us.

Still Strong and Committed to Your Business

Throughout MVP’s history we have enjoyed a strong relationship with our carrier partner AIG and

American General Life Insurance Company. During our country’s economic crisis and AIG’s government loan, American General’s commitment to price, service and product remained strong. Today, at a time when other carriers are increasing their prices, American General has made two startling announcements.

The first, is the total payback of their government loan, which means your money has been re-paid. You may see their statements and their new commitments to the future during many of your favorite television shows.

The second, is a reduction in their term premiums by an average of 9%. This means you will see American General at the top of the quote more often in the term cases you work on with MVP. They are in a market leading position for the crucial 20- and 30- year term segments. In fact, 50% of their premium rates are in the top three and more than 80% are in the top five within the industry. Their overall competitive position remains very strong.

MVP is delighted to have American General back and strong again. We hope you will welcome them and their commitment to your business.