One Simple Phone Call

What do you do when you want income growth and access to your money, but not exposure to taxes? One woman’s quest for a simple product that met her requirements and still allowed her to pass her assets to her children without also passing a large tax burden or a long underwriting process led her to one simple phone call.

 

The Facts

• 71-year old female
  
• Two grown children
  
• $330,000 is assets available to reinvest

 

The Goal

Find a product that offered her a strategy for growth, allowed her to retain control of her funds while reducing taxes on her estate, and that could be placed without a lengthy underwriting process.

 

 

Course of Action

The client contacted her agent with her request. She had funds available from an existing annuity that she could leave to her children, but the tax burden those funds would be exposed to was more than she wanted them to have to pay. Her agent, a registered representative, knew he could offer her a life insurance policy that would address her wishes to leave a tax-free legacy for her children, yet still allow her access to the funds in case of an emergency. His client was in good health so he knew he could find a product that was simple enough to ensure fast placement avoiding a lengthy underwriting process. He brought the facts to his Life Sales Consultant, Vince Dean, and together, they searched for a product to meet the client’s needs.

 

 

The Solution

Dean suggested that his agent offer the client a simplified issue single premium indexed product. This type of product offered rapid placement without going through underwriting. The indexing feature on these products can translate to even greater growth, a large factor in the client’s wish list. After searching for the right product it was determined that two policies would be required because the amount the client wanted to put into the policy would exceed the risk factor allowed in a single policy. The value of the first policy was $140,000, and a second policy, with another carrier, $175,000.

 

After compensating for the taxes owed on the surrendered annuity, the client had approximately $315,000 left to purchase life insurance. Although the client was required to pay the taxes now, she was able to eliminate any taxes her children might have to pay at a later date on the income tax-free, guaranteed death benefit of $540,000- a net of over $200,000 more than the original annuity value. The transfer of the funds from the annuity was fully documented and met with current suitability standards.

The carriers ordered the necessary Medical Information Bureau and Pharmacology reports to review any issues the client was currently under treatment for and the types of medications she was taking. The agent also took the time to prepare the client for the phone interviews the carriers needed to issue the policies. The questions on these interviews are typically very detailed and invasive, and the agent wanted to put the client at ease about this aspect of the process.

 

 

The Result

For the client: The client was able to achieve her goal of leaving an income tax free legacy for her children while achieving the growth she wanted through the death benefit. And the case, because it was simplified issue, was placed rapidly after a simple phone call.

 

For the agent:

Call your Sales Consultant for more information on simplified issue cases.

 

 

Scott Johnson, CLU
President, Life Sales

Scott’s 20-year life insurance career includes 10 years as a Northwestern Mutual Life agent in Denver, Colorado with personal production of over 1,000 policies. He also worked with a planning firm, Benefit Concepts, Inc. for two years, working with three top producers in Advanced Planning. Scott spent the next eight years with Life Quotes, Inc. of Evergreen, Colorado. He produced over 1,900 policies and assisted in the growth and development of the Client Service and In-force sales teams. Scott held various positions in addition to sales, which led to his position as President and CEO of Life Quotes, Inc, before joining Creative Marketing.

 

 

 

 

FOR AGENT USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC 11125-2010/7/12 | 16583 1940310

Guarantees provided by annuities and life insurance are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Carefully consider the risks, expenses, taxes, potential loss of principal and clients' individual objectives before reallocating existing monies into other products.