25/01/2016
Medicare Supplement Opportunity
One of the most important steps in building a successful life insurance practice is to take a holistic approach when meeting with a new prospect.
Conducting a thorough fact-finder without any preconceived ideas will uncover many opportunities that could lead to additional sales. Also, by asking the open-ended questions, you create long-term relationships and, most importantly, build trust and confidence. Many agents fall into the trap of making assumptions about a prospect without spending the time asking the key questions and getting the full view of the person’s life, family, friends, and financial and career goals. For example, if you meet a person who is turning 65, you may only see a Medicare Supplement opportunity. By not getting the full view of your prospect’s goals and objectives, not only are you doing your client a disservice, you are also missing out on other potential opportunities.
Estate and legacy planning
In 2001, Congress significantly changed federal wealth transfer tax laws. The amendments raised the estate tax and lifetime gift exemption amounts, lowered the top estate tax rate and eliminated the estate tax altogether for 2010. At the end of 2010, Congress created a temporary “unified” gift and estate tax exemption of $5 million. However, unless Congress votes to maintain this exemption, estate taxes will revert to the 2002 threshold of $1 million in 2013. For your clients, it means that if their estates exceed the $1 million mark, their heirs will pay estate tax at a top rate of 55% — up from today’s 35%.As most agents are well aware, it’s not uncommon for a family to have a high estate tax valuation when you look at total assets in real estate and large savings in 401(k) or IRA plans. In addition, the value of a closely held business can easily be higher than $1 million. The bottom line: If any of your clients’ or prospects’ estates exceed $1 million, you’ll want to consider ways to help them reduce the estate tax liability before Jan. 1, 2013. But you won’t know about their estate planning and legacy needs if you don’t do a complete fact-finder. That’s why it’s so important to ask about investments, savings, retirement and real estate assets as well as current insurance protections that may be in place. It’s even more important to learn about their hopes for leaving a legacy to their heirs and others. Life insurance is a wonderful tool to help couples pass assets to their kids and grandchildren or to create a legacy through an endowment to charities, religious organizations or educational institutions. It’s up to you to make that solution known. A common assumption agents make about life insurance in estate planning is that clients are only interested in the cheapest policy. This is generally not the case if agents position themselves as estate plan builders, not insurance policy sellers. By educating clients on the very real possibility of their heirs losing money if they have to pay large estate taxes and offering several scenarios for how life insurance can provide a legacy for virtually pennies on the dollar, clients will look to you to recommend the best — not the cheapest — solution for them.
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1250 Dark Hollow Road
Madison, WI 53715
608-890-9855
