What s Inside the August 2014 Issue? Struggling Life Insurers Seek A Middle-Class Revival. The Price of Procrastination Why it Pays to Invest Now

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1 HOWARD WIGHT S Financial Concepts Ideas That Will Help You Make A Difference Number 368 August 2014 Struggling Life Insurers Seek A Middle-Class Revival This article appeared recently in The Wall Street Journal. It provides an excellent overview of some of the things happening in the life insurance industry. Where appropriate, I have added some commentary. (File: Technique Book; Insurance Planning/MDRT Index; ) The Price of Procrastination Why it Pays to Invest Now Here s a chart demonstrating the high cost of waiting. Starting sooner beats waiting. (File: Technique Book; Investment & Tax Planning/MDRT Index; ) The Price of Procrastination Why it Pays to Invest Now (Summary) This is a summary of the prior page. Why wait? (File: Technique Book; Investment & Tax Planning/MDRT Index; ) The Top Million You can be come an instant expert by drawing this chart in front of your prospect What s Inside the August 2014 Issue? Struggling Life Insurers Seek A Middle-Class Revival The Price of Procrastination Why it Pays to Invest Now The Price of Procrastination Why it Pays to Invest Now (Summary) The Top Million The Top Million (Commentary) No One Has a Lease on Life or on Good Health Power Questions Random Thoughts on Life or client rather than using the preprinted version. You could ask a prospect to draw the chart as you describe it to him over the phone if you are having trouble getting 2014 Howard Wight an appointment. (File: Technique Book; Estate Planning/MDRT Index; ) The Top Million (Commentary) Here s what to say to accompany this concept, or you can just let the prospect read it if you are more comfortable doing that. (File: Technique Book; Estate Planning/ MDRT Index; ) No One Has a Lease on Life or on Good Health If you don t die before age 65, you will die after age 65. No one dies at the right time. (File: Technique Book; Overview/MDRT Index; ) Power Questions Ben Franklin said, People are best convinced by reasons they themselves discover. Questions are the keys to the doors of discovery. (File: Technique Book; Financial Data/MDRT Index; ) Random Thoughts on Life This page presents a collection of thoughts about life in general. (File: Technique Book; Miscellaneous/MDRT Index; )

2 Struggling Life Insurers Seek A Middle-Class Revival This is the title of an article which appeared in the July 25, 2014 issue of The Wall Street Journal. The article starts by talking about MetLife s efforts to sell life insurance at a kiosk placed in the pharmacy section of a Wal-Mart Supercenter in Roswell, Georgia outside of Atlanta. Shoppers are urged to get life insurance today for only $5, which would be the first month s premium for as much as $50,000 of life insurance. Observing activity at the kiosk is Ray Burton, a manager with MetLife. In about 90 minutes, only two shoppers checked out the kiosk. According to the article, MetLife s premiums on policies sold in 2013 totaled $409 million, as compared to $553 million in 2005, a decline of 26%. Traditional life insurance began losing popularity with the rise of mutual funds and 401(k)s in the 1980s. Financial planners urged many Americans to buy cheaper, barebones term life coverage and pour more money into products aimed at helping them have enough money in retirement. The lower premiums on term life policies chased agents who rely on commissions out of the insurance About 30% of all American households have no life insurance, up from 19% about 30 years ago. business or into products aimed at wealthier Americans, including variable annuities. Permanent life policies remain popular among people in higher tax brackets because savings grow tax-deferred. Not only do the savings grow tax-deferred, they can also be accessed tax-free by using policy loans. Additionally, the death benefit is ultimately income tax-free. Another reason for the sales decline: MetLife, Prudential and other insurers that went public in the 1990s and early 2000s got more fixated on the bottom line. As a result, insurers shrank their ranks of in-house agents to save on recruitment, training and other costs. They farmed out sales to securities brokers and independent financial advisers, who also tend to have well-to-do clients. Melina Ahmadpour didn t know that her mother, a hair stylist in a Las Vegas casino, had no life insurance and little savings until shortly before the mother died of cancer in 2009 at the age of 52. No one ever talked to her about it, said Ms. Ahmadpour, now 24 years old. Relatives pulled together about $20,000 for Ms. Ahmadpour and her older sister. Nearly half of it was spent on burial costs. To raise more money, the sisters put their mother s property up for sale on Craigslist. continued

3 Struggling Life Insurers Seek A Middle-Class Revival (continued) Strangers came into our apartment, bargaining to get the price down, she said. Ms. Ahmadpour has had 10 different jobs since her mother died and lost a college scholarship because her grades suffered. Ms. Ahmadpour believes she would have earned a master s degree by now if her mother had bought life insurance. One rule of thumb among insurers, financial planners and consumer advocates is that a family s breadwinner should have enough insurance to replace five to 10 years of income. But only 4% of private-sector workers who have employer-sponsored policies are covered for more than two years of earnings, according to a Labor Department survey in More than 60% are covered for just a year s pay. The article mentions MetLife s reaching out to insure people who have potential health problems. That means people with the best health can get better prices elsewhere. MetLife isn t aiming to be the cheapest seller. It wants to offer an affordable price that is easily accessible. Skeptics question whether the direct-sales approach can ever match the effectiveness of real-life insurance agents. People still have to be moved from the intellectual I need to do this to the actual doing it, said David Woods, 77, an agent since 1966 with Massachusetts Mutual Life Insurance Co. MassMutual, a policyholder-owned insurer based in Springfield, Mass., remains committed to hiring and training a large sales force. According to the article, Bob Hester, a forklift driver who looked at a MetLife kiosk, decided not to buy a life-insurance policy on the spot because it seems like $5 here and $15 there. It adds up. Yet other facts of life nagged at him. Mr. Hester has three school-aged children and almost no savings. He ought to buy a policy, he said, but it s just taking time to do it. Most people want to do the right thing for themselves and their families. They need help in doing the right thing. That s where agents come in to do what can t be done by a kiosk. It s better to have life insurance and not need it than to need it and not have it. When someone dies, there is almost always a need for cash. Life insurance is cash long-term cash. Death creates the problem the need for cash, and it also creates the solution to the problem life insurance. Those considering life insurance might do well to check out the book, Life Insurance in a Nutshell, by Howard Wight. It answers many of the questions asked by those seeking guidance.

4 Scenario I Per Year Invested at 7% for 10 Years Starting Now Annual Investment Cumulative Investment 7% 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, ,000 The Price of Procrastination Why it Pays to Invest Now $10,700 22,149 34,399 47,507 61,533 76,540 92, , , , , , , , , , , , , , , , , , , , , , , ,079 Year Scenario II Per Year Invested at 7% Starting in Year 11 Annual Cumulative Invested Investment 7% These figures are purely hypothetical and are used to illustrate a concept. They are not intended to imply that any specific investment will perform in this manner. 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, , , , , , , , , , ,000 $10,700 22,149 34,399 47,507 61,533 76,540 92, , , , , , , , , , , , , ,652

5 The Price of Procrastination Why it Pays to Invest Now (Summary) Summary of Results Scenario I Starting Now Scenario II Starting in 10 Years Annual Investment Years Total Investment $100,000 $200,000 Results $572,079 $438,652 Why Wait? Why Not Start Now?

6 The Top Million What Do You Want to Accomplish with Your Money? The Top Million $1,000,000 PLAN A Your Children $600,000 PLAN B Your Children $5,000,000 PLAN C Your Favorite Charity $5,000,000 Which Plan Do You Prefer?

The Top Million Commentary When you re worth multi-million dollars, the Top Million is money that you probably are not going to spend during your lifetime.

PLAN A Your Children $600,000 What Do You Want to Accomplish with Your Money?

The IRS Estate Tax Collector will take about $400,000 out of your Top Million, leaving your children with only $600,000. How does that sound? Now let s take a look at Plan B.

7 The Top Million Commentary When you re worth multi-million dollars, the Top Million is money that you probably are not going to spend during your lifetime. Some people even refer to this money as extra money, if you can imagine such a thing. What is going to happen to this Top Million when you die? Let s take a look at some options. PLAN A Your Children $600,000 What Do You Want to Accomplish with Your Money? The Top Million PLAN B $1,000,000 Your Children $5,000,000 PLAN C Your Favorite Charity $5,000,000 Plan A shows what happens if you do nothing. The IRS Estate Tax Collector will take about $400,000 out of your Top Million, leaving your children with only $600,000. How does that sound? Now let s take a look at Plan B. Here we use the Top Million to purchase $5,000,000 of life insurance. The bottom-line cash result is that your children will receive $5,000,000 rather than $600,000. Which plan do you prefer so far? In Plan C, we use the Top Million to purchase $5,000,000 of life insurance which is paid to your favorite charity. The charity could put up a building with your name on it. How does that sound? It all boils down to what are you trying to accomplish with your money? Overall, which plan do you prefer? Which Plan Do You Prefer? It should be noted that this is just a concept. The premium would probably be spread over a number of years rather than being paid all at once. The actual premium would be determined by such factors as age, health, and the type of policy.

Comedian and actor. Married, 3 children.

8 No One Has a Lease on Life or on Good Health Name Date of Death Age Cause of Death Comments Robin Williams August 11, Suicide by asphyxia Comedian and actor. Married, 3 children. No matter what people tell you, words and ideas can change the world. Robin Williams in Dead Poets Society.

9 Power Questions o What are the most important things you learned from your parents? o What do you contribute to your family? o Has anyone in your family been divorced? o What family tradition would you like to continue and pass on? o How do you feel about your family?

10 Random Thoughts on Life There is an infinite capacity to improve upon everything you do. Bob Nardelli, CEO, Home Depot We will never be the same. It s not what you gather, but what you scatter that tells what kind of life you have lived. Fear not death. Fear having not lived. If you find yourself in a hole, stop digging. A fool speaks because he has to say something. A wise man speaks because he has something to say. Plato Simplify. Never say blah blah when blah will do. Most people spend more time planning a vacation than they spend planning their family s financial future. Knowledge, wisdom, and vision are the stepping stones to financial freedom. Cash value puts the life into life insurance. The most dangerous creation of any society is the man who has nothing to lose. James Baldwin The Fire Next Time Anything worthwhile takes time. If you give a person a fish, you may feed him for a day. If you teach him to fish, you may feed him for a lifetime. What if he doesn t catch any fish? The ultimate master key to life, happiness, and success is to focus on first things first.

11 Caveats, Comments and Options Please do NOT copy this newsletter for your associates unless you have purchased the right to do so. This newsletter is copyrighted. HOWARD WIGHT S Copyrighted. This material is copyrighted. An subscription, which costs $147 per year, is intended for the sole use of the subscriber who may copy pages for prospects and clients only. Companies, agencies, and brokerage operations may purchase the rights to reproduce the newsletter or individual pages for agents, associates, or brokers, but may not do so without prior written agreement with Wight Financial Concepts Corporation. The investment for an agency to make copies for its agents is $997 per year, which includes the subscription. It s a real money maker! One good sale will recapture your investment. Companies may purchase subscriptions at a substantial discount. Call us for details. Consult your own professional advisors. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal or accounting services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Subscriber s responsibility. Subscribers are responsible for ensuring that the information they present to their clients is accurate and in compliance with state, federal and company regulations and that adequate disclosure is made. Filing. For those subscribers who have bought the TECHNIQUE BOOK, we suggest that you use the newsletter to keep it updated. Each page of the newsletter can be filed in the appropriate section, or you can establish a separate set of proposal files. Repetition, Reinforcement, and Timing. Repetition and reinforcement are the keys to learning, expertise, excellence, and success. We will repeat ideas from time to time but almost every time the idea will contain a new nuance. A great idea at the wrong time is no better than a bad idea. Timing is everything. The right idea at the right time can change a lifetime perhaps yours or that of a client. Ideas. If you are willing to share your ideas with others, please send them to Howard Wight, 1330 Jones Street, Suite 404, San Francisco, CA 94109, fax them to (415) , or call him directly at (415) Financial Concepts Filing Technique Book Section MDRT Index Overview Financial Data Investment & Tax Planning Estate Planning Business Planning Executive Benefits Insurance Planning Disability Income Misc. Motivation Misc. Efficiency Misc. Prospecting For Customer Service, Please Contact: Wight Financial Concepts Corporation P.O. Box Brooksville, FL Phone: SELL Fax: ideas@howardwight.com

out the next illustration. (File: Technique Book; Insurance Planning/MDRT Index; )

out the next illustration. (File: Technique Book; Insurance Planning/MDRT Index; ) HOWARD WIGHT S Financial Concepts Ideas That Will Help You Make A Difference Number 286 July 2007 Here s a quick overview of each page in this month s newsletter: What Is Your Market? Surgeons make more