2018 MDRT Annual Meeting e-handout Material. Transferable Sales Ideas and Marketing Concepts for the Life Insurance Producer

Transcription

1 2018 MDRT Annual Meeting e-handout Material Title: Speaker: Transferable Sales Ideas and Marketing Concepts for the Life Insurance Producer Howard E. Sharfman Presentation Date: Wednesday, June 27, 2018 Presentation Time: 11:30 a.m. - 12:30 p.m. Session Room: LACC The Million Dollar Round Table (MDRT) does not guarantee the accuracy of tax and legal matters and is not liable for errors and omissions. You are urged to check with tax and legal professionals in your state, province or country. MDRT also suggests you consult local insurance and security regulations and your company s compliance department pertaining to the use of any new sales materials with your clients. The information contained in this handout is unedited; errors, omissions and misspellings may exist. Content may be altered during the delivery of this presentation Million Dollar Round Table Million Dollar Round Table 325 West Touhy Ave. Park Ridge, IL USA

2 Howard E. Sharfman Transferable Sales Ideas and Marketing Concepts for the Life Insurance Producer If the rate of change on the outside is greater than the rate of change on the inside the end is near. - Chuck Hollander and Jack Welch 1

3 Your Market Has it Changed in the Last 5 Years? Estate Tax The Times it Has Been Repealed and the Rates ESTATE TAX What Happens if the Estate Tax is Repealed? ESTATE TAX 2

4 IUL Male Age 41, Super Preferred IUL Male Age 41 Super Preferred Indexed Account Historical Frequency Advantages ABS IUL with Index Credit Enhancement (Assumptions: 11.25% Cap/1.00% Floor/100% Participation with 10% ICE) Annual Indexed Returns would have averaged 6.0% or higher: 60.9% of the time for any 1 year period 87% of the time for any 10 year period 93% of the time for any 20 year period 99% of the time for any 30 year period 3

5 The Power of Negative Numbers Year 1 Return Year 2 Return Required to Get Back to Even Number of Years at 10% Return to Get Back to Even 10% 11.1% % 25.0% % 42.9% % 66.7% % 100.0% % 150.0% % 233.3% % 400.0% % 900.0% Estate Tax is About Leverage, Timing and Discounts Substituting Assets and the Power of Substitution Bringing in the left hander from the bull pen 4

6 Planning Opportunities with the Power of Substitution Basis Step-up (Current Law) Carryover Basis Pre-Death Substitution of Assets No gift No gift Assets in Estate at Death Low basis High basis Life Insurance Owned by IDGT Owned by IDGT Prior Installment Sale Cash to Provide Liquidity Preserving Capital Loss Near Death Escaping Three-Year Rule Prior to death swap high basis assets in estate for low basis assets in IDGT Purchase assets from estate for estate taxes Swap loss asset in estate with low basis asset in IDGT. Preserves capital loss in trust. Swap life insurance policy for assets in IDGT No swap necessary prior to death Purchase assets from estate for capital gain tax N/A Swap life insurance policy for assets in IDGT Premium Finance the Good, the Bad and the Ugly What is the Reasonable Outcome Borrowing $1,000,000 and earning a 3% tax-free arbitrage (between loan rate and policy IRR) over 25 years = $1,093,778 Saving $200,000 (between paying premium and paying interest) and earning 6.5% tax-free on the savings becomes $965,540 in 25 years Potential value creation of more than $2,000,000 5

7 Premium Finance Horror Story Client purchases premium financed policy through local agent and financed through Northern Trust After three years the policy has not performed and can not be sold in the secondary market Client wants to exit the arrangement and surrender the policy Premium Finance Horror Story (continued) Loan was $1.1mm underwater and collateral was posted Policy was IUL and the return for the year was posted annually and the policy is in month 3 of the year (with a 6.5% gain for the year already). This gain is not credited until year end in 9 months if it still exists Client surrenders policy and collateral and walks away from loan Client hires new attorney, CPA and insurance professional UHNW Prospecting Best Practices and Client Meeting Agenda 6

8 UHNW Prospecting Best Practices Always Remember Always look for an emotional connection Networking is continuous and never ending UHNW Prospecting UHNW prospects are an individual and unique PERSONAL ENGAGEMENTS CUSTOM EVERYTHING UHNW Prospecting Best Practices Research Everything Unique pitch designed for the individual Check your current contacts for UHNW Research who they know and target an introduction to their UHNW Circles Take Your Time and Be Patient Nurture Keep up to date Add value and think about an event for UHNW prospects UHNW Prospecting Best Practices Expand Your Circles Introduction from a client Direct marketing that involves a passion, interest or hobby Research who they know and target an introduction to their UHNW Circles If You Create a Unique Event that Targets Their Hobbies and Interests Quality not quantity Ask them to bring a friend Do research about your guests Follow up Follow up and have a system 7

9 UHNW Prospecting Best Practices Remember It s a Marathon, Not a Sprint UHNW Client Meeting Agenda Show them you care by teaching and adding value Don t assume they know Don t assume other advisors have already done this Don t assume this is not your most important job Provide updated charts and statements Run new estate tax projections Review asset protection UHNW Client Meeting Agenda (continued) Review Income tax changes most importantly passthrough entities Plan for Basis and substituting assets Review the increased exemption and make a plan for its use Review trusts and look for additional flexibility 8

10 UHNW Client Meeting Agenda (continued) Only after the above Talk about life Insurance Policy review Review amounts nothing builds credibility more than telling someone they don t need more Manage conversions and keep a list of dates Consider using single premiums into a premium deposit fund UHNW think in single premiums What s Wrong with the Insurance Business? 9

11 Top Traits of Successful Producers 1. Great Producers have GRIT like no one else. It is their number 1 quality 2. Great Producers are disciplined and never present before they have an unfair advantage because they asked all the questions 3. Great Producers know their product, their competition, and their market, inside and out 4. Great Producers thrive on new activity, not old 5. Great Producers know what others don t, they will take the time to find out Top Traits of Successful Producers (continued) 6. Great Producers move quickly away from lost causes and focus on developing opportunities 7. Great Producers don t discover clients, they create them. THEY fish in stocked ponds, not open oceans 8. Great Producers aren t consumed by what s on their desk; they are consumed by what isn t. They run marathons not sprints 9. Great Producers are irreverent; they often say no but rarely hear no 10. Great Producers have bad moments, not bad days. They enjoy what they do 10

12 My Core Beliefs People will always owe someone or love someone Our IRR is better compared to the alternative Our products are truly needed by families Classic reason to place life insurance: Family Fairness Issues Kids In & Out of Business Blended Families Special Needs Planning Charitable Planning Tax-Free Withdrawals Forced Savings Tax-Free Death Benefit Income Replacement Estate Creation My Friend Woody the Jeweler A Sad Story, but what would have happened without planning? 11

13 Complete Your Session Surveys in the Mobile App Located within each session by clicking the clipboard icon on the lefthand side 12