Yetworth

Why would a client WITHOUT a taxable estate want permanent life insurance? The majority of people in our country are not going to have a taxable estate (at least with the current exemptions). A client with a liquid net worth of 2-10 million at the cusp of retirement would not normally be thinking about buying life insurance. So why would they consider purchasing a new policy at this point in their lives? 1. They want an efficient wealth transfer tool to transfer wealth to heirs. If most of their assets are qualified assets, this should be a STRONG consideration. 2. They want the flexibility/optionality to spend down their hard earned assets without worry of what they will leave to family or charity. 3. They want to transfer the risk of taking a financial hit in the event of a critical illness, injury or long-term care. The hot topics for surrounding permanent life insurance involve "tax-free income" and "being your own bank". Is there room for these strategies? Sure. But let's look at insurance to do what it created to do first! Does everyone need permanent insurance? NO Can it be a useful part of a financial plan? YES #lifeinsurance #financialplanning #risktransfer

Yesterday an advisor forwarded their client’s email to me— “Do you know about the State of California's disability policies? We realize that the decisions to invest in policies with you were based on an incomplete understanding of the state's coverage.” Wow—ok we’ll gloss over the word “invest” because we are talking about DI and that should never be mistaken for an investment—no insurance should. But this agent had no idea how to respond to the CA State DI question. Imagine if this agent (the recipient) had joined the webinar I had on Friday where we went through all the key sources of disability income—including California State Disability! So here’s where we took it. California State DI is nowhere near as comprehensive as the client’s personal DI plan unless in the event of a short-term DI claim. CA State DI is limited to: ↪️Max weekly benefit of $1,620 ↪️Max duration of 52 weeks The max benefit of $1,620/week is not adequate for most people [in her community]. The [52 week] cap is not going to protect long term income loss, leaving the client exposed and affecting their ability to stay on track for retirement. If there’s a 5 year claim scenario, the total benefits are approximately: CA State DI: $84,240 Personal DI: $394,800 10 year claim scenario: CA State DI: $84,240 Personal DI: $789,600 At the end of the day insurance is just a math equation. For anyone who is dependent on an income to serve their financial obligations and retirement goals… Don’t rely on state DI.

It's happening! DIAM webinar series coming to you every Friday this May. Space is limited. Please make sure to register as soon as you can! We're kicking things off with a session called "Intro to Disability Planning" and we'll be covering much more than DI. In fact I don't think DI is going to be part of the conversation at all in this first session. If you're more interested in policy design and the nuts and bolts feel free to hop in during Week 3. You can see the full series outline at the registration link. Important numbers to understand (consequences > stats) 3 objectives for disability planning (strategies > sales ideas) 5 ways to immediately implement disability planning (planning > product) Hope to see you there! - Max

I have a lot of “crazy” beliefs. We all do to some extent. This is going to sound like a manifesto. I assure it is not. It is simply a way to let you into my thought process for those who are interested. I hold these 5 truths to be self-evident: 1. Fear-based selling is a form of manipulation. People inherently know this and that is largely why there is such a strong distrust against salespeople. Needs-based selling is rooted in education. It is predicated on a fact pattern that is presented to the client. There is no shame. There are no sales scripts. Only active listening, objective facts, and thoughtful discussion. 2. Left to their own devices, people habitually insure the wrong risk. Sophomoric logic insures based on what feels risky. That's not good because it allows them to be drawn in by emotion (see above). Clients rely on their intuition and actuaries typically account for that. A sophisticated client instead insures against the largest potential loss. It's not that they feel it is particularly likely. It's just that everything crumbles when a breadwinner needs an expensive brain surgery, indefinitely loses income, requires a care team for an unknown period of time, or dies. Any one of those events can result in immeasurable financial loss and requires a form of insurance to pay the bills that come from situations like that.  3. Personal responsibility is an obligation for people of means. Living on government benefits should be a last resort. And no one working with a financial planner should tie their destiny to the fate and standards of Medicaid or Social Security DI. It's just too easy to prevent this from happening. The fact that any planners allow this as a plausible track for their clients is negligent. 4. Insurance is ethical. I used to think insurance companies had it out for consumers--that they are money grubbing institutions that can't pay a cent without a knock-down-drag-out fight. In fact, loss ratios for mature carriers are generally over 50%. Some hovering around 70%. That means that from every dollar of premium paid to the carrier, they pay back out 50-70 cents to someone in a time of need. There are several charities that don't even pay out that high of a percentage to their beneficiaries. What happens to the rest? They pay the underwriters, actuaries, claims adjusters and sales people, technological investment, improvement projects, and the big one—reserving for a rainy day. 5. We are less than five years away from technology breaking our industry wide open. This is both good and bad. Carriers are finally developing systems that allow for streamlined inquiry and submission. API technology will allow aggregators to scale. While people with an insurance license will be able to hang their solutions on a digital storefront. Financial planners will be able to send links to a client to actually follow through on an insurance recommendation. I know because I've built it. We're almost there.

Here I am with my silent business partner. 🤫 If I have an unforeseen medical event and am struggling to run my business, this partner steps up to make sure the bills are paid. No shade to my more tangible business partners but…I can’t say I’d expect them to pay my bills. Because it wouldn’t be fair to them to keep paying me if I couldn’t work. How many of your clients have a silent business partner like this? 👀

Maine was magical! The conference was a success. And now I’m ready to fulfill my duties as incoming president of the International DI Society. Why serve as president? Why does this group matter? The IDIS is comprised of all the top DI minds in the business. Maybe not the biggest producers or general agencies. Not even all carriers. But this is unequivocally where the movers, shakers, and innovators all congregate. Growing up around this business I realized there was a lot of room for improvement. At first I thought it was just the way my parents did business. 🙈 It didn’t take long to realize it was the industry at large that was lagging behind every sector. ⏩Tech and telecom pave the way. ⏩Retail follows within 5-10 years. ⏩Insurance follows after another 5-10 years. ⏭️And disability insurance is at the back of the pack… Well, we’ve finally arrived. Big things are brewing. Make sure to connect/follow to stay tuned.

🤯 “The Nationwide study also revealed that more than half (51%) of respondents who mistakenly thought they owned LTC insurance confused it with long-term disability insurance, and almost a third (30%) confused it with health insurance.” This might sound inconceivable to some, but I can assure you this is a common mistake. Many people (advisors included!) have mistaken Long Term Care for Long Term Disability. It is so important to be able to articulate the differences to your clients and prospects. If you are fuzzy on the details and need a quick explainer, talk to your general agent, your preferred family benefits broker, or let’s hop on a 1-on-1 training call together. ($Free.99 for the time being) Linking to the article in the comments. 👌🏻

“We were interested in getting your thoughts on when it makes sense to get rid of a DI policy.” I absolutely love this question. Because it means we’re close or at financial freedom! And I enjoy celebrating that with everyone. This one came in yesterday but I’ve gotten it a few times in the past month so why not answer the question for all my homies? The first question I like to ask: “Are you still dependent on your earnings?” If that’s a resounding yes then it’s clear that DI is still necessary. If there’s any hesitation then I pose the following: “Could your passive income cover your daily lifestyle?” If the answer is no, our passive income could not cover our monthly expenses, then we know there’s still a need for earnings. If there’s any hesitation, the next question would be: “Are you depending on your earnings to meet all your financial goals in retirement?” Sometimes people feel they can sell their business, liquidate their retirement nest egg or some other asset to meet their expenses. And while that may be possible, you may be robbing yourself in the future. For instance: Say you make $500k per year ($42k/month before taxes), and your monthly burn is $20,000 between mortgages, auto or other loan repayments, tuition, club dues, groceries, utilities, technology, savings, etc. If your retirement savings are north of $5M but you lose your income, you still have to come up with $20k/month (after taxes). So if we liquidate an emergency fund after 3-6 months, and have to draw $28k/month from an IRA or 401k that means you’re on the hook for $336k per year, which is significantly greater with the time value of money. If this occurs early in a career it can result in catastrophic portfolio loss. If it happens later it is potentially much less of an issue but can still carry a significant impact for retirement lifestyle. The big shift happens when you are truly in a “work optional” arrangement and your financial obligations could comfortably be met if you retired today. At that time I would surrender the DI… …and seriously start contemplating the need for LTC if it has not yet been addressed 😊

Check this out (1 min. read). I had the opportunity to write a blog post about what I've been experiencing as a CA resident (LTC marketing tactics). https://lnkd.in/exweu3uU #ltcinsurance #ltcipartners #ltcinsurancetaskforce #ethicalmarketing