Westland Financial Services

A case to Share May 17, 2018

By

Case 1
Client, Female age 68, with first grandchild having first birthday. Her Advisor mentioned the cool Legacy Gift Idea, and she said great idea! Her mother (Great Grandma) contributed $1,000 and she committed to $100 monthly for 20 years into a Indexed Life Program for grandson.
Expected results: $25,000 invested over 20 years, cash value expected of only $40,000 at year 20 and with a death benefit of over $200,000 and growing from day 1. Nothing too exciting, yet, but wait. By year 40 the cash value is expected to be over $160,000 and the death benefit over $400,000. By age 65, the cash value is expected to be near $1,000,000 and death benefit over $1,200,000. Quite a legacy from only a small initial commitment.
Using a savings calculator on Bankrate.com with a 6% assumption, the result at age 65 is about $750,000 with no insurance. There are extra bells and whistles with the Legacy Gift Idea (tax free distributions-loans for example). Start letting your clients who have children and grandchildren know about this and you will be surprised how many will move forward. Call us for a customized illustration for a case today, maybe for your own child or grandchild!

Case Study Female Age 2
Sample Illustration Female Age 2
Tax free withdrawal of $23,000 to help pay for college expenses and $44,000 tax free supplemental retirement income. That is a wonderful legacy for you to be remembered by.

Case 2
We met with an advisor and discussed ideas to help him boost revenue while helping many clients and prospects. We discovered a couple ages 59 and 58 who he had completed some retirement planning work with and they were going to be just fine according to his E-Money Capital Needs Projection. However, we modified the model to test for several scenarios.
Him dying tomorrow (had existing term insurance through age 75)
Her dying tomorrow (no current life insurance)
Him or her having a long term care event at age 83 for 4 years duration (no existing LTCi)
Results:
Him dying – plan still succeeded
Her dying – plan failed
Either having LTC event – plan failed
This planning session led to a 15 year term sale on her and traditional LTC insurance on both. They didn’t have the portfolio to justify a linked benefit strategy, but we did look at all options.

Partner with Westland and allow us to help you figure this all out and be by your side if needed when presenting solutions to your clients.

Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.

Call for your personalized case designs today. We are here at your service.

A case to share April 18, 2018

By

Case 1
Couple both age 60 had been experiencing long term care needs of a parent and definitely wanted to pursue putting a plan in place now while they were healthy. They didn’t want their children to repeat what they have been going through with Mom.
 
This couple had a solid portfolio and a retirement action plan.  The Advisor identified about $120,000 that could be repositioned to address this risk.
 
We looked at several options (Traditional LTCi, John Hancock, State Life, Pacific Life, Nationwide…) and recommended MoneyGuard with a 3% inflation rider and 6 year benefit. This seemed to fit their specific situation best.
 
Him – deposit of $55,030 to produce a $3,000 initial monthly benefit.  Total initial death benefit was $92,831 and LTC pool of benefits of $232,863.  This would grow to $6,281 monthly benefit and a LTC pool of benefits of nearly $500,000 at age 85.
 
Her – deposit of $62,084 to produce a $3,000 initial monthly benefit.  Total initial death benefit was $117,215 and LTC pool of benefits of $232,863.  This would grow to $6,281 monthly benefit and a LTC pool of benefits of nearly $500,000 at age 85.
 
These clients will always receive a benefit.  A solid death benefit if care is never needed or can tap into a significant LTC benefit if Care is needed.

At Westland, we understand the value of committing a portion of a clients’ portfolio to insurance that creates large assets just at the time they are needed most, no matter when that may be. Your client’s heirs will think you are a hero for doing such a good job of protecting their family portfolio.
 
Partner with Westland to help you figure this all out and be by your side if needed when presenting solutions to your clients.
 
Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.
Call for your personalized case designs today.  We are here at your service.

A case to share February 6, 2018

By

During the last few weeks we have worked on dozens of life, long term care, disability and annuity cases working alongside our Advisors.
If you are not discussing these issues with your clients then who will? 
 
Case 1
 
Couple ages 59 and 58 actually called with a request for long term care protection after thinking they have done pretty well, but that LTC was one hole in their plan they haven’t addressed yet.  This goes to show, that if you are not mentioning LTC you may be missing the boat.  Your clients are thinking about these risks.
 
Options presented:
 
State Life One America (A+) AssetCare I (joint life)
1) Deposit $100,000 will generate $6,375 monthly benefit each (3% option)
Second-to-die death benefit of $212,508
Lifetime benefit extension cost $1,729 annually  
2) Deposit $100,000 will generate $8,443 monthly benefit each (4% option)
Second-to-die death benefit of $211,063
Lifetime benefit extension cost $2,927 annually  
3) Deposit $150,000 will generate $6,509 monthly benefit each (2% option)
Second-to-die death benefit of $325,457
Lifetime benefit extension cost $1,091 annually
 
 
John Hancock (A+) Protection UL with LTC Rider (individual life)
1) Him $300,000 death benefit and LTC benefit of $6,000 monthly (50 months)
Cost is $5,614 annually Standard Plus Non-Smoker rate  
2) Her $300,000 death benefit and LTC benefit of $6,000 monthly (50 months)
Cost is $4,085 annually Standard Plus non-Smoker rate
John Hancock (A+) Protection UL with LTC Rider (individual life)
1) Him Single deposit $75,000 provides $257,387 death benefit
Provides LTC benefit of $10,295 monthly (25 months – 4% option)  
2) Her Single deposit $75,000 provides $313,823 death benefit
Provides LTC benefit of $12,553 monthly (25 months – 4% option)
 
 
Lincoln (A+) MoneyGuard – Single deposit $75,000 each 6 year benefit 3% inflation
1) Him – minimum death benefit of $99,344 at ages 70+
Provides LTC benefit of $8,927 and benefit pool of $692,910 at age 85  
2) Her – minimum death benefit of $90,749 at ages 78+
Provides LTC benefit of $8,399 and benefit pool of $651,950 at age 85
 
 Which of these is best?
 
Once explained:
Some clients are fearful of a long term dementia and lifetime benefits really resonate – recommend State Life.- Also has money back guarantee from day one.
Some clients like the higher death benefit offered by John Hancock should care not be needed.
Some clients are more concerned about having a higher LTC benefit in the future and an inflation option is the way to go -recommend Lincoln
 
Many other options can be considered in a case like this including traditional LTC with no death benefit or money back guarantees.  If the funding source was another annuity or IRA, then State Life would be on top of the list. There are also LTC annuities to consider should there be health issues or large deferred annuity gains that can be used for long term care on a tax free basis.
 
Partner with Westland to help you figure this all out and be by your side if needed when presenting solutions to your clients.
 
Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.
Call for your personalized case designs today.  We are here at your service.

A case to share January 31, 2018

By

Since everyone dies, we know exactly what the end result of a life insurance program will be. We just don’t know however WHEN any individual will die so we don’t know how financially efficient the program will be. In other words, the younger or sooner someone may pass away the financially more efficient the payoff from life insurance. 
  • Walt purchased a $1million life insurance policy at the age of 47 and died from a brain tumor at age 53. Everyone would agree that (no matter what Walt paid for it) he made a good investment buying that policy…an Internal Rate of Return (IRR) of about 108% per year?
  • Sharon purchased the same kind of policy at the age of 63 is active and in good health most of her life and died at the age of 93. After 30 years of paying premiums….an IRR of about 5.1% per year. Should she have put her money in a mutual fund? Maybe, maybe not.
  • Tom and Gina ages 62 and 60 repositioned $100,000 into a Life with Long Term Care Linked Benefit joint strategy.  If either of them ever needed care, they would have $7,600 per month each for as long as care was needed.  If they never needed care, their family would receive $190,000. Everything is guaranteed by the life insurance company. Receiving a solid safe return, care or no care.
    • Most folks who sell life insurance or long term care for a living will concentrate on the “need” and “scare” tactics. You don’t need “scare” tactics, just focus on the benefits and that you have addressed a risk that needed addressing. Many critics of insurance criticize because they don’t truly understand the benefits, focus on costs and most likely offer an alternative. However, almost all alternatives involve some risk.
     
    On the other hand, those of us who deal with life insurance in the context of our clients overall financial and retirement planning clearly have a different perspective when we consider the investment aspect. We can see the value in our clients’ portfolio and to their family when a portion of their assets are “invested” in a life insurance policy. But just like any other investment, it is impossible to tell what the final rate-of-return or outcome will be because we do not know when the insured will die.
     
    Now consider the risks of Critical, and Chronic Illness that in all cases occur before death. Just think of the rate of return on your money and what a wise decision you would have made, if your client were to have a significant health challenge, like a stroke, heart attack or kidney failure? How about an organ transplant after only 15 years owning and paying for a policy? Be a smart advisor and make sure the insurance your clients are “investing in” contains an “acceleration rider” allowing them to access some or all of the death benefit while they are still alive. Things happen and they may need some serious money to cover the cost of that organ transplant and the rehabilitation that follows.
     
    Again, the critics of life insurance mostly just lack understanding of what it does and how it works and more importantly don’t factor in the added emotional benefits of owning it. Don’t miss a fundamental concept in financial planning; that the only time one can truly judge success or failure is when it is time to use the money or pass it on. Until then, all investing and insurance is a work in process. The big difference between “investing” in life insurance versus other options is that with life insurance you always know “what” the end result will be, it’s only a matter of “when”. With other investments you will likely not know the “what” and the “when”. That’s why having some of both increases predictability of results, reduces volatility along the way and for most people, reduces stress, allowing us to hopefully help our clients enjoy life a little longer.
     
    At Westland, we understand the value of committing a portion of a clients’ portfolio to insurance that creates large assets just at the time they are needed most, no matter when that may be. Your client’s heirs will think you are a hero for doing such a good job of protecting their family portfolio.
     
    Partner with Westland to help you figure this all out and be by your side if needed when presenting solutions to your clients.
     
    Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.
    Call for your personalized case designs today.  We are here at your service.

A case to share January 25, 2018

By

Annuity Income – Take the time to understand this product and strategy for guaranteed income.
 
Client is age 65 with $350,000 and wanting this portion of his money out of the market – No risk!  However he needed about $1,000 per month of income from these funds, plus growth to supplement his retirement income needs.  We proposed that he take $36,000 and keep this in cash and draw from it for the next 3 years.  The other $314,000 could be placed in the Core 7 Indexed Annuity with an increasing payout beginning in year 4.  The guaranteed payout would be about  $18,000 beginning in year 4 and likely to be $20,000 or more.  With the increasing income option, each year in the future, when the index is positive, the client will receive a raise. We were able to achieve what this client needed with nearly no worries about his retirement income needs for the rest of his life.  Click on this link for the illustration sample – Core Income 7, 65 year old $314,000 Rising Option
Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.
Call for your personalized case designs today.  We are here at your service.

A case to share January 16, 2018

By

Annuity Tax Bomb Saving Idea for Legacy 
 
 
An Advisor called to discuss options for an annuity owned by the mother of one of his best clients.  Mother was age 84 diagnosed with dementia and the family was considering moving her to an Alzheimer’s care facility.  Mom was described as very healthy otherwise. Her Daughter and son-in-law were her only close family and both Mother and Daughter (beneficiary) didn’t need income from the annuity now or later – this was a true legacy asset.
 
The Annuity was a Variable Annuity purchased by mom 12 years earlier and original deposit was $200,000. (Note: VA may not have been suitable at the time of purchase, but that is water under the bridge now) The base fees on the VA were almost 2.0% and she had an income rider and guaranteed death benefit rider for another 90 basis point cost.  In short, the total fees including the sub accounts were close to 4% and with this fee drag, she had averaged only about 2.4% over the 12 years.
 
Current Annuity Value was $259,000 & Death Benefit was $259,000
Income Value account was only $190,000 and had a special 10% income option (LIFO)
Mom was in a net 15% tax bracket and Daughter (beneficiary) was in a 35% tax bracket.
 
After analysis, we set on a plan to annuitize the annuity for Mom with a 10 year period certain. This would spread the tax due over those 10 years and would be paid at Mom’s rate until death.  Hopefully Mom will be around for most or all of those 10 years. Since Mom didn’t need the income, an investment account would be set up to dollar cost average the income payments at an assumed net yield of 5%.
 
Expected Results after 10 years.
 
Current tract: In 10 years, Variable Annuity would have been worth about $330,000 and $130,000 would be taxable to the daughter at her higher tax rate and paid out subject to IRS rules.
 
Recommendation: Annuitize and create Investment account to accept funds over time. In 10 years, Investment Account should be worth about $340,000 with no tax due.
The SPIA created $2,150 of monthly payments for 10 years – net after mom’s tax rate applied to taxable portion of payments.
 
Clients loved the analysis performed by their Advisor.  In speaking with the daughter (his client), she would much rather receive an investment account from mom worth about $340,000 after tax rather than $330,000 tax deferred account with tax due on $130,0000. 
 
Note: Ancillary Benefit – The Advisor received a 3% commission on the Immediate Annuity ($7,700) and control of the Mothers account.    
 
Hopefully you are thinking of clients where you can add real additional significance and value to their family with protection and legacy strategies.
Call for your personalized case designs today.  We are here at your service.
 

A Real Case to Share December 13, 2017

By

During the last few weeks we have worked on dozens of life, long term care, disability and annuity cases working alongside our Advisors.
If you are not discussing these issues with your clients then who will?
Life can change unexpectedly
 
If you read my last post and said a prayer, Thank You.  Larry is doing fine. The tumor was outside the brain membrane and they really do think they got it handled.  Larry can’t drive for 3 months so the move to Chicago will just have to wait.  He works for a large firm and he is on paid medical leave – He says he will just have a nice long vacation / recovery period and the team he works with will cover for him.  
 
Case 1
 
I work closely with a financial planning team that collects a fixed fee from their clients rather than a percentage of AUM.  I believe this model could be superior in many aspects if you are true to the belief of trying to avoid conflicts of interest and always doing the right thing in the best interest of your clients.  If you are interested in the Trusted Advisor concept, I’ll be happy to share my thoughts.
 
This client, a female age 70 has a nice nest egg of qualified and NQ funds and a small retirement and social security.  However she was short of her income needs by about $35,000 annually and would have to draw from her portfolio.  The planner on the team created her retirement income plan showing a net worth at age 100 of about $350,000 (all the normal assumptions used for average growth after fees and inflation of 3%, etc.).  However, she had no long term care protection and when he factored in a lump sum allocated to this protection through the AssecCare III option, her plan failed. How often would it be in this industry that that would be the end of the case for the IMO/Planner and Client.  Not with Westland…  We understood that income plan was a priority and so we had to dig further. I almost agreed, but then asked a few questions to better understand the portfolio and assumptions used.  In short, I took his plan and assumptions and created a new one showing him how an immediate annuity in the mix would help take almost all the stress away from the portfolio distribution requirements and allowed her remaining assets to grow.  The result was that she would now project to have a net worth of over $1,500,000 at age 100 and could afford to consider LTC protection.
 
The financial Planner, Estate Planner and Money Manager on the team agreed and we are making this happen.  Under a traditional AUM model, there would be a little more hesitancy with some planners to make this recommendation, since we were using a $500,000 portion of her NQ assets for the SPIA. Of course this would normally amount to a good chunk of the Planners ongoing income under a fee for AUM model, but have no effect on the fixed fee model. I would love to introduce you to a couple of planners using this fee model with great success – call or E-mail me.  Tim Morton (800)238-8144 x127 timm@westlandinc.com
 
Case 2 – Annuity Income
 
Client is age 65 with $350,000 and wanting this portion of his money out of the market – No risk!  However he needed about $1,000 per month of income from these funds, plus growth to supplement his retirement income needs.  We proposed that he take $36,000 and keep this in cash and draw from it for the next 3 years.  The other $314,000 could be placed in the Core 7 Indexed Annuity with an increasing payout beginning in year 4.  The guaranteed payout would be about  $18,000 in year 4 and likely to be $20,000 plus.  With increasing income each year in the future when the index is positive. We were able to achieve what this client needed with nearly no worries about his retirement income needs for the rest of his life.  Click on this link for the illustration sample – Core Income 7, 65 year old $314,000 Rising Option

A real case to share November 9, 2017

By

I’m sure you have many relationships where your clients are already retired and they have assets that are above what is needed to sustain lifestyle or income need – true legacy assets. We worked with one case just like this for an advisor to maximize a legacy plan.  First consideration was a second-to-die life insurance plan and second was Roth Like IUL Accounts for the kids.  If you are not putting these ideas in place for your clients, who are doing OK financially and have good health, then you are really missing the boat.

 

This couple: Ages 62 and 61 had $165,000 in an ILIT and were adding $17,000 annually.  The ILIT was funding two 30 term policies of $1,500,000 for him and $1,000,000 for her.  They set this up 7 years earlier at age 55.  So the term would only take them to age 85. Their new Financial Advisor and the Estate Planner on his team recommended closing the ILIT because they only had a net worth of just over $2,300,000 and they had pension and rental income with cost of living adjustments (COLA).

 

We looked at many options and decided on recommending that the $165,000 be moved into a $2,000,000 second-to-die policy with an additional annual premium of $13,691.  This was Guaranteed UL to age 120.
Guaranteed IRR (taxable equivalent) at death of second life from Prudential (A+) SUL.
            At age 90                     8.92%
            At age 95                     7.11%
            At age 100                   5.78%
            At age 105                   4.95%
Very tough to beat those numbers, especially when you can use the word Guaranteed.

 

Second Piece of the Puzzle was the Goal of Helping the Kids.  Goal to gift $100,000 to each child over time. Recommended solution IUL:
Summary of Index Universal Life illustrations for kids:

 

Daughter (nearest age 25) ($5,000 X 20 Years = $100,000 deposited)
$1,252,359        Estimated Account Value at age 70
$120,612        Estimated tax free annual supplemental retirement income at age 70
$1,325,526        Estimated Life Insurance at age 70 (initial $307,037)

 

Son 1 (nearest age 30) ($5,000 X 20 Years = $100,000 deposited)
$874,396           Estimated Account Value at age 70
$83,230           Estimated tax free annual supplemental retirement income at age 70
$926,517           Estimated Life Insurance at age 70 (initial $179,888)

 

Son 2 (nearest age 32) ($5,000 X 20 Years = $100,000 deposited)
$756,080           Estimated Account Value at age 70
$71,966           Estimated tax free annual supplemental retirement income at age 70
$801,150           Estimated Life Insurance at age 70 (initial $166,212)

 

This couple was also highly considering that they would require their children to pay the premiums after year 10 so they would have some discipline and skin in the game.
 
Do you wish you had parents like this?
 
Hopefully these ideas will get your juices going and thinking of clients where you can add real additional value to their family with protection and legacy strategies.

 

A case to Share October 26, 2017

By

Case
Key Person and Executive Benefit
 
A top advisor requested a case design for a 70 year old female who ran a significant 350 employee business and was still the backbone of her firm. He sat on her Board of Directors and the chairman asked, what would happen to the organization if she wasn’t here tomorrow?

 

This created a lively discussion…

Luckily he was on the board and suggested a key person policy, but with a twist! Since she was also looking for personal insurance that could be transferred to her at retirement – the $1mm key person insurance was split between a permanent policy and a 10 year term policy.  Of course he had to refrain from the vote by the board to approve at a subsequent board meeting, but he got the deal after some clever research and working with Westland.

The term insurance was simple enough.  10 year term $500k 70 year old Standard Non-Smoker
$4,390 Annual Premium (Lincoln came out on top recommended)
$500k IUL with Guarantee DB and rapid cash build up
$47,853 Annual premium first 10 years
(NACOLAH Rapid Builder came out on top recommended)

Call Nancy Woo – Fantastic resource. Let her walk you through this illustration. (800)238-8144

If she passed away unexpectedly, The corporation receives the death benefit to offset potential revenue loss and to find her replacement.  The corporation also keeps the cash value of the IUL on its balance sheet to offset and make the net cost of the IUL potentially less expensive than the term insurance.

At full retirement, the permanent policy will be considered as a possible executive retirement benefit and could be transferred to the executive (so could the term for that matter).  Of course, this would be a taxable event to the executive, but the corporation could use part of the cash value for a bonus to the executive to offset taxes due and give her a reduced death benefit policy that she could carry on her own moving forward.
After 10 years, the death benefit could be nearly $1mm with less than $500k spent in premiums offset by over $500k in cash.  Basically the corporation could potentially cover their executive for key person insurance for free and have an option to negotiate an exit benefit using the cash value to fund it.
 
Ask all your clients’ questions like, what would happen if you were not in the picture any longer tomorrow? If you could no longer work? If you needed to start writing checks for long term care expenses? Don’t gloss over these items, but truly listen to their answers and dig a little deeper into the emotional needs. Then give Westland a call and let us help you develop the best and practical approach to solving the need.
 

Hopefully these ideas will get your juices going and thinking of clients where you can add real additional value to their family with protection and legacy strategies.

Call for your personalized case designs today.  We are here at your service.

A few cases to share September 28, 2017

By

Case 1:
Sometimes it pays to go back through your files and look for opportunities to make a difference.
 
An Advisor was reviewing a client file on another matter and noticed a note he had made, but forgotten about. This client had applied for a “Asset Based” LTC solution almost two years ago and was declined because of a medical issue that seemed to be an anomaly. Basically it was blood work that wasn’t consistent with the individuals apparent health. “Something they ate prior to blood work when fasting was necessary”.
 
So he gave us a call, described the medical findings and that recent doctor visits were for routine issues and a physical that all showed nothing new to report and that all was normal. We ran AssetCare, MoneyGuard and John Hancock and settled on MoneyGuard with inflation as a recommendation.
 
WAH LAH
Client now has long term care protection guaranteed for life. Advisor rolled a CD and added $8,500 to his income.
 
Make sure you have a tickler system and that you are requesting copies of life insurance, long term care and disability policies for your files. Just by doing this alone – clients will know that you also handle insurance and by reviewing client files looking for gaps in protection you can make your business soar! We are here to help with the review of any product or existing policy.
 
Note: On another case that was denied, we found the client was just a little too honest in the medical interview process. He mentioned lower back pain and it was not yet mentioned to his doctors or recorded in his medical records nor was there ever any treatments. Underwriters don’t like unknowns.

 

Case 2:
Amazing opportunity to assist with the a couple (ages 57 & 47) Physician and his wife who had a $40 million net worth and $1 million plus annual income. 90% of their net worth is in property, They own a popular strip mall set of buildings in a high traffic tourist area. They requested pricing for $10 million second-to-die policy to assist with estate and legacy planning and they have a special needs daughter. The advisor is still working with the Estate Planning Attorney and other Advisors on the team, but this was something they wanted to get in place sooner than later. It is nice to have a motivated client.
 
Three Choices originally presented – then Premium Finance Option:
 
Lincoln $40,828
NACOLAH $54,988
Minn Life $71,937
 
Minnesota Life is the most costly, but is guaranteed for lifetime. It’s paid to age 100 on wife. (30 years of expenses expected $2,158,110)
 
North American is in the middle, DB is guaranteed for 27 years but projected to carry for lifetime. Again paid to age 100 on younger wife. (30 years of expenses expected $1,649,640)
 
Lincoln is the most cost effective option. DB is guaranteed for 19 years but projected to Husband’s age 102. (30 years of expenses expected $1,224,840)
 
Premium Finance Option? Minn Life 7 pay premium of $389,488 (total premiums $2,726,416, but financed with only $872,878 out of pocket. Click here for Ledger. We are still working on a few revisions, but this is a case that should be place shortly.

 

Call for a personalized case design today. We are here at your service.

 
Corporate headquarters | 13520 Evening Creek Drive North, Suite 360, San Diego, CA 92128 | (800) 238-8144 - Contact Us

For Professional Use Only-Securities offered through The Leaders Group, Inc. Member FINRA/SIPC 26 W. Dry Creek Circle, Suite 575, Littleton, CO 80120, 303-797-9080.
Westland Financial Services, Inc. is not affiliated with The Leaders Group, Inc. Westland CA Insurance Lic #: 0785972