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Spring 2003
Volume 7, Number 1
Kim's
Korner
The first few months of 2003 have been unsettling, to say
the very least. The Iraq war, SARS, roller coaster markets and freakish weather, have all
conspired to create a challenging, and dare I say negative, environment within which to
work and live.
As I write this in mid-April, many of our insurers are
cautioning about underwriting clients traveling to Asia, Hong Kong, Viet Nam, and
Singapore. And, of course, anyone traveling to the mid-East will have to apply for any
coverage they want only after they've returned safely home.
As a result of all the uncertainty out there, our office
has seen an upswing in life applications, but mostly for term sales, i.e. T10 and T20.
Fewer UL sales are being made, as clients are hesitant to expose any more money to
equities or risk. This creates a challenge for agents to properly sell the advantages and
benefits of universal life. Remember, UL is a permanent product that offers the client-
control of their tax sheltered accumulation, flexibility, creditor protection and the
opportunity for cash withdrawals later on to possibly supplement their retirement income.
To protect yourself against potential problems, illustrate the product you're selling at a
conservative rate (4% or 5%) and use variable rates. This will help to illustrate the
impact of equity investment because the client will never receive the same credited
interest rate year after year. Also if your client chooses to pay only the minimum
premium, actually increase the premium by a small amount to help build a cushion should
the policy earn less than illustrated. And, for clients who choose to pay for a certain
amount of time, i.e. 10 years, plan for them to pay 11 or 12 years, as this will, again,
help to create a cushion and guard against future lower rates and potential lapses.
Living benefits should also be part of your sales
presentation. It is your fiduciary responsibility to talk to your clients about critical
illness insurance and long-term care insurance. Are you? Don't get bogged down in knowing
the details of every definition know one or two products (like you do for UL) and present
them to your clients. For assistance with your marketing or sales ideas, please contact me
to review and discuss the various products and their details. Also, if you're really
serious about learning about living benefits, subscribe to the website
www.criticalillnesslearning.com. For the small fee (you'll more than recoup it with your
first sale), you will obtain a vast amount of information and knowledge. It is well worth
the investment - of both your time and money.
In these tough times, don't neglect your clients. Talk to
them and assure them. Review their situation and confirm that the financial plan in place
still does everything they want it to do. Remember client service will differentiate you
from your competitors.
At Taylor we continue to strive to provide you with
outstanding service and support. Don't forget to tell your colleagues and friends about
us.
Have a wonderful Spring.
Kim Stanley
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