Author : Your Money

Helping clients make informed decisions is crucial to selling financial products – especially when it comes to life insurance. Finding the right coverage amount for your client requires you to fully understand your client’s needs without over-insuring or suggesting a policy outside of their budget. We’ve put together this guide to help you pinpoint the best-fit products for your clients so you can help them reach their financial goals without overspending. Understand your client’s needs and goals There are no one-size-fits-all life insurance policies. Like all financial products, they are nuanced and tailored to the client. Having a solid understanding of your client’s financial needs and goals will play a pivotal role in finding a coverage amount that makes sense. To do that, you must first get to know your client. What’s their current financial situation? How many dependents do they have and what is their debt ratio like? Most importantly, what are their financial goals? Whether they want to pay off a mortgage, fund a child’s education or plan for retirement , understanding the kind of coverage they need can help you find their best-fit plan. Evaluate existing financial obligations Financial obligations will have a large impact on the coverage amount your client will need. What loans do they have? Mortgages, student loans and even credit card debt will need to be paid for if their income stops due to a critical illness, disability or death. Beyond that, consider your client’s day-to-day lifestyle when putting together the coverage amount. Life insurance is designed to make sure finances stay consistent when a loved one dies. To make that happen, the policy they choose should be enough to maintain the lifestyle they’re used to. Consider their family Your clients’ dependents will influence the amount of coverage and how they will use the policy. The age of their dependents will also influence the amount of coverage — the younger they are the more financial support they might need in the long run. Life insurance can help your client’s spouse if they die or become unable to work due to disability or critical illness. Understanding if their spouse is the focus of their protection can help you evaluate an appropriate coverage amount. They might be looking for protection that’s specific to the future of their children. Help them decide on an amount that will help support those futures. College tuition, healthcare, or helping them buy a home of their own should be considered when deciding on a policy coverage amount and term length. Understanding your client’s family is critical to understanding their life insurance needs. Take all of that information into account when deciding what coverage amount makes the most sense. Calculate the term length Calculating the duration of the coverage will influence the amount of the policy. Consider what that term looks like for your client. Even so far as the type of insurance can be identified. They might be looking for a policy that lasts the rest of their life (permanent or whole life insurance) or just coverage designed to last a designated period (term life insurance). While permanent life insurance policies can be straightforward, you might have to help them identify the length of coverage if they opt for a term life insurance policy. Most term life policies come in increments of 10-year durations. Depending on what your client needs to cover, they might decide on a shorter or longer length of time. For instance, if they’re using the policy to cover the length of their 30-year mortgage, they might opt for a term length of 30 years. Similarly, if they only want extra coverage to support them while their child is in high school and college, they might choose a policy that only lasts 10 years. Find a balance between affordability and protection One of the most crucial aspects of helping your clients find the best coverage amount is striking a balance between affordability and protection. Imagine a line graph where budget sits at one side, while coverage lines the other. A good life insurance agent can pinpoint the medium amount between those two and suggest it to their clients. It’s easy to fall into the trap of selling your clients more than they need (it’s good for business and guarantees they have enough) — instead, look for a coverage amount that is both cost-effective and meets every need your client has regarding their financial goals. Educate your clients Above all else, keep your clients educated and informed as you decide what coverage amount makes the most sense. Simplify any insurance jargon for them and help explain any complex insurance terms or concepts. Provide examples to help your clients visualize the impact of different coverage amounts so you can conclude on an amount that works all around. By supporting your client with this information, you can foster a long-lasting relationship and solidify yourself as a trusted advisor. Give them the space to ask as many questions as they have. You can highlight the importance of a personalized policy that fits their needs, but doing so will require that they understand why a given coverage amount makes the most sense. Find the right coverage with Symmetry Your success as a life insurance agent can hinge on your ability to properly estimate the best amount of coverage for your clients. By understanding your clients (and their needs) you can more accurately assess how much their life insurance product should cover. Everything from the size of their family to their retirement goals should be taken into account while discussing life insurance with your clients. Being diligent with this information will give you an edge when working with clients and make you a more reliable authority on life insurance.

Tax season is just around the corner, and your clients might be curious about tax impacts on their life insurance policy when filing this year. Taxes are a minefield of red tape and obscure laws, and sitting with your clients to discuss how life insurance gets taxed can give them some peace of mind and guidance this year. Here we will break down four specific areas where taxes do or do not come into play. By keeping yourself educated on the specifics, you can help your clients be prepared for this tax season. Key takeaways: #1: Tax-free payments The first thing for your clients to know is how their policy payments are being taxed (or the lack thereof). Since life insurance policies are chiefly intended to support the client’s beneficiaries, the IRS categorizes them separately from other financial products. Under most circumstances, premiums paid on a life insurance policy are tax-free. Your clients’ payments to their policy will not garner any additional payments to the IRS and instead will count only toward the policy itself. There are some exceptions to this, for instance, if the client has a life insurance policy through their employer (and the employer pays more than $50,000 in coverage) then the IRS will consider this income and it can be taxed. #2: Death benefits Who your clients choose as their beneficiaries is important to the reason behind their purchasing a policy. They want to know that the investment they’re making is going to financially support their loved ones when they’re no longer around. With that in mind, they’ll be curious to know how the death benefit is affected by taxes. Good news for your clients: life insurance death benefits are typically not subject to taxation . Specifically, death benefits that are paid in a lump sum are not ordinarily taxed. However, if the beneficiary instead receives installments that include interest it might be taxed. Similarly, your clients can rest easy knowing that their death benefit is exempt from creditors in most cases . The exception to this would be if your client’s beneficiary is their spouse and the debt they have involves a loan that is co-signed by the beneficiary. #3: Annuities Annuities are popular savings vehicles for your clients preparing for retirement. With an annuity, your clients can invest in their life insurance products to generate an additional stream of income later in life. While they’re paying their premiums (also known as the accumulation phase) they’ll be happy to hear that their money is growing tax-free during the lifetime of their contract. However, once your clients begin drawing on the annuity, they will want to be more aware of how it’s being taxed. The money generated by the annuity (even though it accumulated without being taxed) will be considered an income and as such liable to be taxed. If your client decides to draw on the annuity before it matures completely, they may be subject to even more monetary penalties and higher taxes. With that in mind, they’ll want to be sure to discuss any earnings with you before deciding to withdraw. Still, there are riders like the income rider that can help them avoid those harsher penalties. With an income rider, your client can use the annuity’s tax-free earnings at any time instead of waiting for the specified age attached to the product. Beyond that, you might also consider discussing critical illness riders with them that waive certain penalties if they are diagnosed with an illness during the covered term. Ultimately, annuities are an excellent vehicle for your retirement-planning clients. While their payments will be tax-free, they might end up paying taxes once they start drawing from the final amount. #4: Cash value policies Speaking of retirement vehicles, if your clients are interested in a whole or universal life insurance policy, they might also be looking into the benefits of a cash value component . A cash value option is ideal for clients who have maxed out other retirement options like IRAs or 401(k)s. This April, your clients will be especially grateful for the tax-free benefit of opting for a cash-value policy. All the money saved will not be taxed and can grow so long as the policy is in force and your client is still making payments to the policy. However, there are instances where your clients may have to face taxes when accessing the cash value of their policy. Your clients will have a few different options when it comes to using the cash value of their coverage. They can make partial withdrawals, borrow against the amount of the policy, surrender the coverage or even use the cash value to make payments on the policy. Depending on the length of time the cash value has matured, any of these options can result in taxes for your client. The deciding factor will normally be influenced by the amount being withdrawn . To that end, surrendering the policy will typically be the option most commonly taxed. If you have clients considering a cash value policy, be sure they understand the effects of each option when it comes to using the accrued amount. While their payments will grow tax-free, it’s less likely that drawing on the cash value will be similarly affected. Help them prepare with Symmetry Taxes are a struggle, and your clients might have questions about how their life insurance is being taxed and what they need to know when filing. By keeping yourself educated on what is tax exempt and what needs to be claimed, you can keep your clients up to date and prepared for this tax season. They’ll be happy to know how much life insurance grows tax-free.

As of February 2023, Americans have racked up $925 billion in credit card debt. That’s ‘billion’ with a ‘b.’ Beyond that, mortgage rates practically doubled in 2022 while student loan debt has hit a staggering federal balance of $1.64 trillion (which accounts for over 92% of all student loan debt). While there is some semblance of a light at the end of the tunnel for some of this debt, many Americans are having to dig themselves out of a debt-sized hole that gets bigger every day as the cost of living increases and the average wage lags much further behind. As a life insurance agent, the bulk of your clients are inevitably facing debt, but there are solutions you can arm them with to eliminate debt and tackle their financial goals. Here we will break down six tools you can offer your clients (whether strategies or products) that they can use to achieve a debt-free life. #1: 50/20/30 budget When it comes to eliminating debt, focusing on your eventual goals is critical to the success of the strategies you use. In the case of the 50/20/30 budget, you can offer a simple idea to help your clients visualize their goals. 50/20/30 refers to the percent of your client’s monthly income that they should be budgeting for. This budgeting tool uses three categories: “needs,” “wants” and “savings/debt.” 50 percent of their monthly income should be allotted for needs (bills, groceries, living expenses), while 20 percent should be spent on wants (entertainment, eating out or a new pair of shoes you might not need). 30 percent of their income should be focused on savings and paying off debt. Your clients will be drawn to the simplicity of the 50/20/30 budget. It uses an easy formula to draw boundaries on how their monthly income should be spent. More than that, it’s not a particularly rigid budget, so it’s easier to stick to. #2: Snowball or avalanche debt payoff methods (pick your strategy) There are plenty of methods for tackling debt. Some methods give your clients time to slowly chip away at their loans, while others require more financial sacrifice to eliminate them in less time. The snowball and avalanche methods (respectively) give your clients two concrete choices on how to eliminate their debt. The snowball method is designed for your clients that struggle to put more toward their loans. By ordering their loans from the smallest to largest and tackling them one at a time your clients can build momentum to eliminate their debts systematically. The snowball method is ideal for individuals who are motivated by the easy progress of paying off smaller debts and working toward those higher-end loans. The avalanche method takes a more fast-paced approach to eliminate debt. With the avalanche method, your clients will focus on their loans with the highest interest rate and work down the list. While paying the minimum payments on the rest of their debt, the avalanche method is best for clients who have more disposable income. They won’t see as much initial progress as your clients using the snowball approach, but they will ultimately pay those loans off in less time than other methods. #3: Tracking spreadsheet Simple and effective, spreadsheets are a great way to keep track of expenses, financial goals and debt. Your clients can benefit from keeping a detailed account of where their money is coming from and what it’s being used toward. By maintaining these details, your clients can manipulate the spreadsheets to understand when certain loans can be paid off and what small changes to their spending will speed that process up. Excel and Google Sheets are both great inexpensive options, and your clients can find plenty of free resources online to sharpen those spreadsheet skills. #4: Find a budgeting app At the end of the day, few tools get it done like phone apps. They’re typically easy to use and always within reach, and for that reason, they’re a great resource for your debt-saddled clients. There are apps for budgeting, monitoring spending and even rolling your pennies into savings which add up to amounts your clients can use to make large, one-time payments. More specifically, apps like Quoin and Undebit.it  are virtual debt pay-off tools that your clients can use for thoroughly automated debt tracking. Both options will help track your clients’ income and payments while offering a list of strategies they can deploy to tackle them. Both apps do require payment, but there are a host of free budgeting apps that they can use instead. #5: Work with a fiduciary Working with a fiduciary is a great option for your clients who feel more comfortable letting others take the debt elimination wheel. A fiduciary can be a family member, trusted co-worker or experienced professional — your client can choose whomever they want to handle their finances. Whomever they choose, your client’s fiduciary has the role of finding the best investment vehicles and money management to best serve the client. While these services have traditionally been expensive, our parent company, Quility, has created Quility Financial Advisor (QFA), providing financial planning for middle America. Regardless of your client’s financial situation, an advisor with QFA can help pinpoint where they can improve their financial portfolio and look for products to help them meet their goals. #6: Debt Free Life® An example of one of those products, Debt Free Life (DFL), is our proprietary answer to your clients who are buried in debt. DFL harnesses the power of a life insurance policy to help your clients achieve financial freedom without spending more than they already are and in fewer years than it would traditionally take. As a Symmetry agent, you can help your clients with a payment plan that will systematically tackle their debts using the tax-deferred payments of the policy. Selling DFL does require certification, but is a great product to have in your wheelhouse when working with clients hoping for a debt-free future. Eliminate debt with Symmetry Debt is something that most Americans deal with every day. It’s important to have answers for those who are looking for a