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HDF, RFA and the Female T-65 Market Agent Training Only

HDF, RFA and the Female T-65 Market Agent Training Only. TMK1536 0410. Agent training only. Not for sales use. Any policy sold should be suitable to the needs of the applicant based on their health status and financial situation. TMK1536 0510. Agent training only. Not for sales use.

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HDF, RFA and the Female T-65 Market Agent Training Only

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  1. HDF, RFA and the Female T-65 Market Agent Training Only TMK1536 0410 Agent training only. Not for sales use.

  2. Any policy sold should be suitable to the needs of the applicant based on their health status and financial situation. TMK1536 0510 Agent training only. Not for sales use.

  3. Great reasons to market High Deductible Plan (HDF) with a Reserve Fund Annuity (RFA) to T-65 Female Head of Household TMK1536 0510 Agent training only. Not for sales use.

  4. Reasons to Market HDF with RFA • Supports New Agent Training / Recruiting • It’s an Easier Sale • Annuity with Great Features • Ability to Earn Higher Commissions

  5. Supports New Agent Training / Recruiting • Instills confidence in new Agents, as they won’t get turned away as often • Agents can market closer to home as T-65 seniors do not have a current Med-Supp or Medicare Advantage (MA) with any company, minimizing price shopping issues

  6. Supports New Agent Training / Recruiting • T-65s are not yet locked into MA plans, nor do they have a Med-Sup – resulting in a higher number of ‘meaningful’ presentations • Allows new Agents to easily learn how to present HDF and sell additional products with many more viable presentations

  7. It’s An Easier Sale • Competitive Rates • T-65s may be more familiar with higher deductible plans from exposure to their previous coverage – whether employer-sponsored or individual • There are more T-65 female prospects than T-65 males, thereby increasing the prospect pool • T-65s ARE statistically healthier

  8. It’s An Easier Sale • T-65 Females who are Head of Household have assets on top of income for multiple product purchases, associated with saved assets, inheritance or proceeds from divorce (Average 50% divorce rate nationally)

  9. Annuity with Great Features • Only company we’re aware of that offers a Reserve Fund Annuity that can pay HDF claims directly from the annuity • Reserve Fund Annuity interest rate at 3% pays higher interest rates than current savings account rates being paid at many banks • Check www.bankrate.com for current, comparative rates

  10. Annuity with Great Features: No “Lock & Load” – Savings are Accessible • No lock-in time for deposits • No surrender charges • No commission loads on the Reserve Fund Annuity • $4,000 per year maximum deposit • $70,000 lifetime maximum deposit

  11. Ability to Earn Higher Commission • T-65 HDF Rates with LNL are competitive • T-65 HDF has higher commissions than • Plan F - 15% versus 12% • Multiple-product purchases proven to increase overall client retention

  12. Ability to Earn Higher Commission • HDF when sold with the RFA frees up money for the customer to buy additional coverage, where appropriate • Also generates commissions and bonuses for the Agent/Managers • Product examples: • 15% HDF commission • + 65% Whole Life commission • + 40% Life Bonus • + Extra Annuity commission for deposits • over > $4,000 at competitive rate

  13. From the Customer’s Perspective – Why HDF? TMK1536 0510 Agent training only. Not for sales use.

  14. Why HDF? • Don’t Pay For Coverage That Isn’t Needed • Financial Reality • Savings to Purchase Additional Products

  15. Why Pay For Coverage That Isn’t Needed? • Under a traditional Medicare Supplement plan, the client generally pays a higher premium that covers most of their Medicare eligible expenses • Under HDF, the client pays only for the expenses they incur up to the annual deductible, and then the coverage pays for most charges

  16. Monthly Premium Comparison (Female Turning 65 purchase) Consider the following example.

  17. Financial Reality On average, 81% of the United American Medicare Supplement population under age 68 has annual claims of $1,900 or less, with the average annual claim $500.

  18. Financial Reality (based on 2008 UA claims source data).

  19. Financial Reality • Remember, the difference between a Plan F and a Plan HDF is the cost of the premium and the annual deductible that the client must pay before policy benefits take effect • Claims could be incurred prior to the RFA being sufficiently funded to pay the HDF deductible, so be sure the client is aware of this requirement • $50/month does not fully cover the initial Part A deductible, but will cover the Part B deductible in a little over 3 months

  20. Financial Reality Agent Message: “We can help you (the client) prefund the annual deductible through the purchase of a Reserve Fund Annuity. Properly funding a Reserve Fund Annuity allows the Company to pay your providers from the annuity until the annual deductible amount ($2,000 in 2010)1 is reached. If the account balance in the RFA is not sufficient to pay the full amount owed to the healthcare provider, you will be responsible for paying any remaining balance directly to the healthcare provider.” 1Determined by Medicare and subject to change annually (www.medicare.gov)

  21. Savings to Purchase Additional Products So now our example looks like this:

  22. Savings to Purchase Additional Products What can the client do with it? Buy additional coverage! Life Insurance!

  23. Savings to Purchase Additional Products • 65-year-old, Female, Non-Smoker • $5,000 Whole Life (WLN) • $38.58 per month

  24. Savings to Purchase Additional Products

  25. Savings to Purchase Additional Products • Instead of having just one single policy, the client now has: • All the benefits of a standard Plan F • Reserve Fund Annuity to fund claims until the policy benefits take effect • Enhanced their insurance coverage by adding a $5,000 WLN policy • And still has $30.42 left over each month

  26. Agent Commissions– Why HDF? TMK1536 0510 Agent training only. Not for sales use.

  27. What type of commission can an Agent earn? Below are commissions for a Female turning 65 who purchases an HDF vs. Plan F (TX rates, area 3, non-smoker) Seems the Agent does better selling a Plan F, right? WRONG!!

  28. Premium Reallocation If customer purchases an HDF policy instead of a Plan F, the customer has a monthly premium savings of $119.

  29. Premium Reallocation What can they do with it? Open a Reserve Fund Annuity!

  30. Premium Reallocation Even after the HDF premium is paid and the minimum deposit of $50 made to the RFA, money remains.

  31. Premium Reallocation What can they do with it? Buy additional coverage!

  32. Premium Reallocation * Assuming $1,000 AP gross life submit requirement is met each week

  33. Premium Reallocation The Agent makes an additional $294 commission on the additional policies sold and an additional $545 bonus (assuming 40% bonus). Which would you prefer? $249 or $486? That’s $237 difference!!

  34. Difference in Earnings An average Agent will sell 2 Plan Fs a week. That’s $249 in commission times two policies for a weekly income of: $498 Weekly Income Selling Plan F

  35. Difference in Earnings An average Agent will sell 5 HDFs a week. With the premium savings used to fund a RFA and purchase life insurance, that’s $486 in commission and bonus times five policies for a weekly income of: $2,430 Total Med-Sup & Life Weekly Income Selling HDF

  36. Difference in Earnings $498 Weekly Income Selling Plan F Vs. $2,430 Weekly Income Selling HDF & Life That’s a $1,932 difference!

  37. Difference in Earnings Calculate that for annual earnings $25,896 vs. $100,464

  38. Oh, by the way… Customers that aren’t satisfied with their interest rate in banks or CDs… Liberty’s Flexible Premium Annuity

  39. Oh, by the way… Guaranteed minimum 4% interest rate

  40. Oh, by the way… $500 monthly deposit for 10 years x 4% interest rate $73,588 That’s $13,588 in earnings

  41. Oh, by the way… Flexible Premium Annuity does have a surrender charge: Year 1: 12% Year 4: 6% Year 2: 10% Year 5: 4% Year 3: 8% Year 6: 2%

  42. Commissions Deposits exceeding $2,000 in the first policy year, the first year commission will be 10% on $2,000 and 3% on the excess.

  43. Commissions A 1% commission will be paid on renewal premiums received after the first year. If annuity premiums are increased in the first year or in subsequent years, there will be a 10% commission on increases up to a total policy year premium of $2,000.

  44. Commissions A 3% commission will be paid on tax-qualified rollovers from an IRA with another company or bank into an IRA with LNL. There will be no commission paid for a rollover of funds from LNL policies or annuities.

  45. Commissions Unit Manager 15% of Agent Commission Branch Manager 9% of Agent Commission

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