Human's Defense Mechanisms: Fight or Flight

By: Charlie Gipple, CLU®, ChFC®, Senior VP of Sales and Marketing, Partners Advantage Insurance Services, LLC

For our ancestors to have survived prehistoric/ancient frightening predators and harsh environments, we as humans have been given built-in defense mechanisms that have never left our DNA. Paradoxically, these same defense mechanisms are instilled in our clients’ brains and can be counterproductive to making wise financial decisions today. For instance, picture yourself about 14,000 years ago walking through the woods with your spear searching for food. Suddenly, from behind, you hear a low growl, a few thunderous footsteps, and you turn to see a saber-toothed tiger upon you. 

What goes through your mind at this point in time? Are you looking at this saber-toothed tiger and calculating the distance between you and him versus the distance between you and shelter? Do you calculate how fast you can run versus how fast he can run and then decide the success rate of escaping as this tiger’s lunch? Maybe you are calculating in your mind the odds of going head-to-head with him? In other words, are you making a left brain analytical decision at this point in time? No you’re not! Nobody can be that cool, calm and collected to make a left brain rational calculation in times of severe stress.

Conversely, this is what is happening. Your brain is moving to the tune of 268 miles per hour, and it’s telling your pituitary gland to secrete adrenaline immediately into the bloodstream. This shot of adrenaline increases your blood pressure, increases your heart rate, and actually increases the blood flow to the muscles, thus making you far athletically superior than before getting this shot of adrenaline. This “fight or flight” mechanism is what allows us a fighting chance of surviving that saber-toothed tiger. A similar example would be: we have all heard stories of a distressed mother pulling a car off her baby. Adrenaline and “fight or flight” is a powerful thing. This right brained “fight or flight” capability is biological and has been given to us by our creator. It is what has been happening in our brains since the very beginning of our existence. This is why we exist versus being extinct by dinosaurs or a saber-toothed tiger. It is what we are born with and it stays with us until the day we die.

Find out about the seven secrets: primacy bias, storytelling, simplification, power in the pen, feel/felt/found, confidence and recency bias...

DOWNLOAD the full complimentary whitepaper: Seven Secrets to Effective Communication, by Partners Advantage Senior VP of Sales and Marketing Charlie Gipple, CLU, ChFC. 

Fill out my online form.

For financial professional use only. Not for use with consumers.

67113

The Human Brain: An Amazing and Powerful 3 Pound Machine

By: Charlie Gipple, CLU,® ChFC® - Senior VP of Sales and Marketing, Partners Advantage
This is an excerpt to the full whitepaper by Charlie Gipple: "What Robo-Advisors CanNOT Do That You Can An Introduction to Behavioral Finance"

The Brain is a Powerful Thing
The date was May 6, 1954. Up to this point in time, it was clear, it was impossible. Sports scientists, medical doctors, world class athletes from across the world said it was absolutely impossible to athletically accomplish this feat. Our bone structure was all wrong. We were not aerodynamic enough. Humans had inadequate lung power and inadequate heart power. All of these excuses were used and millions of athletes tried but failed. This challenge went all the way back to the ancient Greeks and nobody could do it. However, on this day, somebody proved wrong all of the pundits and athletes before him. His name was Roger Bannister. Here is the interesting part. Over the next 12 months, 37 more people broke the 4-minute mile. In the second year, thereafter, 300 more people broke the 4-minute mile. 337 people broke the 4-minute mile within two years of Roger Bannister accomplishing this feat that was “absolutely impossible.”¹ 

What is my point? My point is it’s all psychological! The Human Brain is an amazing thing. This little three-pound thing between our ears that usually takes up about 2% of a human’s bodyweight and has 100,000 miles of blood vessels is one of the most powerful things on earth. Of course, I’m talking about the human brain. It’s that powerful! There isn’t any other animal (except for maybe a dolphin) that has the brainpower like we do. For example, although an elephant’s brain is physically larger than a human brain, the human brain is 2% of our total body weight, where an elephant’s brain is .15% of their bodyweight. Meaning humans have a very large brain to body mass which makes us one of the smartest species on earth.²

Furthermore, because we are so smart, we can predict events that other species cannot predict. For example, I know when lightning streaks across the sky, there is the sound of thunder to follow. I know that if I am on the street and there is a car coming towards me from ½ mile out, to get out of the way. I can predict that if I bring home a Harley Davidson today, to my wife’s surprise, I will be single the next day. We have predictive capabilities that no other species on earth has.

Here is the paradox, however, because we are so smart we are also so dumb. Because we can predict things that other species cannot predict, we tend to think we can predict things that are impossible to predict. This is an example in behavioral finance of what is called “Overconfidence Bias.” Have you ever seen a client that thinks they can predict the stock market and makes irrational decisions as a result? Have you ever run into a client that believes they do not need life insurance because they will live to a ripe old age? Have you ever spoken with a client who says he will never need long-term care because he/she will “just die”? The problem is, markets are unpredictable, mortality is unpredictable, and morbidity is unpredictable! There are some things in life that are hard for a human being to predict, unlike hearing the sound of thunder following a lightning strike. This “overconfidence bias” is an example of the 117 documented biases that behavioral finance studies and works to find solutions for.³

If you would like a copy of this whitepaper please contact our Partners Advantage Marketing Team at 888-251-5525, ext. 138 or email news@partnersadvantage.com.

For financial professional use only. Not for use with consumers.

¹ Mackay, Harvey, 1988, Swim with the Sharks.
² “Thinking About Brain Size,” http://serendip.brynmawr.edu/bb/kinser/Int3.html, last accessed 3/10/16
³ Source: “Conquering Concerns: Selling Through Behavioral Biases”

43990

IUL: Cost Is An Issue Only In The Absence of Value

By: Charlie Gipple, CLU, ChFC, SVP Sales and Marketing at Partners Advantage Insurance Services, LLC

I had a mentor many years back who had done very well in financial services and had made a great deal of money. While I was talking with him one day on the phone, he brought up he had just purchased a Ferrari. At this point, me being fairly frugal and understanding there is no worse “investment” on earth than automobiles, I said, “what are you thinking buying a $200-$300k car? How can any car be worth this much money?” After firing back with a couple of choice words which I cannot put in this article, he told me a phrase I will never forget. He said “Charlie, cost is an issue only in the absence of value. Is this car costly to me? Yes. However, if to me the value eclipses the cost, why would I not buy it?”

The issue of cost is brought up very frequently during conversations around life insurance and especially permanent life insurance. Of course this is perpetuated by the pundits such as Suze Orman and Dave Ramsey who consistently make the blanket statement that permanent insurance is too costly and one should buy term and invest the difference. So, as I do indexed product boot camps across the country, my job is to educate the agents on why IUL is not so expensive if designed correctly and how the agents can explain this to their clients.

Learn more in the full white paper "IUL: Cost Is An Issue Only In The Absence of Value," by Charlie Gipple, CLU, ChFC.  Gain insights on how to show your clients tax advantage opportunities IUL policies offer and walk them through a hypothetical scenario that shows them IUL policies can be quite reasonable in price.

Fill out my online form.

For financial professional use only. Not for use with consumers.

Indexed Universal Life is not a stock market investment and does not directly participate in any stock or equity investments. Market Indices do not include dividends paid on the underlying stocks, and therefore do not reflect the total return of the underlying stocks; a market-indexed insurance product is not comparable to a direct investment in the equity markets. Clients who purchase IUL are not directly investing in a stock market index.
Pursuant to IRS Circular 230, Partners Advantage Insurance Services and their representatives do not give tax or legal advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Encourage your clients to consult their tax advisor or attorney. The information contained in this article is not intended to serve as tax or legal advice and is not intended to provide financial or legal advice and
does not address individual circumstances.

Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with an accrued loan interest, will reduce the policy’s account value and death benefit. Assuming a policy is not a Modified Endowment Contract (MEC), withdrawals are taxed only to the extent they exceed the policy owner’s cost basis in the policy and usually loans are free from current federal taxation. A policy loan could result in tax consequences if the policy lapses or is surrendered while a loan is outstanding. Distributions from MECs are subject to federal income tax to the extent of the gain in the policy and taxable distributions are subject to a 10% additional tax prior to age 59½, with certain exceptions. These characters are fictional and are not actual customers. Your own decisions should be made in light of your own financial situations. This hypothetical examples used are for illustrative purposes only, is no guarantee of return or future performance, and does not depict the actual performance of a specific product or its investment options.


51766

Taxes for 2017 and Beyond

By: Bill Jackson J.D., CLU®, Sr. Advanced Markets Consultant at Partners Advantage Insurance Services, LLC

With tax reform being a major part of President Trump’s platform and both houses controlled by the Republicans, many are wondering “how the tax environment will change.” All professionals in the financial services industry will be asked about this hot topic because it directly impacts financial plans our clients are implementing.

It is important to understand that tax reform is complex. It has been 31 years since the last major overhaul. With the deficit at 21 trillion dollars, any changes will need to be relatively revenue neutral. Changes will also require that the executive and legislative branches be on the same page. There are many differing views on this subject, even for members of the same party. Nevertheless, there is a better chance that significant changes will be made than at any time in recent history.

An important planning concept in a potentially changing tax landscape is flexibility. It will also be important to keep in close contact with clients to monitor planning solutions in light of changes that are being made. 

Let’s focus on some of the proposals being made. 1The most important change to personal income taxes would be the simplification of rates to 12%, 25%, and 33%. The cutoff points for Joint filers would be at $75,000 and $225,000, and for Single filers, it would be $37,500 and $137,500.

There are several provisions slated for repeal, the Medicare Hospital Insurance of .9%, the 3.8% tax on investment income, and the Alternative Minimum Tax. 

Aside from mortgage interest, charitable contributions, and state and local taxes, itemized deductions would be lost. Even these deductions would be capped at $100,000 for single filers and $200,000 for joint filers.

To compensate for lost deductions, personal exemptions would increase to $30,000 for joint filers and $15,000 for single filers.

The Federal Estate tax would be repealed.  However, gift and generation skipping taxes would remain intact. Revenue would be boosted by eliminating the step up in basis for capital gains to the extent that the value of the estate exceeds $10 million. However, transfer of appreciated property to relatives or a private charity would not be allowed.
From a business standpoint, corporate rates could be reduced from 35% to about 20%. Pass-through income would come down from the current 40% rate to 25%. Revenue loss would be made up by a 20% tax on imports and a 10% tax by repatriating foreign profits of U. S. corporations.

If these changes come into play, there is no guarantee that they will continue in future administrations. It is still prudent to provide financial security in estate planning situations regardless of the current estate tax environment. Fortunately, the retirement planning space has not been changed and is still provided with the incentives we are all familiar with for annuities and life insurance. The major takeaways are to provide clients with flexible solutions and make sure that you are monitoring client accounts frequently. 

Contact William “Bill” Jackson, Sr. Advanced Markets Consultant at 888-251-5525, ext. 361 with any advanced case design questions or concerns.  He’s here to 

HELP YOU present better strategies!

1Deloitte, 2017 Essential Tax and Wealth Planning Guide, Post-election tax policy update - Impact of the 2016 elections, Installment Two.

For financial professional use only. Not for use with consumers.

Partners Advantage Insurance Services and their representatives do not give tax or legal advice.  Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.
The tax and estate planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice. Partners Advantage does not provide legal or tax advice. Partners Advantage cannot guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of such information. Federal and state laws and regulations are complex and are subject to change. Changes in such laws and regulations may have a material impact on pre- and/or after-tax investment results. Partners Advantage does not assume any obligation to inform you of any subsequent changes in the tax law or other factors that could affect the information contained herein. Partners Advantage makes no warranties with regard to such information or results obtained by its use. Partners Advantage disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

120278

Financial Professionals Should Choose an IMO that Can Provide New Growth Opportunities, Training, Education, and a Support Team

Experience the Advantage
We Make Growing Business Easy.^SM

Why Partners Advantage?
Partners Advantage focuses on providing added value to independent financial professionals and agencies through training, specialty services, enhanced case support and business planning. In addition, each of our contracted agents receive an assigned Brokerage Director and New Business Case Manager that can help the agent with their training and cases’ status. Partners Advantage has access to several insurance companies in the United States, with distribution contracts with over 50 major insurance carriers. Our current office locations are in Florida, Irvine, CA, while the main office is located in Riverside, CA.  

As our economy and industry continues to change, Partners Advantage provides you with leadership, resources and outstanding customer service to continue to grow your business. Together, we can adapt to change and thrive in this changing environment.

How do we "make growing business easy"? 
We accomplish this with our cutting-edge sales technology, vast experience and expansive growth via mergers and acquisitions; providing new growth opportunities within the industry; and our training and education first philosophy. We put what we've learned from our many years in the financial services industry to work by helping financial professionals and agencies to innovate, expand and thrive.

There’s all of this and much more to help YOU better serve your clients! Partner with us and strive to achieve our VISION of keeping American families protected and secured throughout every stage of life.

If you would like to PARTNER with us, please contact our Partners Advantage 

Relationship Coordinating Team at 888-251-5525, ext. 389.

For financial professional use only. Not for use with consumers.

Becoming a member of The PILLAR System may be dependent on various factors including but not limited to production requirement and PILLAR carrier contracts placed with Partners Advantage Insurance Services, LLC.

Partners Advantage Insurance Services, LLC reserves the right to change the requirements of the PILLAR System at their discretion. Results may vary, this communication does not constitute an offer or guarantee. Participating agents will need to be properly licensed and may be subject to screening. Participating agents must adhere to all federal and state compliance and market conduct standards. Additional terms and conditions to be set forth in an agent agreement between Partners Advantage Insurance Services, LLC and the agent.

All rights reserved, trademark pending.

119881

Understanding Generational Differences to Enhance Your Sales

By: Oscar Toledo, Director of Sales and Marketing, Partners Advantage Insurance Services

Our market space continues to evolve, and the better you understand that different generations have very distinct views about products, politics, religion, careers, and just about everything else, the more successful you will become. 

Sales techniques that are effective for one generation may come off as “pushy” for another. Generational differences are more significant in marketing and selling now than at any other time in our history. For one thing, there are currently more generations alive and active than ever before, as modern medicine and affluence have produced a revolution in longevity.

We need to try to understand how customers’ backgrounds affect their buying preferences. As an example, during my fact finder with a prospect, I begin with questions such as:

• Where are you from and what was it like growing up? 
• What did you learn about money growing up?
• What was the hardest lesson you’ve had regarding money?

I do this because the information they will share with me during the first half of the meeting will allow me the opportunity to better understand their buying preferences, and just as important, build rapport with them.

Contact Partners Advantage for complete training and sales assistance at 

888-251-5525, Ext. 700

Read the full article: “Better Understanding Generations to Enhance Sales” here. 

Fill out my online form.

For financial professional use only. Not for use with consumers.

Always follow your firm’s policies and procedures regarding review and use of third-party templates, creation and distribution of client and prospect materials, hosting of client and prospect events, offering giveaways or prizes, and your firm’s employment process.
Partners Advantage Insurance Services and their representatives do not give tax or legal advice.  Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.

95969