Why Is Life Insurance Important?

Courtesy of: Protective Life

The value of life insurance cannot be overstated. Life insurance offers protection for your prospects/clients family and home in the event of their death. Help prevent financial hardship for your clients' loved ones with life insurance.

Some people may think of life insurance as just another expense. The question your prospects/clients need to consider is would someone in their life suffer an economic hardship if they were to die? If the answer is yes, then life insurance is important for them to have.

Married with children
If your prospects/clients are married and have young children at home who depend on their income, they have a clear need for life insurance. If they were to die, the loss of your client's income could cause an immediate financial hardship. Not only would this make it harder for their family to make ends meet, but for them to realize future goals such as a college education. Even if one spouse is a stay at home parent and doesn't bring in a formal paycheck, his or her death means that the surviving spouse will have additional expenses such as child care, cooking, and housekeeping - all necessary services for running a household.

Married without children or singles
Why is life insurance important if your clients' don't have children or a spouse? Just because they don't have children or are married, doesn't necessarily mean that they don't need life insurance. If their spouse or significant other depends on your client's income to keep the bills paid and to run the household together as a joint venture, then having the financial safety net of a life insurance policy is vital. And whether they're married or living the single life, who is going to pay the costs associated with their final expenses? Things such as funeral costs and jointly held debt (such as a cosigner on a loan) are just a few of the costs that they'll need to consider in the event your clients were to unexpectedly die. Unless they already have sufficient financial resources to cover these expenses, their survivors will most likely need life insurance to help pay for it all.

Having enough life insurance is just as important
The loss of a loved one is an emotional and traumatic experience for any family. But not having enough money to meet immediate and ongoing living expenses, can make a very difficult situation even worse. Not only are the people your clients loved grieving their loss, but they'll now have added financial stresses to cope with. Depending on their current financial resources and ability to get back on their feet both emotionally and financially, their loved ones could be forced to move to a less expensive home or community, forego education and career plans, and cut back on their quality of life. They may be even forced to take out loans to pay for your funeral and burial costs, as well as any outstanding medical or tax bills.

If your clients are still wondering why life insurance is important, stop them to consider the potentially devastating consequences of not having coverage to financially protect the people that they love.

Learn more about the life insurance resources available to you and your clients. If you have potential clients, Partners Advantage can guide you thru the life insurance process and can let you know which carrier would best meet for your clients' needs. Call us at 888-251-5525, Ext. 700.

You can view the original article post on Protective Life's Learning Center website:  https://www.protective.com/learning-center/life-101/why-get-life-insurance/why-is-life-insurance-important/

This material is intended for educational purposes only. You should not treat any opinion expressed as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion and experiences. Partners Advantage does not warrant or guarantee the accuracy or completeness of the information contained herein. 

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.


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Tax Cuts and Jobs Act (TCJA) Strategies

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

Tax Cut and Jobs Act (TCJA); short for “An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.” What a mouthful! I think we will stick with TCJA. One of the major areas of complexity in this new law, which is effective for 2018, is its application to pass through entities. 

As you may be aware, the top corporate tax rate has been reduced from 35% to 21%. However, with sole proprietors, partnerships, “S” corporations, and pass through LLC’s there is a 20% deduction on adjusted gross income.

The complexity arises in how and when the 20% deduction is applied. If the client has an “S” Corporation, only the distributive share is eligible for the 20% deduction. W-2 wages paid to principals are not eligible nor are guaranteed payments to the shareholders. 

To add to the complexity of this act, congress chose to limit the benefits of the 20% deduction for “service” organizations. If the business derives its income from personal service, the deduction is phased out at certain levels of adjusted gross income; so doctors, accountants, attorneys, financial professionals, real estate agents, and consultants must deal with the phase-out of the 20% deduction.   

For service organizations where the taxpayer is filing singly, the deduction is available up to $157,500 of adjusted gross income. There is a pro rata reduction up to $207,000 of Adjusted Gross Income (AGI) and over that amount the deduction is completely gone. If the taxpayer is married filing jointly, the threshold is $315,000 and the deduction is gone at $415,000 of AGI. If filing jointly, the spouse’s income is also included in determining the phase-out. 

Obviously affluent service business owners need help. Keeping income below the $315,000 threshold could provide a $63,000 deduction and save $17,640 in taxes for a pass through service business owner with and AGI of $315,000.

How can a service business owner reduce taxable income below the threshold? Most have fewer than five employees or may work alone. The ability to reduce income by buying a substantial depreciable asset is often limited. The only alternatives for reducing income are a qualified retirement plan or deductible interest payments on a loan based split dollar plan.

In the qualified retirement plan space, two options stand out. The most flexible option for a business that may have fluctuating profits is the SOLO K plan, which can allow deductions of up to $61,000 for owners over age 50. For businesses with stable profits, the defined benefit plan is a top choice. Deductions for this type of plan can easily exceed $170,000 each year for an owner participant. Several carriers like Lafayette Life, National Life Group, and American National offer plan design, plan administration, and funding media specifically designed for these plans. Options include annuities and life insurance.

With the loan based split dollar or dual loan strategy, the business takes a commercial loan and loans the proceeds to the owner to pay premiums on a personal life insurance policy. The policy is collateral for the loan and the owner pays interest at the applicable federal rate. The owner receives a higher level of protection for family and higher retirement income potential than with a traditionally funded plans. The business interest deduction often amounts to between $30,000 and $60,000.

These strategies can mean the difference between being able to benefit from the 20% deduction and not seeing any tax relief. To learn more about how these strategies work, and how they can benefit your clients, contact the Partners Advantage Advanced Markets Department at 888-251-5525, Ext. 361.

Did you miss the webinar titled, “Opportunities Generated by the Tax Cut and Jobs Act (TCJA)?” You can access the replay here >> Get Webinar On-Demand.

For financial professional use only. Not for public distribution.

Not to be used for consumer solicitation purposes. You should not treat any opinion expressed as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion and experiences. Partners Advantage does not warrant or guarantee the accuracy or completeness of the information contained herein.  

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.

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Two Insurance Marketing Powerhouses Announce Merger

FOR IMMEDIATE RELEASE

Two Insurance Marketing Powerhouses Slated to Merge 

Urbandale, March 12, 2018 - Two of the biggest Insurance Marketing Organizations (IMOs), AMZ Financial Insurance Services and Partners Advantage Insurance Services, announced today their definitive merger to further enhance and extend their insurance distribution network. The new company will be called Partners Advantage Insurance Services, LLC. The merger went effective March 1, 2018, with the companies planning to fully integrate by September 30, 2018.

The new IMO will operate out of four main office locations including three offices in California; Riverside, Irvine, El Dorado Hills; as well as an office in Urbandale, Iowa. The new company will have the breadth and reach to serve life, annuities and linked benefits at the absolute top levels. The CEO of Partners Advantage, Scott Tietz said, “With the merger, we believe we have created a robust IMO that can provide assistance to any agent, agency owner or IMO regardless of the insurance products they sell.”

“This merger is a critical piece in our long-term growth strategy,” said Allie Miller, Partners
Advantage President. “This is a very exciting time for us, and we believe that merging allows us to elevate the overall insurance industry with innovative financial products, technology,
marketing strategies, practice management and sales support, while still holding meaningful
relationships with our valued distribution partners.”

The merger will usher in a revolution in the independent insurance distribution marketplace and the new services provided through the company will result in greater efficiencies. “Our clients will continue to enjoy the same quality services.” Commented Joe Zuccolotto, Chief
Operations Officer of Partners Advantage. “We have been working together for months to
make this transition as smooth as possible for our agencies and agents.”

About AMZ Financial:
Founded in 2000, AMZ Financial is the only independent marketing organization with a proven track record in developing and distributing Indexed Universal Life products. To date, we have developed 10 products with the industry's most recognized life insurance carriers.

About Partners Advantage:
Partners Advantage is an independent insurance marketing organization and nationally
recognized leader in the life insurance, annuity and linked benefit products marketplace.

Press Release originally published in PR Newswire: https://www.prnewswire.com/news-releases/two-insurance-marketing-powerhouses-announce-merger-300611567.html

For financial professional use only. Not for public distribution.

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The PILLAR System: An Exclusive Practice Management and Seminar System

The PILLAR (Partners In Life, Long-term care And Retirement) System is an exclusive practice management, and seminar system created by Partners Advantage and reflecting dozens of years’ experience and countless hours in the field with leading agents.

The PILLAR System packages content that Partners Advantage subject matter experts have tested and provided to Million Dollar Roundtable (MDRT) level financial professionals throughout the years. The system brings all the content together to help financial professionals, who work directly with Partners Advantage, generate more consultative sales. This complete sales, marketing, and seminar system uses a secure online training platform that comprises different educational modules, tools and resources to enhance your learning. These tools help you shift your mindset from products to solutions, from sales to service, and from scarcity to growth.

The content that will be taught is divided into 6 different categories. Each of the categories is a different “PILLAR.” 

Using a secure online training platform the company refers to as The PILLAR System Playbook, a 24/7 “Online University” that houses numerous tools and resources, helps individuals join the ranks of top insurance and financial professionals. Visit www.thepillarsystem.com to learn more.

The Partners Advantage Brokerage Team can be reached at 888-251-5525, Ext. 700 for more information.

For financial professional use only. Not to be used for consumer solicitation purposes.

*Production results gathered from January-June 2016. Not all financial professionals in attendance experienced the same results and there is no guarantee of future success. The information provided is for your own practice management purposes and education.

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.

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