- Hey everybody,
it's Randy Pearson vice-president of Life & Annuities
for Gordon Marketing.
And today with me, I've got Ray Parmon,
our regional vice president for Life & Annuities.
And you know, if you're interested in getting
into the business owner market,
IUL, Index Universal Life is a product that you wanna
bring up in almost every conversation.
You wanna learn why, stay tuned.
(dramatic music)
All right, Ray.
So Indexed Universal Life, we've done a lot of selling
Life & Annuities episodes, where we've talked about
Indexed Universal Life.
But most often in a kitchen table,
everyday consumer type sector.
Why should an advisor whose watching this video bring up
index UL, when having a conversation
with a business owner?
- Yeah, great question there.
And, index UL, it is applicable to those
family type sales.
And we do a lot of conversations around that.
And you know, there's a lot of features and benefits that
are kind of transfer or transcended from a private family
to a business owner setting.
Of course, with an index UL, we all know you have that
advantage of tax differ growth on the cash value.
You have the tax-free retirement story,
to have a retirement income supplement,
that sleeve of tax-free retirement dollars there.
And also, that tax-free death benefit.
Let's not forget there too.
The other two items that the business owner can benefit
from too, is utilizing that tax-free funds,
the cash value that grows up within an index UL to help fund
business purchases for capital equipment,
various other items that they may need to procure
within their business at a very low interest rate
and it's abundantly very expeditiously successful,
that's what I'm trying to say there.
- So, the logistics with regards to a business owner
accessing the funds from a business owned
life insurance policy,
are they different?
Are they more complex?
Are there any special nuances that an advisor
should be aware of when they're suggesting that
to their business owner client?
- Sure, well, first off, if it is a business owned
life insurance policy, that cash value is actually gonna be
yet another asset on their balance sheet.
So that's gonna look really good as far as their finances
are concerned and it will actually help with their
credit worthiness as well for conducting business.
But, really it's not overly complicated.
It's just simply reaching out to the home office
and requesting a distribution,
whether it be by loan or another way.
But, most times it is through loans,
and they're able to do that in short order,
and usually that money is sent out the next day
within 24 hours.
- And just like for an everyday consumer,
I'm right in saying that those monies are received by
the business to be utilized, as you said,
for almost any purpose, any valid business purpose
they could come up with on a tax-free basis, right?
- Yes, absolutely.
- Very good, fantastic.
Now, so, when we talk about business owner insurance,
business uses of life insurance, we talk a lot about,
you know, in utilizing IUL, I'm assuming most of the time
we're probably talking about key executive benefits,
things like that.
That can be utilized index UL, and buy-sell settings,
or rather death benefit oriented type scenarios?
- Yeah, yeah, you sure can.
And you're absolutely right.
We use that a lot in executive bonus and non-qualified
deferred comp because we're really trying to attract,
retain and reward key talent that we might have.
But yeah, if this is more of a death benefit oriented play,
it can still be utilized because, for instance,
in a buy-sell agreement say we do index UL instead of term,
or maybe a little bit of index UL,
and a little bit of term insurance.
That cash value that it grows up within those policies
in the index UL, save business owner who wants to go to
retire.
Well, the other business owners could use their cash value
to help buy that a partner out.
- Yeah, has some liquidity for most of that future.
- Yes.
- Not to mention by the way,
the simple fact of the matter is that if they own that
life insurance for say 15 or 20 or 25 years,
the actual net cost of the insurance, right?
- Yeah.
- Could certainly be less than if they spent that money
on term insurance.
- Yeah, and that's a great comment.
And you know the other thing too,
even with some folks that are maybe getting up in years,
still need to fund a buy-sell agreement,
maybe their term ran out.
If they're able to afford it, we can do an index UL
with an enhanced cash liquidity brighter on there.
And so, yeah, maybe they pay a little bit extra in premium,
but 3, 4, 5 years down the road, when they go to retire,
they can surrender that policy,
and centrally hit almost all of their premiums back.
- Yeah, absolutely.
So, we spend a lot of time chatting about living benefits
inside of a life insurance contract,
things like chronic illness, critical illness,
are those features and benefits, those living benefits
available to a business owner as well?
- Yeah, yeah, absolutely.
Those can be added on there.
And that's why this is kind of a self-completing kind of
a product/strategy where you have the death benefit,
you have the cash value, but you also have those
living benefits if you get sick along the way too.
- Yeah, and once again, no tax disadvantage to the business
over in exercising some of the benefits, correct?
- Correct, yeah.
- Because it's just considered an advance on
the payable death bed.
- That is correct.
- All right, so we're running out of time for this episode,
but I just wanna touch base really quickly,
on some of the resources that we have available to advisors,
to agents, to enhance their position in the small business
marketplace, right?
- Yeah.
- So I know that we've got a partnership
with a special carrier or two that specializes
in that space.
You wanna expound on that briefly?
- Yes, yeah, just real quick.
We have some really nice resources to either help you
get a foot in the door with a business owner, client,
or enhance a relationship that you might already have
with business or a client that it includes
a complimentary business valuations,
complimentary buy-sell agreement reviews,
just things that kind of get the conversation started.
We have a bunch of marketing collateral,
as well as what I'd like to use as a business owner priority
checklist, that can help a business or a client really
get to thinking, hey, what's important to me,
and where should I start?
So, a lot of great things, give us a call.
- Yeah, and absolutely, and I'll finish with this.
Not only those tools to help guide the agent,
the advisor through that sales process
with a business owner, but your expertise, your mentorship,
your coaching in 20 year veteran in the life insurance
business, certainly I stand ready to assist agents
in expanding their market with business owners.
We've got Brady Doppler, we've got Craig Murray.
We got a lot of expertise to assist agents in getting into
that larger premium, more advanced design,
business owner space.
So, if you're an advisor out there,
and that sounds appealing to you,
I'd encourage you to reach out to us here at
Gordon Marketing can ask specifically to chat
with Ray Parmon.
And I'm sure you can enhance your practice to a degree
that you never thought possible.
So, with that, we're gonna call this episode of selling
Life & Annuities to an end.
I've asked you to do me a favor.
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But with that, happy selling.
(upbeat music)