We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the March and April 2017 editions. We're sharing pieces of the March introduction, the April introduction, and 2 of the 7 monthly sales ideas from April. If you like what you read, we encourage you to click here and become a subscriber.
Reprinted with the author's permission.
Note: We're including part of March's introduction, which focuses on why people buy life insurance - such a key point to remember when pitching any financial product or solution. After March's intro, we'll jump straight into April's, which explains how to adapt March's altruistic sales idea into a version that will resonate with people who require selfish reasons to inspire them to take action.
March, 2017 – 7 Ideas and Views Newsletter by Van Mueller
...IMPORTANT! People do not buy life insurance because of premiums or cash values. They buy life insurance because they understand the amazing benefits that are provided to themselves, their families, their businesses, their charities, etc.
A great salesperson provides a compelling reason to buy life insurance, not a compelling product. We all sell wonderful products. Very few of us provide compelling reasons to own life insurance.
That is all it takes to succeed in our business. We must provide prospects and clients with compelling reasons to take action. The product does not matter. We all sell fantastic products.
We must provide prospects and clients with compelling reasons to take action. The product does not matter. We all sell fantastic products.
Look for ways to inspire prospects and clients to take action. February and the start of this month’s newsletter are compelling reasons to take action. Here is another one.
You need some preliminary information to present this idea. First, Google “Milliman Medical Index.” What will appear will be quite a number of sites that you can access for determining the average healthcare costs for a family of four in 2016 and in 2015. The information will show you that these costs have tripled since 2001 when Milliman started providing this information.
Milliman is an actuarial firm. There are no politics involved. They are about the math. They provide foundational information about how the results are calculated.
The current results are these: The average cost of healthcare for a family of four in our country is now $25,826 annually.
It has tripled since they began providing this information in 2001. Here is the next question you must ask every grandma and grandpa in America: If it triples again won’t that cost be $78,000 per year by 2031? Won’t that make it almost impossible for most people in our country to have access to quality health care?
Why do we need to provide this information? Don’t most grandmas and grandpas believe that their children and grandchildren are spendthrifts? Doesn’t that make them hesitant in many cases to give any money to their children and grandchildren? We must provide a solid, unimpeachable reason for them to take action.
We must provide a solid, unimpeachable reason for them to take action.
Ask them to pretend that they are up in heaven. They can see that their granddaughter is very sick. If their granddaughter has access to quality healthcare she gets well. If she doesn’t, her illness becomes chronic or she dies. Ask them this question. If I could show you a way to stay in complete control of your money until you take your last breath, but instead of giving that money to the government, a nursing home, or a hospital you could keep that money in your family, wouldn’t you at the very least want to know about it?
All we would ask you to do is reposition some assets so that they would achieve similar or better returns while you are alive. You would still have access to the money while you are alive and we could make it look like a lot more income tax free money after you die! Why would anyone let their money linger in a money market, savings account or certificate of deposit if they could earn the same or better returns, have almost complete access to the money while they are alive and could provide the where-with-all to their children and grandchildren to access quality healthcare and many other benefits because grandma and grandpa used the miracle of leverage to provide that money.
It is such an easy sale. It is actually very easy to underwrite because in many cases you are providing half the death benefit or more to the insurance company.
Many grandmas and grandpas have $50,000 or $100,000 or even more sitting in savings accounts, money markets, or CDs and they earn very little. Many earn as little as $100 per year on $100,000. They are okay with that because they want the money to be safe.
Many grandmas and grandpas have $50,000 or $100,000 or even more sitting in savings accounts, money markets, or CDs and they earn very little.
We all sell single premium life insurance policies that will earn the same $100 per year over a 5, 7 or 10 year period of time. The difference is my single premium life insurance policy that pays $100 per year returns on that same $100,000 will pay $160,000 to $220,000 or more in a death benefit income tax free to the heirs when my client dies.
Very few Americans are aware that life insurance can do this for them. They are literally blown away that they can provide these additional benefits for their families without sacrificing safety, access to the money and returns on that money.
This is such a simple way to make $100,000 look like $200,000 or $500,000 look like $1,000,000 or $1,000,000 look like $2,000,000. That very simple understanding of how leverage works allows grandma and grandpa to watch over their family’s economic well being without sacrificing any of their control.
Remember, the purpose of this information is to inspire every grandma and grandpa in America to take action. They can do so without essentially any sacrifice to their own financial well being.
We must ask every grandma and grandpa in America about this information.
Next month I will show you a more selfish way to explain the same information that will enhance this presentation even more.
April, 2017 – 7 Ideas and Views Newsletter by Van Mueller
Over the last few months I have started these newsletters with much more in depth explanations of some very important sales ideas. I will continue to do that for the foreseeable future.
Last month we finished our discussion using the progressive nature of the tax code to explain to clients how they could pay their income taxes now at lower rates that they controlled versus higher rates in the future that they would have less control of.
The math is easy to explain and our prospects and clients love the idea of being in control of their income tax liability. We also discussed repositioning money from savings accounts, CD’s, money market accounts and even short term bond funds of all kinds into single premium or annual premium life insurance.
There has never been a more perfect time for using these products to benefit our prospects and clients.
These ideas require grandma and grandpa to preserve their life’s work for their families rather than giving their money to governments, nursing homes or hospitals. This applies to most of the people we make presentations to.
However, there are some of our clients that require selfish reasons to inspire them to take action.
Here are a couple of those selfish reasons I promised you in last month’s newsletter.
When I am talking to prospects or clients who are more inclined to worry about themselves first, I use a different point of reference. Here are the questions I ask, in the order I ask them.
When I am talking to prospects or clients who are more inclined to worry about themselves first, I use a different point of reference.
Here’s how I start: I ask them to tell me exactly, the day they are going to die. They always say, “I don’t know.” I then ask, wouldn’t the easiest way and safest way to make sure your money lasts as long as you do, be reducing or even eliminating the future taxation of that money? Isn’t that even less risky than trying to increase the returns on that money? Why wouldn’t you take advantage of current tax laws while you are able to? Additionally, what if we reallocated the removed funds with reduced or no taxation into a cash value life insurance policy? Wouldn’t the leveraged death benefit reimburse the family for any income tax that was paid? Wouldn’t that reimbursement be income tax free?
Wouldn’t there be an additional benefit? Wouldn’t the death benefit free up principal to be spent by grandma and grandpa for themselves with the death benefit replenishing that use of principle with the death benefit?
Life insurance allows everyone to use their cash values to the fullest extent because the leveraged death benefit replaces the used principle.
Another selfish reason for our clients to take action is the understanding that more and more Americans will become caregivers in the future. With increased Medicaid reductions and more and more people getting older where will the money come from to care for all these grandmas and grandpas? Remember, the bulk of the Baby Boomers retire between 2022 and 2029.
Ask them if they could reposition assets so that they would also provide long term care benefits as well as a safe return on their investment and that they would retain substantial access to that money, would they do it? You will be surprised how many times they will say yes.
People do not always have altruistic reasons for doing things. Sometimes they have selfish reasons. You must be versatile enough as an advisor to first identify your prospects reason for taking action and then adjust your presentation so that it appeals to their concerns; not what you think their concerns should be.
Essentially, this means that this over 65 couple could make $23,200 of fully taxable income over and above their Social Security and pay little or no income tax.
Just knowing this information will greatly increase your success rate for helping MORE of the people you present to.
Here are a few more ideas I think will help you open more cases.
Ask prospects and clients how much money they need to have a comfortable retirement. Essentially, that is a trick question. Aren’t we learning that a guaranteed income that you can’t outlive in retirement is actually more important in most cases, than how much wealth you accumulate? Shouldn’t we ask them how much “income” they need to have a great retirement?
Almost every time won’t they say that they don’t know?
Here is a little presentation that will get your prospect or client to consider taking action immediately. I ask them if they could build a retirement income equal to their take home pay would that be a good starting point. If they had the income they live on now and didn’t have to work would that help them determine if they could consider retirement? I than ask them if they would like to do the math. They always believe that would be interesting and worth the effort.
I ask, shouldn’t we approximate what your Social Security will pay as a retirement income? Let’s go to www.ssa.gov and get YOUR current Social Security statement. I show them how to set up an account and what to check for when they go to their account. I ask them to make sure Social Security is recording their income correctly. I ask them to verify what their full retirement age is and finally what their benefit is at age 62, at the full retirement age and age 70.
The average American receives around $1,300 per month from Social Security or around $15,600 per year. So a husband and wife would receive around $31,200 per year in income.
The average American receives around $1,300 per month from Social Security or around $15,600 per year.
I then ask them to go and get their last three years of income tax returns. I then show them how they can make a close estimation of the amount they are living on now. We start by looking at their tax returns. We write down how much they paid in federal income tax and we write down how much they paid in state and/or local income tax. We do not take that information off their W-2’s or 1099’s because the number is always different on the tax return. The tax return will have higher or lower results depending on their circumstance.
Then we look at their W-2. From their W-2 we are able to find this important information. How much Social Security tax they paid and how much Medicare tax they paid. Then in box 12B on the W-2 we can see how much they contribute to their 401K’s.
In most cases you will find that Americans’ take home pay is 60 to 70 percent of their gross income. Here is a list for your use.
Gross Income. Minus
- Federal Income Tax
- State Income Tax
- Social Security Tax
- Medicare Tax
- 401K Contributions
- HSA Contributions
As an example, a couple making $80,000 per year gross will probably be taking home $48,000 to $56,000. If they can already count on $31,000 per year from Social Security and they have $200,000 in 401K which could provide another $8,000 per year without touching the principle. Now they have $39,000 of the $48,000 to $56,000 they are currently living on.
Having a successful retirement no longer seems farfetched. They are even encouraged because they now see that they are closer to retirement success than they realized. It is a positive reinforcement to our prospects and clients that they only have to do a little bit more rather than a LOT more to have the successful retirement they have always dreamed of.
We assume they know this information. To be candid, I have never found anyone who has not been impressed and heartened by this process. I can honestly say that I have made a sale almost every time I have taken someone through this process. They feel encouraged and have a sense of accomplishment that they are closer than they realize. It inspires them to take action.
Here is another good idea.
I will show you the way I’ve showed people and then I will show you an amazing way I learned from another agent.
This idea tries to give prospects and a clients who are in their 40’s and 50’s what retirement will really cost.
This idea tries to give prospects and a clients who are in their 40’s and 50’s what retirement will really cost.
I used to ask these prospects this question: “What if you had to eat at McDonalds for breakfast, lunch and dinner every day for your entire retirement?” I printed out a menu and I covered it with plastic and I would literally ask every person what they would eat for breakfast, lunch and dinner and then I would price it out. We would assume they would live for 20 years. For many couples it is reaching 25 or even 30 years. Don’t get carried away. 20 years paints the picture you are trying to have your prospects and clients see.
My way was an involved process. It took a while. It always arrived at a different number because everyone’s menu choices were different. I’ll admit it helped my clients understand a major cost they would face in retirement, but it took a longer than necessary.
I watched a very successful agent named Irene Bailey share this idea at a meeting I attended. It provided the same information in a much shorter time and was still interesting and believable to prospects and clients.
I am proud to say I stole her idea. I didn’t really; she shared it with all of us. Again, that is one of the great wonders of our business. Most of the great agents share their best ideas with the industry. I am so very proud to be part of an industry that is willing to share its best ideas with each other.
Anyway, here’s her idea; see what you think. She uses a formula – Here it is.
2 people x 3 meals per day x $10.00 per meal x 30 days x 12 months x 20 years.
That number comes out to $432,000 or divided by 20 years $21,600 per year just to eat.
Shouldn’t your next questions be, “where will you get the money for clothing and shelter and healthcare? Will you ever get to do anything fun when you retire if you barely have enough money to eat?”
Both of these ideas come at prospects and clients from different angles. The first one shows them that they are closer than they thought to retirement success. The second one shows them that they will need a sizeable amount of money just to be able to eat. Both will inspire our prospects and clients to take action.
Next month I will share another idea like this and I will spend some time talking about economics. We have to stay apprised of what is about to happen in order to best serve our prospects and clients.
We're passing on two of the newsletter's monthly sales ideas - every issue of the newsletter contains 7 ideas. Subscribe to get them all.
Idea #1: The Pension Crisis Could Cause the Next Crash
I wrote about this in one of the ideas I provided last month. I am writing about this again because I think it could be the unforeseen issue that could cause the next economic disaster. More and more evidence is being uncovered about state pensions, city pensions, county pensions, municipality pensions, school pensions, public worker pensions, etc. and all of it is bad.
More and more evidence is being uncovered about state pensions, city pensions, county pensions, municipality pensions, school pensions, public worker pensions, etc. and all of it is bad.
These pensions are all so dramatically underfunded that many people will not only receive lower pensions, there is even a chance that many will receive NONE of the pension money they have been promised. Unfunded liabilities for pensions have risen from $292 billion in 2007 to $1.9 trillion today. However, even that number is a lie. Most pensions would fold if they used less optimistic assumed rates of return. If they used more realistic rates of return the unfunded liabilities for American pensions below the Federal level and not including Social Security would be around $6 trillion dollars.
Where do these entities get this shortfall of money? Isn’t it true they can’t print money? Won’t they have to raise taxes or lower benefits or do a combination of both? What impact does the realization of this have on our economy?
This is coming: Government is preparing for this nightmare. In 2014 the government passed a law allowing pension funds to cut benefits to their recipients.
Kansas, South Carolina, New York, Illinois and California are already seeing reductions in their pension payouts to recipients.
One member who paid into the New York Teamsters Road Carriers Local 707 Pension Fund for 30 years started his retirement with a check of $3,500.00 monthly. That check is now $1,170.00 monthly.
There are 400,000 members of the Central States Pension Fund. That fund is about to go bankrupt.
The Pension Benefit Guaranty Corporation has only $2 billion in assets to cover $60 billion of current liabilities. It is only 3 percent funded.
The website “Truth in Accounting” reports all of these entities actually use two sets of books. One set for the public and the other is the truth.
Many municipalities will decide whether to fund schools or public safety or pensions: All will suffer.
This is a big deal. You must ask every client what they think will happen to their retirement if their promised pension benefits were reduced or even eliminated? It must be brought to their attention so that it can be planned for.
Don’t you see? This now increases the value of annuities dramatically. We are the only people who can provide guaranteed income that cannot be outlived that is actuarially sound. When the American people finally realize what is happening and what you can do for them it will be the start of the greatest period ever to your career.
This will only happen if you ask people if they understand what is going on. Ask, and ask again. You will see magnificent results.
I am going to give you extra articles about this information. You must become knowledgeable about this information as quickly as possible.
Title: Opinion: Collapsing pensions will fuel America’s next financial crisis
www.marketwatch.com (Market Watch, March 17, 2017)
Title: PBGC grids for pending union plan catastrophe
www.pionline.com (Pension & Investments, March 20, 2017)
Title: How To Protect Yourself From The Looming Pension Crisis
www.forbes.com (Forbes, March 19, 2017)
Title: Comptroller says state’s net deficit up to $126.7 billion
www.theindependentnewspapers.com (The Independent Newspapers, March 14, 2017)
Title: Even San Francisco, Flush With Tech Wealth, Has Pension Problems
www.bloomberg.com (Bloomberg, March 20, 2017)
Title: California schools may face cuts amid skyrocketing pension costs
www.sfchronicle.com (San Francisco Chronicle, January 23, 2017)
Idea #2: Healthcare Is the Destruction of all the Economies on Planet Earth
The fourth largest economy on planet Earth is what our country spends on healthcare annually. We spend more on healthcare than the entire GDP of Germany which is the largest economy of the European Union. 17 percent of our economy of $18.6 trillion is spent on healthcare. The average cost of healthcare for a family of four in America is currently $25,826 annually according to Milliman Medical Index.
According to a study done by the Institute of Medicine in 2012, $750 billion of the $3.2 trillion we spend annually on healthcare is waste and fraud. That is precisely why healthcare will never be fixed. What is the incentive of the people receiving the $750 billion to ever fix anything? In fact, I would argue that they are even paying people not to fix anything.
Think about this: A Republican President with a majority in the House and Senate could not affect health care reform.
Why am I telling you all of this? Several reasons. First, everyone we work with must plan for higher healthcare costs. Second, every grandma and grandpa in America will want to help their families meet these costs. This information helps to inspire them to take action whey they might not otherwise. This provides a good reason to take action rather than their children and grandchildren purchasing a car or a television with the inherited money. Our clients buy when they discover good reasons, not because we have good products. Please sell the reasons, not the products.
Title: Why our health care costs so much – and why fixes aren’t likely
www.sandiegouniontribune.com (San Diego Union Tribune, March 18, 2017)
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