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September 2023 – 7 Ideas and Views Newsletter by Van Mueller
This is such a spectacular, amazing and important time to be an insurance and financial professional. Because of everything that is currently happening in our country and our world, cash value life insurance should now be considered the most important and vital planning tool that we have to help the American people achieve their financial and retirement goals.
Please don’t ever limit the capabilities of cash value life insurance ever again and allow our customers and our competition to discuss cash value life insurance as if it is an investment. Shouldn’t we all begin to realize that calling cash value life insurance an investment is actually demeaning to all the benefits it can provide? Please remember, Americans have less and less discretionary money to accomplish more and more financial, protection and retirement responsibilities. The cost of these responsibilities is increasing dramatically while the purchasing power of money is decreasing. At the same time, Americans’ earning power is essentially staying stagnant. Those conditions make cash value life insurance the perfect product for the times we are currently in and the varied challenges we will face in the future.
Shouldn’t we all begin to realize that calling cash value life insurance an investment is actually demeaning to all the benefits it can provide?
An effective way to explain cash value life insurance is using pennies to buy dollars. For three or four or five cents per year you can buy a dollar that will be payable at your death, to your beneficiaries, income tax free. Or you can pay one single thirty or forty or fifty cents in one single premium to buy that same dollar at your death. Why is that important? Doesn’t it allow our customers to use their money while they are still alive to offset increased expenses and unseen challenges and surprise opportunities and then when they die the death benefit replenishes and reimburses the family, business, or charity all the money and sometimes additional money that was used during our customer’s life? All of this is accomplished income tax free. Don’t you see how amazing that is? Cash value life insurance allows our customers to offset inflation or deflation and losses while alive, using their principal or cash value to do it. The leveraged death benefit replenishes the money used during life for the family or business. The flexibility and versatility of cash value life insurance is ridiculously amazing and appropriate for the economic times we find ourselves in.
Additionally, cash value life insurance is also one dollar that can handle the responsibilities and do the work that many dollars would require. A cash value life insurance dollar will take care of your family, business, or charity if you die too soon. Cash value life insurance will take care of the owner of the policy if they live too long. Cash value life insurance has the ability to provide a guaranteed lifetime income that is income tax free. When waiver of premium is included in the cash value life insurance policy, the policy will self-complete without the customer having to contribute any additional premiums if they become totally disabled. Cash value life insurance can provide living benefits while you are alive if you have a critical illness such as a heart attack, stroke, or cancer. Cash value life insurance policies provide terminally ill customers the ability to withdraw most of their death benefit before they die so they can assist the people they love or the business they built, develop a plan to use the money to replace the enormous value they won’t be able to deliver when they are gone.
I believe, and I cannot emphasize this enough, that the most important benefit provided by cash value life insurance in the future will be money for long term care and assisted living. With 140 million Americans turning age 65 by 2045, it will be nearly impossible to provide all the money that will be necessary to care for all the Americans who will require care over the next 50 years. Cash value life insurance will provide those benefits without wasting any of the money in premiums being paid for benefits that might not be used. Cash value life insurance is an effective and efficient way to address this enormous challenge that Americans will face going forward. A cash value life insurance policy also provides the opportunity to take advantage of investment opportunities without losing money and without sacrificing coverage because you retain access to the cash value to be used at your discretion.
I believe, and I cannot emphasize this enough, that the most important benefit provided by cash value life insurance in the future will be money for long term care and assisted living.
I ask every prospect and client if they can think of any other strategy that can accomplish all of these responsibilities and opportunities using the same dollars. Many times, our customers can’t believe what you are sharing with them because they have been taught that the only way to collect on life insurance is to die. I even ask them if they would like me to review all the opportunities and benefits again. Don’t be afraid to do that. The mother of all learning is repetition.
Please, also note that I have never once called cash value life insurance, permanent insurance. In a dramatically fast paced world, the word “permanent” is terrifying to our prospects and clients. Please, also do not use terms like whole life or universal life or indexed universal life or variable life. “Cash value life insurance” is much more understandable to the public. It does not sound as foreboding as permanent insurance. The term “cash value” provides all the flexibility and opportunity that a cash value life insurance policy can provide. Shouldn’t words that clearly explain the product be an important part of the description?
Here's another reason this is the greatest time ever to be an agent and sell cash value life insurance. We have so many issues we can ask prospects and clients about. That is what separates us from accountants and attorneys and bankers and trust officers. We can ask questions whereas other financial professionals mostly answer questions. What if our prospects and clients don’t even know what questions to ask? We are able to open many discussions that wouldn’t even be given consideration to because we can ask powerful and amazing questions about a multitude of issues. THAT IS YOUR COMPETITIVE ADVANTAGE. Ask questions as extensively as possible.
We can ask questions whereas other financial professionals mostly answer questions. That is your competitive advantage.
In spite of what I just shared with you, many agents and advisors come to me regularly to explain that they don’t know what to talk about with prospects and clients. First, and I am not trying to be clever here: I don’t want you to talk to your customers about anything. Wouldn’t it be more beneficial to ask your prospects and clients their opinions about EVERYTHING? Later, in the newsletter I will share a list of things you can ask your prospects and clients about that will inspire them to take action. Here is an important consideration. You do not need a lot of information to have a great conversation with your prospects and clients about issues that will affect them. They have their own opinions about those issues. You must ask questions that will inspire our prospects and clients to share their opinion about all these issues. You will find that concerning many of these issues that they have not thought about or considered them even once until you asked a question about the issue. Many of the questions you ask them will not even be on their radar: That is why you are so valuable. You put issues on their radar that they must give consideration to while there is still time for our customers to control the outcome. It also conveys, without you telling them, what an amazing professional you are because you are asking them about issues that no one else is asking them about.
Agents worry all the time that they need to know a lot of information about all sorts of issues, when the truth is that all they really need to know are ten or fifteen amazing questions. Our prospects and clients will supply all the opinions. If you take good notes and complete a thorough fact finder you can return to your agency or company, and they will use the information and opinions that you collected to develop solutions with you that you can share with your prospect or client. THIS IS THE FASTEST WAY TO LEARN HOW TO BE A SUCCESSFUL INSURANCE AND FINANCIAL PROFESSIONAL.
All you really need to know are ten or fifteen amazing questions. Our prospects and clients will supply all the opinions.
May I use myself as an example about having a conversation I know nothing about? I live in Wisconsin. Nearly everyone hunts in Wisconsin, especially deer hunting. I can’t even imagine going hunting as I have no interest at all. How can I have a conversation with all the people who hunt in my state without coming across as fake or over representing my understanding of hunting? It is actually very easy. First, shouldn’t it be obvious that you should never lie? So, I am upfront with my customer. I don’t hunt. I have never hunted and will probably never hunt, but I am really curious. May I ask you a few questions about hunting? They always say yes. They are excited to share their opinions. May I ask all of you this question? Who do customers like to talk about more than anyone else? Themselves of course. Then, I would proceed to ask them questions that I could understand. Here are a few examples.
I ask them if it is still fun to hunt if they don’t shoot anything? Why is it still fun? Is it more fun to hunt by themselves or with other people? Do they eat what they are hunting, or do they give it away to friends, charity, or food banks? Do they hunt for food, or do they hunt for the sport of it or both? I could ask one hundred questions about something I have never done and the person I was talking with would enjoy the conversation? It is the same with our business. There are common sense discussions about issues like, how do you make sure you have enough money in retirement? What date did you specifically decide to make the Internal Revenue Service the primary beneficiary of your IRA, 401K, 403B or 457 plan? Are you working to benefit the Internal Revenue Service, or your family? Is it really okay to lose money every time an economic downturn happens, or would you be better off and further ahead if you never lost money ever again? I trust that you are getting the idea I am proposing. Essentially, aren’t you trying to have a great conversation with prospects and clients about subjects and issues that they are not thinking about or giving consideration to? Isn’t our ultimate responsibility to inspire our prospects and clients to think about those issues? Isn’t it true that telling them to think about these issues will probably not work? Wouldn’t asking our customers to consider issues and subjects that know they should consider make you vitally important and valuable as an insurance and financial professional?
There are so many issues and so many discussions that will ultimately lead to an analysis and discussion of our customers’ protection benefits, financial success and finally their retirement success. I hope this will give you some foundation for amazing discussions with prospects and clients.
There are so many issues and so many discussions that will ultimately lead to an analysis and discussion of our customers’ protection benefits, financial success and finally their retirement success.
Idea number one will have articles you can use to ask questions about why the world’s second biggest economy is in trouble and why that could not only have an impact on our economy but the world’s economy as well.
It is forecast that China will be the largest economy on Earth in a decade or so, however, currently they are experiencing real growing pains because of the way they run their world and economy and also how they handled COVID-19 in their country. They literally shut down their country’s economy. Now they face a declining birth rate which means there are not enough young people to support the 545 million Baby Boomers in China. They are also dealing with deflation and their housing market which is currently 60 percent of their economy is falling apart. If you “Google” China’s ghost cities, you will discover that China was building a brand new one-million-person city every month with no people living in them.
The United States, the largest economy on Earth has a GDP of $25.5 trillion. China is second at $18 trillion. The European Union is third at $17.5 trillion and Japan is fourth at $4.9 trillion. All four economies are facing serious economic challenges. Ask your customers what they think will happen when all of these economies struggle even worse than they are now.
Insurance and financial professionals must remember that in study after study, Americans declared that they are much more concerned with losing than they are ever at missing out on gain. Please remember to sell to your competitive advantage.
Insurance and financial professionals must remember that in study after study, Americans declared that they are much more concerned with losing than they are ever at missing out on gain.
The European Union is a mess with high inflation, high unemployment, and little to no growth. They also have a serious war on their eastern border. How will our economy prosper if the rest of the world is struggling?
Additionally, Japan’s federal bank, the Bank of Japan, prints approximately 70 percent of their economy. Japan has the oldest population on Earth, and they do not have enough young people to support all the senior citizens that they have in their country. Their economy will struggle for a long time to come.
Finally, there are the BRICS nations, which China is a part of. BRICS stands for Brazil, Russia, India, China, and South America. As you can tell for yourself the BRICS nations are also struggling.
That brings us to the United States which is having to deal with many challenges of their own. We have enormous debt. In October of 2022 we were $31 trillion in debt. By June of 2023 we were $32 trillion in debt. As of August 25th of 2023 we are now $32.8 trillion in debt. The U.S. Debt clock predicts we will be $61 trillion in debt by 2031 and the Congressional Budget office predicts our country will be $144 trillion in debt by 2053. These predictions will probably be on the low side. First question: Where will we get the money? Second question: What benefits or services will not be offered because of all the interest on the debt? We have 140 million Americans turning 65 by 2045. We cannot handle the approximately 64 million we currently have on Social Security and Medicare, so where will get the money to fund these programs in the future? Isn’t it true we will have to print it? Can you spell I-N-F-L-A-T-I-O-N? Out of a $25 trillion economy we spend approximately 30 percent of that economy on health with declining results for the American people. Our growth is not increasing fast enough to keep up with the increasing fiscal responsibility for healthcare. Forty of the fifty states do not have enough money to pay their bills. 63 of the 75 largest cities in the United States do not have enough money to pay their bills and it’s getting worse. These cities and states have seriously underfunded retirement pensions and retiree healthcare plans. How will we pay these benefits if the cities and states don’t have the money?
Out of a $25 trillion economy we spend approximately 30 percent of that economy on health with declining results for the American people.
Isn’t it true that the cities and states will either have to increase taxes, lower benefits, borrow more money or a combination of all of these? Isn’t it true that probably none of that will be enough? The most likely outcome will see all those cities and states going to the federal government, hat in hand, to ask for a bailout. Raising taxes will not provide enough revenue. They will have to ask the only entity that can print money for assistance. Won’t that be the government and the Federal Reserve? Because the need will be so widespread our politicians will back each other to make sure their constituents receive their benefits. This will cause enormous unforeseen circumstances with the most unfortunate circumstances being the reduced purchasing power of American money: That is a stealth tax. So even though Americans will receive their Social Security and pensions, that money will buy substantially fewer goods and services year after year.
There are so many other issues that we can and must use to start conversations with our prospects and clients. Below is a list of a few of these issues. Using this list as an example we must use questions about these issues to discover the opinions of prospects and clients. Our opinions DO NOT matter. We must have conversations with our prospects and clients that clarify and identify the issues our customers are most concerned with. It doesn’t matter what we think they should be concerned with. Questions allow you to direct our customers to issues they may not know about or understand. They DISCOVER on their own rather than us telling them.
This is truly amazing, but it works over and over again. Asking questions is the key to enormous success.
Here is the list:
- Higher Taxes
- Lower Benefits
- Social Security
- Return of COVID-19
- Interest on the Debt
- War and Defense
- Health Care Reform
- Health Care Costs
- Natural Disasters
- Climate Change
- Fannie Mae, Freddie Mac, FHA
- State and City Budget Shortfalls
- Commercial Real Estate
- Corporate Debt
- Home Mortgages and Housing
- Student Loan Crisis
- Filial Laws
- Black Swan Events
- Immigration Costs
- Social Issues Costs
There are many more. I hope this gives you a taste of all the wonderful discussions and conversations you can have with prospects and clients that will enable them, on their own, to discover that the only one who they can really depend on is themselves. That is what makes America great and why it is such a fabulous time to be an insurance and financial professional. Let me repeat. This is the greatest time ever to sell cash value life insurance. Let’s get started with this month’s sales ideas.
Idea #1: We Must Become More Aware of China's Economy
China is the second biggest economy on planet Earth and many analysts believe in a decade or so that their economy will exceed ours in size. We must understand the impact that will have on stock and bond markets as well as interest rates and even the price of commodities such as oil, corn, wheat, and uranium. Many analysts are predicting that China will struggle for a while because of demographics, retraining the working population, lack of natural resources such as oil and water but their economy will eventually surpass ours.
I am providing a number of articles so that you can acquaint yourselves with a foundation of information that you can build upon. China will be the United States’ biggest competition in every aspect of global circumstance for the rest of our lives. We must be sure that we can discuss with our prospects and clients the implications of that competition.
Title: David Rosenberg: The Great China slowdown has wider implications than meet the eye
https://finance.yahoo.com/ (Yahoo Finance, August 21, 2023)
Title: China Slides to Brink of Deflation, Adding Stimulus Urgency
https://www.bloomberg.com/ (Bloomberg, July 10, 2023)
Title: China exports plummet to lowest point since start of COVID pandemic as US firms turn away from rival amid tensions
https://nypost.com/ (New York Post, August 8, 2023)
Title: China’s Stalling Economy Puts the World on Notice
https://www.nytimes/ (New York Times, August 11, 2023)
Title: China’s Economy Faces Yet Another Threat: Falling Prices
https://www.nytimes/ (New York Times, August 9, 2023)
Idea #5: Learn the Proper Methods for 1035 Exchanges
Here are a couple of articles I found beneficial even though I do transfers and 1035 exchanges all the time. With increased rates on annuities many agents are moving customers from existing annuities with lower rates to new annuities with higher rates. 1035 exchanges and trustee to trustee transfers are prevalent in today’s current market conditions. There are issues you must understand to be sure you are not accidentally causing a taxable event or an error in the transfer. Please incorporate these two articles into your knowledge bank.
Title: Rollovers, Transfers, 1035s: Don’t Assume You Already Know
https://brokerworldmag.com/ (Broker World, July 1, 2023)
Title: The Ins and Outs Of The ‘1035 Exchange’
https://www.fa-mag.com/ (Financial Advisor, August 4, 2023)
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