Designing Our Future

Table of Contents

Chapter 1: The Future is Nearer than You Think	5
Knowledgeable Agents	5
Acquiring Assets	6
Estate Planning	7
Wasted Dollars	9
Wishing our Way Into Retirement	10
Goal Setting	11
Accurate Information Required	13
Wealth Distribution	15
Estate Control	15
All Estates Need a Will	18
Determining an Asset’s Value	22
Income Capitalization	24
Reproduction-Cost-Minus-Depreciation	24
Comparative Sales	24
Determining the Dollar Amount	24
Chapter 2: Will You Outlive Your Assets?	27
Buying Power	27
The Federal Reserve	28
Permanent and Variable Portfolios	30
Chapter 3: Using Financial Tools	36
The First Step: Record Keeping	37
Establishing a Budget	38
What Records and Where?	39
Wills	44
Chapter 4: Trusts	47
Defining a Trust	48
Irrevocable and Revocable Trusts	50
Irrevocable Trusts	50
Revocable Trusts	52
Present Interest Trusts	57
Crummey Trusts	58
Totten Trusts	59
Life Insurance Trusts	59
Grantor Retained Annuity Trusts (GRAT)	61
Money Management Tool	62
Probate Considerations	62
Trust Language	70
Trust Creator & Trust Types	71
Trust Distribution for Minors	72
Selecting Trustees	73
Probate Protection	74
Proper Trust Use	74
Not Everyone Needs A trust	76
Taxation	87
Estate Taxes & Inheritance Taxes	88
Bankruptcy Protection	89
Medicaid Qualification	89
Avoiding Probate Proceedings	90
Estate Privacy	90
Generation Skipping	91
Asset Management, Conservation, and Distribution	92
In Conclusion	95
Chapter 5: Life Insurance	96
How Much is Enough?	97
The Life Insurance Trust	102
Term or Cash Value?	103
Term Insurance	104
Cash Value Insurance	106
Whole Life Policies	107
Universal Life Policies	109
Variable Life Policies	109
Endowment Life Policies	110
Survivorship Life Policies	111
Single Premium Whole Life Policies	111
Policy Options	112
Nonforfeiture Options & Disability Waivers	113
Cash Values	114
Insuring the Life of a Child	114
The Agent’s Role	115
Chapter 6: Annuities	117
Retirement Risks	117
A Payment of Money	118
Annuity History	120
Do Annuities Make Sense?	124
Commission Surrender Periods	126
An Estate and Retirement Planning Tool	127
Annuity Facts	128
Tax Deferred Status	130
Time is Money	131
Periodic Withdrawals	132
Annuitization Options	134
Annuity Models	137
Accumulation Deferred Annuities	137
Single Pay Immediate Annuities	137
Variable Annuities	137
Investment and Insurance Component	138
The Variable Annuity’s Introduction	140
Wrap-Around Annuities	140
CD-Like Annuities	141
Retirement Advantages	141
Estate Advantages	142
Competition	146
Investment Expenses and Loads	150
Similarities	153
Chapter 7: Retirement Funding	157
Pension Plan Players	158
How Much Money Will You Need?	162
Inflation	165
Company Sponsored Pension Plans	167
Defined Benefit Plans	169
Defined Contribution Plans	172
401(k) Plans	175
Collecting Pension Funds	176
At Retirement	183
Chapter 8: Other Financial Options	188
Individual Retirement Accounts (IRA)	188
Keogh Plans	189
Simplified Employees Pension Plan	190
Incorporation	191
S-Corporations	196
Estate Planning Tools	197
When Death Occurs	200
Chapter 9: Ethics and Other Myths	209
Industry Knowledge	212
Due Diligence	216
Competency	216
Understanding the Products	217
Catastrophic Loss on a Large Scale	219
Insurer Rating Companies	221
Business Profile	223
Financial Profile	223
Operating Environment	224
Market Brand & Position	225
Lines in Business as a Risk Factor	226
Insurer Assets	226
Gross Underwriting Leverage	228
Financial Flexibility	229
Corporate Governance	231
Special Rating Situations	231
Insurers & Climate Change	232
Continuing Education Requirements	235
Agents Personal Responsibility	236
Professional Representation	239
Appointments	239
Getting in the Door	241
Making the Sale (Or Not)	243
Product Over Commission	244
Organization	245
Full Disclosure	246
Product Replacement	246
Policy Application	247
Product Delivery	248
Yearly Reviews	249
Revisiting The Sale	250
Does the Product Still Meet Their Goals	250
Errors & Omissions Insurance	251
Agent Liability Risk	251
Giving Our Clients What Is Due Them	255
Criteria	257
Claims-Made Policies & Occurrence Policies	258
Unfair Trade Practices Act	261
Legislative History	261
Insurance Activities Other than Sales	265
Financial Activities Other than Insurance	266
Nondiscrimination	267
Limitation & Developing Legislations	267
Legislation	268
Key Points	270
Is it Still Relevant?	272
Redlining & Blacklists	275
Reverse Redlining	276
Section 5. Favored Agent or Insurer, Coercion of Debtor	277
Section 7. Defined and Undefined Practices	278
Section 8. Cease and Desist and Penalty Orders	279
Section 9. Judicial Review of Order	280
Section 11. Penalty for Violation of Cease-and-Desist	280
Section 12. Regulations	280
Defining Unfair Trade Practices	281
Section 4: G. Unfair Discrimination	283
Rebates	287
Marketing & Performance Records	288
Failure to Maintain Complaint Procedures	288
Misrepresentation on Insurance Applications	289
Unfair Financial Planning Practices	289
Failure to File or Certify LTC Sales	291
Failure to Provide Claims History	291
Favored Agent or Insurer	292

United Insurance Educators, Inc.

8213 – 352^nd Street East

Eatonville, Washington 98328-8638

(253) 846-1155