Author Archives: Laurie MaGuire

When imagining the future of their businesses, and possibly a future that involves different ownership at some point, owners may wonder if it’s really possible to consider “insiders” (employees, children, or co-owner) as viable successor owners. Insiders are often a great match for company culture, leadership style, and vision. But they may lack one very important element – money to buy the business. Is this a fatal flaw in planning for the transition of future ownership? Maybe, but maybe not.

First Things First

Before we dig deep into an insider’s ability to pay for ownership, it may be a good idea to take a step back and see whether that line of investigation is even worth pursuing. Start by laying out your goals and objectives for the future of the business in writing. You should be able to clearly define:

  • How much longer do you want to own your business?
  • What do you want your relationship with the business to be before, during, and after an ownership transition?
  • What do you want your business to look like after you no longer own it?
  • What must the business provide, on an after-tax basis, to complete your plan for financial security and independence?

Once you know the answers to these questions, you can start to evaluate possible outcomes for the future of your ownership interest by holding each scenario up against your goals to see how well they fit together.

Insiders Don’t Have Money

It is often the case that an insider, who would otherwise be an excellent successor owner, does not have enough money (or access to money) to support a purchase of the business. But this does not mean that a transfer of ownership to them should be off the table. The secret to success for an insider who is otherwise a strong owner candidate is cash flow. Cash flow can bring everything together.

The Definition of Cash Flow

What is “cash flow?” You’ve probably heard others say that your sale price might be a “multiple of cash flow”. Well, that all depends on the definition of “cash flow.” There are several definitions or measures of cash flow, each with a potentially significant and substantive difference. Typical measures of cash flow include:

  • EBIT: Earnings Before Interest and Taxes.
  • EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization.
  • True Cash Flow: The amount of pre-tax money directed to owners via salary (above the value of their services), bonuses, distributions or dividends, and rental payments in excess of fair market rates for equipment or buildings.

Each of these measures of cash flow can produce a different cash flow amount. Which one makes sense for you may depend on the unique nature of your business.

How Cash Flow Supports the Sale Price to Insiders

Shaila Drexl, owner and manager of three commercial buildings, desired to sell each of her three property management operations to each of the three on-site building managers. She thought she’d retain ownership of the buildings themselves and separated her building ownership from the management businesses. She had heard that “six times cash flow” was a fair way to value her type of business and this method matched nicely with her idea of what she needed to meet her financial objectives.

Let’s assume that Shaila’s employees want to buy her business. Let’s also assume that these employees share a trait common to many employees: They don’t have any money. Since Shaila’s employees don’t have money of their own, and they have limited borrowing potential, the payments they make must come from business operations. Every dollar of cash flow that is created through operations will be taxed at ordinary income tax rates, because it will either get reported as company income or it will be paid or passed through to the employee, who will then report it as income. Each employee will only have an after-tax amount left to pay Shaila, who will then most likely owe capital gains tax because she is being paid for her ownership interest. That’s two bites at the apple for the IRS before each dollar makes its way to Shaila’s savings account.  So, it may take some time for Shaila to reach her after-tax financial goals if her only plan is to sell ownership to employees, because company cash flow is eroding on its way to Shaila’s pocket. Is there a faster way to help Shaila reach her financial targets?

Shaila did the math and decided that it would take too long for each employee to pay for their part of the business if they just used cash flow to pay for Shaila’s ownership using a generous multiple of cash flow as the company value. She called a meeting of her most trusted advisors and began to look at planning strategies that might work better. Her advisors were able to identify a variety of potential improvements to her plan, including revisiting company value, adding different types of payments to Shaila, and transitioning ownership over time rather than all at once. Through analysis and creative thinking, they were able to come up with several ways to use company cash flow more efficiently, all the while keeping an eye on Shaila’s stated goals. In the end, Shaila was pleased with her more comprehensive plan.

The Bottom Line

A sale of ownership to insiders can be fraught with danger if the overall picture, from company performance to individual tax consequences, is not taken into account. Comprehensive planning can take time or may require several perspectives, but the benefits can outweigh the costs for many owners.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

While there are many uncertainties when planning for the future, one factor that is almost always essential to the success of your future plans is cash flow. Measuring your company’s cash flow and knowing what aspects of your business can be affected by the health of your cash flow are even more crucial in today’s economy. Having an accurate representation of your cash flow can also make or break your plans for the future, including any ideas you might have about backing away, transitioning ownership, delegating management responsibility, or an outright sale of your business. Since you can’t escape the impact of cash flow, you might as well take it head on, right?

What is Cash Flow

While there are many ways to think about cash flow, the concept that might work for business planning purposes is free cash flow. Free cash flow is the portion of the annual net cash flow from operating activities that remains available for discretionary purposes after the business has met its basic financial obligations. In this discussion, the “discretionary purpose” could be any anticipated use of cash flow to support the business or personal goals and objectives of the owners of a closely-held business. So, free cash flow might be supporting new initiatives, return on investment for current or new owners, cash-based incentive compensation plans, or the buy-out of one or more owners. In other words, cash flow can be described as the engine that powers your plans for the future.

Importance of Cash Flow

Cash flow is so essential because it impacts just about every aspect of your current and future business operations and planning. Cash flow can affect the value of your business, the magnitude of risk associated with the business, and the business’ ability to manage debt or fund growth.

As much as we don’t want to admit it, cash flow is the lifeblood of a company. Owners must understand —and be able to measure —where cash comes from and where it goes. It is an accurate indicator of the financial health of your business. Unlike more subjective measures, it makes no assumptions and entertains no preconceptions.

3 Ways to Reboot Your Cash Flow Strategy

  1. Assess Billing and Collections Practices – It may be time to do a complete review and overhaul of your customer relationships, invoicing practices, collections policies, discount policies, and credit policies for your customers. You may find that your cash flow pipeline has many small leaks that, once plugged, can impact the stability and predictability of your cash flow.
  2. Rethink Spending and Financing – Right now businesses are revisiting business priorities and expenses in ways that they did not anticipate as recently as last year. Changing from owning to leasing equipment and facilities, renegotiating pricing or terms with suppliers, and taking advantage of widespread changes in the way businesses operate and interact can lead to big savings. You may have leverage or bargaining power that you haven’t had in the past.
  3. Put It in Writing – Ultimately, we are talking about free cash flow because good business planning requires a constant eye toward the future and what you want it to look like. Thinking through your priorities for the future, and how they may have changed, can allow you to rebalance your use of free cash flow to best suit your goals as they stand today. Business planning shouldn’t be a static process in which you set your course and then just assume you’ll arrive at your destination. Frequent course corrections are often necessary to finally reach your targets. A short, written, prioritized list of your priorities and how you’ll use your current and future cash flow to support them, is a tangible way to visualize your plans for the future.

Keeping Your Eye on the Ball

You may be putting out fires and managing unexpected crises more frequently now than in the past. But you also know how important it is to look to the future and make decisions that you believe will help achieve your long-term goals. It’s possible to do both.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

KAFL is committed to helping our partners navigate these challenging times. Whether it be new legislation or executive mandates, we are dedicated to ensuring your clients have the long-term protection they need, now and in the future. Here’s a great resource from one of our carrier partners, Bernie Portal, on how to safely re-open your business. Click here for information.

 

Excellus is gearing up for open enrollment training for 2021 and they are excited to bring you a new way to learn about new products and programs. They know the preference for most of our brokers is training in an online format. And with everyone doing their best to maintain social distance these days, it became clear the ability to conduct meetings and training in a virtual setting would be needed, as well.


Their new online sales hub will be able to help you do just that, giving you convenient, on-demand access to pre-recorded training videos and sales collateral.
This will include a pre-recorded webinar available in September for our annual Open Enrollment meeting. Please contact your KAFL Employee team member at enrollment@kafl.com if you have a topic for consideration on the agenda. Further details will be provided as we get closer to the Open Enrollment meeting.

They will be reaching out via email in the next week or so to provide each of you with a unique URL for accessing the sales hub along with additional details.

For the original communication from Excellus, please click here

Prudential has pulled their Guaranteed Death Benefit UL Protector (single life only, not survivorship)

  • The deadline to get applications to Prudential is 7/13 therefore they need to be at KAFL by noon on Friday, 7/10

Prudential has pulled their Survivorship Variable UL in NY only

  • The deadline to get applications to Prudential is 7/19 therefore they need to be at KAFL by 10:00am on Friday, 7/17

Beginning Monday June 8th health insurance carriers will begin to send notices to individual and group health insurance customers notifying them of the 2021 rates they are requesting.  PLEASE NOTE: these rates are not final and are subject to change.  The State of New York Department of Financial Services can come back to the carrier to adjust their request and the new rate would be communicated as the “final rate” for 2021 at a later date.  Once the group gets the notice from the carrier it is their responsibility to distribute it to any employee in that specific plan (note each plan may have a different rate change).  In addition these notices can be sent in either hard copy form or electronically to the employees.  If you have any questions please don’t hesitate to reach out to any member of our Employee Benefits team for help.  Thank you!

Business owners have a lot of information at their fingertips. There are calculators and assessments available for just about every aspect of your business and personal situation. As a result, many business owners think they have an accurate idea about the value of their business. They may even think they have an idea of where the business value should be at their departure from the business. And retirement needs calculators are abundant, claiming they’ll give business owners a good idea about what they’ll need if or when they step away from their businesses. It can be difficult and somewhat complex to accurately measure the value of a company today, and then what it needs to be worth when the owner is ready to leave. Owners may be surprises to find “the gap” between the current value of their company and where the company value should be when they are ready to move on is much different than what they predict.

Start Your Gap Analysis

A Gap Analysis is the process that you can use to establish a few important benchmarks in your plans for the future, whether you intend to hold your business interest forever, transition ownership over time, or sell out completely in the next few years.

Step One – Quantify the money you will need to reach your personal financial goals.

Step Two – Determine the value your business can contribute toward meeting your financial targets today.

Step Three – Given your expectations for the future of your assets outside the business, try to predict what your business will need to be worth in the future in order for you to reach your financial goals.

Keep in mind that self-assessment and guesswork can only get you so far. You’ll ultimately want to work through this analysis with an experienced professional.

The size of the gap can help you set your priorities and timeline, highlighting your need for building business.

Do You Need to Create a Value Building Plan?

Once you get an understanding of the gap between current business value and where you need to be, you can start developing action steps for the future. Building business value can be an important factor in closing that gap. Many owners know they have to increase business value and want to grow their companies. But owners don’t always know how to do so. You can start by setting the scope of the value-building project.

  1. Reorient yourself from working in the business to working on the business. This means as difficult as it might be, set aside your day to day activity and focus on the bigger picture and how you’ll increase value.
  2. You will need to determine how much the company needs to grow each year to reach your ultimate goals. Create monthly, quarterly, and annual cash flow projections. Focus your energy on reaching short-term goals that build toward longer-term targets.
  3. Repeat your gap analysis. Your gap analysis is the foundation for your value-building decisions: the tools and processes you will use, the support you will need, and the intensity of your efforts. You may need a course correction.

Taking these steps to understand where your company currently stands, where you need to go, and what you need to reach your goals is a great way to effectively include your business in your larger plans for the future. Building business value might be the most important action a business owner can take whether they are ready to leave their business or not.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

In times of great uncertainty or disruption, some business owners will panic and bury their heads in the sand. Some will sit tight and wait for things to settle down. But others will try to create opportunity and future growth. Which will you be? We’re here to help you be the latter.

Minimize Tax Exposure

In your annual tax review with your internal and external teams, try taking a new perspective on tax planning. Ask for help in investigating:

  • Federal and state tax relief programs and government stimulus or support measures.
  • Strategically using losses in a single tax year.
  • Leveraging tax reduction devices, such as qualified retirement plans, healthcare plans for all employees, or programs that encourage investment in disadvantaged areas.

Tighten the Belt

Your peers and competitors are making difficult decisions right now about  where to cut expenses or streamline operations. Sometimes it takes a big event to help business owners see their business models in a new light. You’ve no doubt already made some changes, and your future business value may benefit from making more of these tough decisions now, such as:

  • Combining roles and responsibilities to more efficiently deliver your products or services.
  • Canceling or delaying planned expansions or equipment purchases.
  • Eliminating customers or lines of services that require a high level of human capital or a high degree of customization, which can eat into profits.

Be cautious to not let these decisions affect the remaining employees’ morale. Whatever decisions you make, be sure to keep communication open and frequent to eliminate any fears and concerns within the company.

Consider Growing Rather Than Shrinking

Now may be the time to acquire smaller, less adaptable companies who are struggling to continue. You may have strategic business plans that are more achievable with the help of another company’s assets. Keep in mind that you may not need to acquire an entire business if that approach does not work for you. Consider these options:

  • Purchase the customer list of a competitor who is not going to continue their business.
  • Look at acquiring inventory, equipment, or staff from smaller competitors; these may be options for growing your business that weren’t available just a few months ago.
  • Suggest seller financing and more flexible payment terms; sellers are willing to consider alternate sale structures when bank financing and cash are less likely to be available.

Personal Planning Considerations

Be sure to revisit your personal planning in light of any recent changes in your business value, investments outside of your business, or other areas of personal financial stability. Think through issues such as:

  • Business Continuity – how will your business continue if something happens to you?
  • Exit Timeline – how has your personal plan to continue working or owning your business changed recently, and what adjustments are necessary to get you back on track or support your new timeline?
  • Family Support – Do you have family members who need additional support, financial or otherwise? If so, are there creative ways you can help them?

We strive to help business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

Guidance to Insurance Producers Regarding Required Notifications to Policyholders

Pursuant to Governor Andrew Cuomo’s Executive Order 202.14, on April 7, 2020 the Department of Financial Services issued Emergency Regulation 62, which states in part that insurers “…shall extend the period for the payment of premiums to the later of the expiration of the applicable contractual grace period and 11:59 p.m. on June 1, 2020 for any individual, small group, or student blanket comprehensive health insurance policy, for any policyholder or contract holder who can demonstrate financial hardship as a result of the COVID-19 pandemic”.

Insurance producers are required to provide notification to policyholders by April 21, 2020, which represents 10 business days from the regulation was issued.  You may access a sample notification here.

Article information provided by NYSAHU. Disclaimer: The content of this message is for informational purposes only, and is not intended to provide legal advice.  You should contact your legal counsel for legal guidance.

All business partnerships eventually come to an end when one or more partners leave the business, whether by choice or otherwise. Being prepared for the end of the partnership decreases the possibility of unwanted challenges between co-owners down the road.

Common Reasons Why Partnerships End

Co-owners share a unique relationship. They have built a company together, sometimes out of nothing. They have been through the good times and the bad, working diligently to keep their company thriving.

Partnerships between co-owners, like any relationship, change over time. Partners can grow apart; goals and visions can change. Co-owners may have different financial situations or targets. The ways in which they intend to take care of their families in the future may differ. Partners may be on different timelines due to age, health concerns, or personal interests. And of course, one owner may become disabled or die unexpectedly. The reasons for a partnership to end vary widely. Being prepared for any of these scenarios is crucial.

Ways to Limit Co-Owner Friction

Being prepared for the worst can significantly ease tensions between all parties involved, both today and at the end of the partnership. There are several things to keep in mind when attempting to limit friction between co-owners.

Retirement Needs Analysis

Consider how much each co-owner will want (or need) on the day he/she leaves the business. Each owner should understand what the value of the company is today, where the company will need to be when each owner decides to leave, and how much an owner will need or want to sustain their life after their departure. This is a combination of each owner separately reviewing their personal financial situation, as well as a cooperative effort to understand the current and expected future value of the business. Once these are known, owners can work together to plan now for the various possible ways each may leave the business in the future.

Risk/Liability Assessment

Each co-owner cares about the potential risk or liability associated with the business after a co-owner departs. The departure could impact the company. There may be a risk that employees loyal to that owner may also leave. Customers may feel anxious when an important partner departs. Sales may lag. The risks following the departure of an owner are different for every business. Identifying them now and putting measures in place to minimize these risks can make all the difference.

Ownership Agreements

Owners are sometimes caught off guard by an unexpected need to buy out a co-owner. Whether that co-owner has decided to retire or has recently passed away, conflict may arise about who will buy the ownership interest, how it will be valued, and what rights it includes. If the business is likely to experience a disruption at or after the departure, concerns may be magnified. Insurance to buy out a co-owner may not be available, or if it’s available it may not be enough. Disagreements and financial challenges can distract owners and cause the business to suffer. A carefully constructed and regularly reviewed ownership agreement (also called a buy-sell agreement) can address most of these issues in advance in a way that all owners (those who later leave and those who stay behind) believe is fair.

We strive to help business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notificaiton.

Please note that the Department of Financial Services (DFS) has posted guidance to insurance producers to accommodate electronic delivery of notices (and relieve them of the requirement to mail or deliver such notices) pursuant to DFS’s March 30, 2020 Emergency Regulations that created new 11 NYCRR § 229.5(b) and 3 NYCRR § 405.6(b)(4).  The guidance is available on DFS’s website at https://www.dfs.ny.gov/industry_guidance/electronic_notice_obligations.

Additionally, to facilitate such notifications, DFS has posted model notices linked at the bottom of the guidance described above that the producers who have not yet sent notices may use.  The text of the model notice for holders of life insurance policies or annuity contracts can also be found at the bottom of this email.

PRODUCERS MUST SEND THE APPROPRIATE NOTICE TO THE APPROPRIATE CONSUMERS TO AVOID CONFUSION 
PRIOR TO 4/10/2020

Template for Policyholders

Important Underwriting and New Business Updates

An Important Update from Ray Caucci, Senior Vice President, Product Management and Underwriting and Gretchen Dinucci, Vice President and Chief Underwriter

Throughout the rapidly evolving pandemic, we have been evaluating our underwriting and new business practices continuously to support business continuity, deliver a consistently high level of service and maintain our financial strength. We have been working closely with our key strategic partners, including the reinsurers, to effectively navigate the risks associated with the pandemic.

As a result, effective at the close of business today, Thursday, April 2, 2020, we are implementing the following temporary changes to our life insurance underwriting and new business guidelines for all cases not already approved or issued as noted on InSight.

  • Postponing any applications on individuals with an insurance age 70 and older
  • Postponing any applications on individuals of any age rated worse than a Table Four
  • Suspending acceptance of funds from external replacements in excess of $250,000 gross cash value
  • Suspending the following programs until we have clarity on the pandemic’s impact:
    • Table Four to Standard Fold In Program
    • Survivorship Whole Life Rate Class Upgrade
    • Lifestyle Credit Program

We are making these changes after careful consideration of the potential business disruption. We expect to re-visit these and other changes as we gain better insight into the impact of the COVID-19 pandemic.

As a mutual company, we have always taken the long-term view in service to our policyholders’ best interests, and we continue to do so today. We remain committed to maintaining a prudent, long-term approach as we navigate the COVID-19 pandemic — with a continued focus on delivering on our promises to policyholders and financial professionals.

Thank you for your flexibility and understanding as we all continue to adapt to changing conditions.

If you have questions, please contact your KAFL brokerage manager.

 

As a result of the COVID-19 outbreak, DFS understands that it may be challenging for certain producers to obtain the requisite number of continuing education credits in advance of their license expiration dates.  As a temporary accommodation, DFS will suspend the expiration of licenses for all individual producers for the next 60 days and waive any late fees resulting from, and accruing during, this suspension period.  At the end of this 60-day period, all licenses that would have expired but for this circular letter will automatically expire unless the producer has submitted a license renewal application, including completion of all necessary continuing education credits, before that date.  Furthermore, DFS will suspend the requirement that a monitor be present to complete producer continuing education and pre-licensing course exams online during this 60-day period.  Except as provided in this circular letter, all licensing requirements, including those relating to continuing education, will continue to apply.

Please direct any questions regarding this circular letter to insurance.covid19@dfs.ny.gov.  Producers are also encouraged to visit www.dfs.ny.gov for periodic updates related to licensing requirements.


March License Renewal and
Insurance License Reinstatements

 

The Commerce Department is providing temporary, emergency relief in regard to March license renewal and insurance license reinstatements.

Renewals. The March 31, 2020, deadline for insurance producers and adjusters to comply with renewal requirements is delayed to April 30, 2020.

Individuals who are due to renew a Minnesota insurance producer or insurance adjuster license by the end of March now have until April 30, 2020 to complete all renewal requirements, including continuing education hours and the required application and fee. These renewal applications can be submitted anytime between now and 11:59 PM Central time on April 30.

Reinstatements. The deadline for producers and adjusters to reinstate a lapsed license without having to retake and pass the written examination by paying twice the unpaid renewal fee is also delayed. Individuals seeking to reinstate will be able to reinstate but are still responsible for paying double fees in order to do so.

Individual questions are best directed to licensing.commerce@state.mn.us. Commerce staff are responding as soon as possible to written inquiries from all regulated license types.


Amended Special Notice to Oklahoma Insurance Professionals|
March 20, 2020 (updated April 3, 2020)

To: All licensed Insurance Professionals

From: Oklahoma Insurance Department- Licensing Division

The Oklahoma Insurance Department, led by Commissioner Glen Mulready, has closed both the Tulsa and Oklahoma City office locations to the Public​.  The Licensing Division is currently utilizing our telecommute policy and maintaining daily operations regarding the review and processing of license requests and changes.  Our availability by phone may be limited at times while we prioritize applications, incoming emails and other requests, but we do have Division staff working every day to minimize the effects of the current public health situation.

At this time, the Governor has issued Amended Executive Order 2020-07 which orders:

“All occupational licenses issued by any agency, board, or commission of the State of Oklahoma that expire during this emergency shall be extended so long as this Order is in effect. All occupational licenses extended during this Order will expire fourteen (14) days following the withdrawal or termination of this Order.” 

You can view that order by clicking here: https://www.sos.ok.gov/documents/executive/1916.pdf

The Oklahoma Insurance Department is temporarily extending the deadline for continuing education requirements to the fourteenth (14th) day following the withdrawal or termination of Governor Stitt’s Amended Executive Order 2020-07.

With advancements in technology and a move by the Department to all paperless procedures several years ago, this current situation will cause minimal internal setbacks to the renewal process of current licensees.  Licensees can take CE classes online, view their transcripts online and renew electronically through the NIPR.

In order to assist Oklahoma licensees with completing their continuing education requirements, the Oklahoma Insurance Department is temporarily allowing Oklahoma Continuing Education Providers the ability to offer courses that are approved for the classroom course method as webinars until May 1, 2020.  In order to qualify for this allowance, the CE Provider can e-mail Education@oid.ok.gov  to request the form required for approval of this special allowance.  If you are a licensee, please contact your Provider directly to discuss changes to any courses you may have scheduled in advance.   You can view the current course catalog by clicking the following link:

https://www.oid.ok.gov/licensing-and-education/course-or-provider-lookup/

​Prometric, Oklahoma’s Examination Provider, has advised they have suspended operations at all national testing centers, including all locations here in Oklahoma.

You can view their statement here:  PROMETRIC  or by reviewing our website www.licensing.oid.ok.gov

We understand the delays this will potentially create with employers. At this time alternate examination options are being considered.  This situation is very fluid and alternate avenues are being discussed to determine the best approach to keep business moving during this time of wide-spread uncertainty.   We are actively working with the NAIC, NIPR and other state regulatory departments to monitor this situation and implement changes to normal processes and procedures when deemed necessary.

The mission of the Oklahoma Insurance Department is to protect and enhance the financial security of Oklahoma and Oklahomans. Additional notification will be provided to all licensee’s as the situation evolves.  Thank you in advance for your patience and understanding as we all work together to minimize delays and hardships to our licensees and the industry while still providing the protections needed to Oklahoma Consumers.

Oklahoma Insurance Department
Licensing Division
400 NE 50th Street
Oklahoma City, Oklahoma 73105
405.521.3916 phone
www.licensing.oid.ok.gov

To Our Advisors, Clients and Partners,

Your health and well-being and that of our employees is of the utmost importance to us.

Like you, we are continuously monitoring the latest reports from the Monroe County Health Department, NYS Department of Health and the CDC.  We have taken a number of precautionary measures to protect your health and well-being and that of our employees.

In our efforts to continue to provide you with excellent service, we are currently maintaining normal business hours of operation from 8:30am to 5:00pm.  Our team is however prepared to work remotely if required to by the state authorities and CDC.  We are taking the necessary precautions to protect our team, including extra cleaning and preventive measures, travel restrictions and the utilization of phone/virtual meeting options rather than face to face meetings.  We’re asking that you do not visit our Rochester office location unless you need something urgently or if you have a scheduled appointment.

We’ve also opened up our telengage program, waiving the current minimum premium amounts and adding additional staff to assist in the processing of these requests.  This process allows us to take applications for you over the phone at a time that is convenient for your client, allowing us all to assist them with their needs while limiting direct face to face contact.  We strongly encourage you to use this program so you can keep your business going and support the needs of your clients when they need it the most.  Because of the downturns in the markets, our products are more important now than ever.

We will continue to closely monitor the situation and evaluate additional measures to support you and our employees as needs arise.  If you have any questions on how to best utilize our electronic and phone options for applications please reach out to Barrie Priyanto at extension 149. Please stay safe and healthy.  ~Lorrie

Lorrie L. Gibbons, MS, ACS, FLMI
President & Principal ~ Proudly Employee Owned
D: 585.271.6400 x125 / 800.272.6488 / Fax: 585.271.5050
800 Linden Avenue, Rochester, NY 14625

KAFL Inc – Safety and Wellbeing Actions

Whether it’s because you want to keep the business “in the family” or because you suspect you will not be able to find a good buyer for your business, you may be thinking of selling your business to an employee. The first thing to think about is the kind of employee who can and should take over leadership and ownership. You’re entrusting your business and its future to this person or group of people. We suggest that a “key employee” may be a good candidate to purchase the business.

What is a Key Employee?

Key employees are those who have a direct and significant impact on business value, meaningfully participate in the business’ strategic future, and whose combination of skills and experience would be exceedingly difficult to replace.

Why would you sell to you key employees?

One reason you may want to sell to a key employee is that you believe you have already achieved financial security. You may feel that your employees have earned ownership or that you owe them ownership of the company for their many years of loyalty.

Another reason is you may not have an alternative option. Maybe you have no other third-party offers and no children to pass along the business to, so you look to your rock star employees to continue building your legacy.

Selling to Employees can be Both Fast and Slow

If you have some time to complete a transfer, a key employee might be a good option. Often, an owner must stay active in (or at least in control of) the company for five or ten years after the sale process begins in order to complete a successful transfer and attain financial security. In these years, owners hire and groom employees who not only want to be owners but also have the ability to assume ownership.

If your business has a business value today that you think is too low, you may also be considering a sale to a key employee. Taking more time to transition ownership to one or more key employees may also give you more time to grow business value and capture profits.

On the other hand, selling your business to key employees might be faster or less risky. Typically, key employees are very involved already in the day-to-day activity of the business. They will know how you want your company to be ran because you have groomed them to run it a certain way. They may share your vision for the future and see opportunities for growth and success that outsiders might miss. As a result, your key employees may be excited to get going on transitioning ownership sooner rather than later.

If you’ve been thinking about selling to employees for many years, or if the thought is just now occurring to you, you’ve reached the starting line for the next phase of your business owning journey.

We can help business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact Peter Skelton at (585) 271-6400 x 108 or peter@kafl.com at your convenience.

Copyright © 2020 Business Enterprise Institute, Inc. All rights reserved.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

Planning for a successful future isn’t homogenous. It simply can’t be. The needs that you and your business have are likely to be different from every other owner and business out there. So, the question you might ask about planning for future success isn’t, “How should I do this?” Instead, it should be, “Which process is the best for me?” Today, we’ll look at three different ways you can begin the process of planning for future success.

Urgency Planning

Many owners like to approach their planning through the lens of urgency. Urgency planning means identifying goals or problems that are of the highest risk, ranking them by risk, and then tackling each element in order. This may seem straightforward, but there are some considerations.

  1. How do you define risk?
  2. Why do you think a certain aspect about your business is subject to risk?
  3. Why do you think you must address this risk before or after others?

Determining why things are urgent guides the planning process. If tackling projects based on their criticality is what’s most comfortable for you, it’s important for you to know why those things are critical and how they affect the other critical things down the list. Pausing to understand your reasoning may also give you some insight into your more fundamental priorities.

From-the-Ground-Up Planning

When business owners first start thinking about planning for a successful future, from-the-ground-up planning is what they initially envision. (This might be a reason why owners sometimes find the concept overwhelming.) The process for from-the-ground-up planning often looks like this:

  1. Getting internal affairs in order. This could be hiring the right and appropriate number of people, conducting quality control, or creating yearly goals for each team.
  2. Develop management. Once the house is in order, the next step is to find or train managers who can run the company themselves. Developing a strong management team is critical to the success of from-the-ground-up planning because it’s the managers—rather than you—who will keep internal affairs in order and exceed expectations. This will give you time to move to the next step.
  3. Designing your ownership transfer. Whether you stay in your business forever, transfer to insiders, or cashing out with an outside third party buyer, you’ll need to determine the appropriate amount of money you must have to achieve financial independence and how the business can support that need. Planning your future may include anything from installing programs to incentivize, retain, and/or reward key employees to creating a set of business continuity instructions in case you die or become incapacitated.

Hybrid Planning

Hybrid planning takes the two planning methods from above and mixes them together. Doing so lets you maintain a balanced momentum toward the things you’re excited about pursuing while still addressing the most daunting aspects of your planning process.

For example, you might be excited about building your company’s value but dread the idea of finding a next-level management team because you’ve never had one before. A hybrid method lets you combine your urgency planning (building value) with your from-the-ground-up method (installing next-level management) so that you aren’t disregarding the things you’d rather not do. Similarly, you might combine your urgent desire to install your kids as the next generation of owners and leaders, but you’ll also need to support the company documenting its internal systems and processes (a fundamental factor for business stability), which can help your children be more successful.

We can help business owners identify and prioritize their objectives with respect to their business, their employees, and their family. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact Peter Skelton at peter@kafl.com or 585-271-6400 x108.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notificaiton.

Income protection is an important topic to talk about – and most people have a need for individual disability insurance (IDI). So, how can you find clients to talk to – and expand your business? Prospects are all around you!

4 tips to find income-protection clients

  1. Talk to existing clients – You’ve already built trust and know their needs, so contact high-income earners, like attorneys, CPAs, veterinarians and engineers.
  2. Use LinkedIn to your advantage – Search for connections by employer and industry, then ask your connections to introduce you to those you have mutual interests with.
  3. Be visible in your community – Host a booth, organize an event or volunteer and network with local leaders.
  4. Attend organized events – Seek out civic and professional groups and associations that cater to specific demographics and occupations, like business owners or architects.
  5. Identify key markets and learn how to engage with them.

We’re here to help…Contact us to discuss IDI prospects and sales opportunities!

 

The end of the calendar year also means the end of the plan year for many members. Please have your groups keep in mind these important deadlines about HealthyRewards if this is the end of their plan year.

For members renewing their HealthyRewards plan (subscriber ID not changing):

HealthyRewards credits/dollars should be redeemed online on or before December 30, 2019. December 31, 2019 is a blackout date and members will not be able to access the program.
If credits are not redeemed before December 30, 2019, members will have 90 days, beginning on January 1, 2020, to login to their account and redeem their credits online. At this time, a countdown clock will appear within their account indicating the 90-day countdown has begun. After 90 days, members will have 30 additional days to redeem their credits through our customer service department by calling the phone number on the back of their Member ID card.
Any credits/dollars not redeemed 90 days after January 1, 2020, will be forfeited.

For members who are terming their medical plan:
Members who are not renewing with Rally are highly encouraged to cash out their rewards prior to termination or they will require manual cash out. Manual cash out requires the member to call the customer service number on the back of their Member ID card and provide the following information:

Email Address
Contact Number
Mailing Address
Dollar Amount

This information will be sent to Rally who will then send a Visa gift card to the member within 30 days. Members will not have the option of selecting another retail gift card.

 

 

https://broker.excellusbcbs.com/resources/news/article?articleId=174049858&classPK=174049860

What is Form 1095-B?

The Form 1095-B is used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage.

Taxpayers are not required to include a Form 1095-B when filing their taxes; in fact, you should not attach a Form 1095-B with your tax return.

What’s New?

Health insurers are no longer required to mail Form 1095-B to their members. If you do want a copy of your Form 1095-B for your records, however, Excellus BlueCross BlueShield is providing four different methods for you to do so. https://www.excellusbcbs.com/form-1095-b

As a business owner, you make decisions constantly that you believe will reduce your risk and/or improve your business outcomes. There are countless ways to do this. In this article, we’ll present ways to leverage your internal strengths to reduce risk and improve business outcomes. We’ll also show you how these strategies can affect your longer-term, post-business planning.

An effective strategy for reducing risk and improving outcomes is having a management team that can run the business in your stead. There are numerous benefits of having such a management team. First, it reduces your company’s reliance on you. This can give you more time to focus on the biggest goals you have for yourself, your family, and your business.

Second, it can act as a source of new ideas to improve the business in general. This is especially true if your management team has a diversity of experience. Different experiences can lead to different, sometimes unconsidered, strategies to improve business outcomes.

Third, it often increases the value of your business. Whether you hope to sell to a third party or an insider, or even work until you die, having people other than yourself who can keep the business humming makes it more attractive to potential buyers.

Having a strong management team also ties into your long-term, post-business planning. If you hope to eventually sell your business to insiders, the management team may end up being a qualified buyer, or they may be critical to supporting your children as they take over leadership. This can give you a head-start on bolstering future performance for a strong and healthy company, leading to a more successful transfer.

For example, incentive plans for your management team give them more responsibility, which lets you determine whether they’re fitting successors or high-level executives. Incentive plans also motivate the team to continuously improve the business because any rewards are contingent on achieving goals that contribute to your future success. This can allow you to wind down your responsibilities without giving up control while increasing your income, reducing your risk, and improving your outcomes.

To take it one step further, a common misinterpretation is that owners must transfer all of their ownership to insiders at once. This isn’t necessarily true. There are many ways to transfer portions of ownership over time, which are often tied to good incentive planning. This can keep you in control while you delegate more responsibilities to other people. It also gives you an out if your management team proves incapable of meeting or exceeding expectations, which protects you against risk.

If you intend to sell to a third party or work until you die, you can set up different kinds of incentive plans to make your desired path and tenure easier. You might consider a “Stay Bonus” structure in your incentive plan. It rewards managers who stay with the business through and after you transition out of it. This reduces the risk that important players will abandon ship and negatively affect your company’s value.

How can you know whether you have a management team that can reduce risks and improve outcomes? A good indicator is how the business operates in your absence. If you’ve ever taken extended time off only to find yourself addressing business issues on your time off, it’s likely you don’t have a strong management team (the same applies if you feel like you can’t ever take extended time off). If you aren’t confident that your management team can run the business well without you, you may want to consider finding managers that can.

To reduce risk and improve outcomes, you’ll likely need to look outside of yourself. But this can be extremely beneficial to yourself, your family, and your business. However, leveraging your internal strengths (or finding strong external managers to join your company) can take time. This means that it’s likely in your best interest to start this planning now, before you absolutely need it, rather than when you need it.

If you’d like help in working through the ways you might reduce risk and improve outcomes in your business, please contact Peter Skelton today at peter@kafl.com.

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

Information provided by Business Enterprise Institute, Inc.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notification.

With this recent announcement by Excellus and Lifetime Benefit Solutions, we want you to know that KAFL is here to support you. Contact the KAFL Employee Benefits Team today to learn how we can help!  585-271-6400

 


Our Partner Lifetime Benefits Solutions’ 2020 Strategic Direction

We are writing to inform you about our partner, Lifetime Benefits Solutions’ (LBS), strategic direction for 2020 and beyond.

LBS has achieved great success over the last couple of years. Its ancillary lines of business (pharmacy, HRA, HSA, FSA, COBRA, compliance, retirement services) are growing steadily both locally and nationally.

LBS’ medical and dental TPA businesses have not been able to grow the way they had hoped.

To be as efficient as possible, LBS hopes to sell over its TPA businesses, where possible, to Excellus BlueCross BlueShield, who specializes in self-funding. This will allow LBS to focus on becoming a local and national leader in ancillary services.

LBS Account Representatives will be reaching out to their medical and dental TPA customers to inform them of this decision and to discuss their options after the current contract period.

For your ancillary services customers, there will be no changes. LBS will continue to provide high levels of customer satisfaction and innovation to serve you even better in the years to come.

Click here for original communication from Excellus.

New York has had a suitability regulation for producer annuity recommendations, but this regulation did not apply to life insurance. The regulation has been expanded to:

  • any producer recommendation to a N.Y. resident of a transaction involving any type of life insurance
  • a producer recommendation to a N.Y. resident of either a new life insurance policy or an in-force transaction (for example, a conversion of a term policy into a whole life policy)
  • require the producer to meet a “best interest” standard when recommending the purchase of life insurance
  • require the producer to have a “reasonable basis” when recommending life insurance to a N.Y. resident, including having confidence that the client has the financial ability to make the premium payments and for the producer to document that basis
  • require the producer to make certain disclosures to a N.Y. resident when recommending any transaction (whether a new sale or in-force) that involves the payment of new compensation to the producer
  • In addition you will need to complete carrier specific life product training, this new training is required to sell a life policy in New York beginning 2/1/20! The list of training links is available on our Get Licensed Page and will be updated as more information is given to us by the carriers.

 

Here’s your guide to being compliant with Reg 187:

  • Complete Reg 187 training before 2/1/2020 (we suggest RegEd as the course is free)
  • If you have completed Reg Ed course #484 or #485 you have satisfied your life Reg 187 training requirement.
  • Click here to see a link to state approved CE providers.
  • Send training certificate to licensing@kafl.com
  • Carriers will be changing their suitability forms so please verify with KAFL that you have the most current version of the paperwork

 

Click here for full Reg 187 Regulation

What’s your New Year’s Resolution?

Communicating better and more effectively is in the top three of my resolution list, along with exercising more and losing weight.  One of the challenges I find with communicating with clients is a reason to reach out in a way that’s meaningful and with relevant information.

One of the groups that many advisors find challenging are business owners.  Few things are bigger and more important to business owners than planning for their future success, both inside and outside the business. It’s a huge planning process, and owners need help from advisors to plan effectively. Shockingly, business owners are reporting that when they need their advisors most, they’re nowhere to be found.

According to a Ycharts survey, as reported by Caleb Smith and Irene Huhulea of Investopedia, “[T]he majority of advisory services clients are under-engaged when it comes to their relationships with advisors. In fact, 63% of survey respondents said that they were contacted by their advisors ‘infrequently’ or ‘very infrequently,’ including nearly half of clients with $500,000 or more in AUM.” Additionally, “The survey also found that 62% of respondents said more frequent or more personalized contact would give them more confidence in their financial plan and 85% would consider the frequency and style of communication when deciding to retain services.”

So, advisory services clients, including business owners, want more communication from their advisors, would feel better about their planning with more personalized contact, decide whether to retain an advisor’s services based on how well they communicate, and still feel like their advisors aren’t in contact with them enough. What can and should advisors do to address these communication breakdowns?

As an outside advisor, it’s easy to view a business primarily as an asset. To business owners, the business is often so much more. Yes, it’s important to business owners for the business to be worth as much as possible. But there’s more to business ownership than just maximizing value.  Unless advisors understand what, other than money, owners care about, it’s impossible for them to work in their clients’ best interest.

Understanding what drives business owners outside of money is much more challenging than it seems. The advent of analytical technology has made it much easier for advisors to be more indirect with their clients. They can more easily crunch numbers and create projections, sometimes without ever contacting their clients directly. This isn’t to say that this technology is inherently bad: It certainly makes planning processes more efficient. But none of these technologies can replicate the human element of planning for a successful future.

Bluntly speaking, unless advisors know how to appeal to the emotional side of planning, they cannot truly provide the advice business owners seek. The planning process is far too emotional to rely solely on cold logic, algorithms, and projections. This isn’t something that advisors can simply discount. Recall that 85% of advisory services clients consider whether to retain an advisor’s services based on how and how often that advisor communicates with them. Proper communication is what owners want, yet many advisors aren’t delivering it.

We are investing in being a leader in helping you communicate with your business owners about planning for their successful futures.

So what are some of the takeaways?

  • Advisory services clients, including business owners, feel that their advisors don’t contact them frequently enough, and will make decisions regarding whether to retain their services based on the frequency and quality of their communication.
  • Advisors to business owners must know how to communicate with their clients and prospects in ways that reveal what matters to them. Once they find out what matters most, they must do everything they can to address those matters.

If you would like to discuss how we can help you open up some conversations with your business owner clients, contact me and let’s talk!

Peter Skelton
CEO
KAFL Insurance Resources
www.kafl.com
585-955-6224 Direct
800-272-6488
585-271-5050 Fax

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial advisor. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial advisor. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.

For professional use only. All information can be subject to change without notificaiton.

“For years, my Exit Planning goal was to get out of my business on my terms. But I didn’t act until I saw the consequences of inaction staring me in the face.”  –A Former Business Owner

“I believe that my exit from my business will most likely occur as a result of planning and action items that I implement.” —80% of respondents to The BEI 2016 Business Owner Survey

Most business owners know that they need to plan for their business exits. Once they begin the Exit Planning Process, they often find relief in the actions they can take to assure a financially independent exit. Why then do fewer than 20% of owners have a written Exit Plan?

Actions owners have taken toward their exits graphic

BEI’s experience with Exit Planners and statements from business owners themselves suggest that it is unrealistic to expect owners to act on their own initiative or even at the suggestion of an advisor. For any number of reasons, most business owners push Exit Planning to an unset, later date. But some owners do act. Why? For insight, let’s look at the situation of Miles Smith (a pseudonym for a representative owner).

Inaction: A Common Reaction to Solid Advice

Miles Smith owned a successful environmental remediation company. At age 62, he knew he needed to do something to prepare for his business exit. He first met with his financial planner, who referred him to Sally Campos, an Exit Planning Advisor.

During their first meeting, Sally did two things: First, she summarized the Exit Planning Process using examples from prior Exit Planning engagements. Second, she described the relationship between transferable value and Miles’s role in the business. Sally then asked Miles which role he played in his company’s major decision-making actions.

“Just about everything that matters goes through me,” Miles said proudly.

Sally knew that Miles’s role in his business would need to change if it were to have transferable value, and she shared her thoughts with Miles. Miles knew that he needed to do something to make sure that his company would still be valuable without him, and he even told Sally that he agreed with her. But after he left Sally’s office, he did nothing, despite Sally’s comprehensive description of the importance of transferable value, despite how Exit Planning could increase transferable value, and despite all of Exit Planning’s benefits.

This passive refusal to act by savvy, decisive business owners seems paradoxical. Why don’t these smart people do what is in their best interests?

In my experience, business owners feel comfortable being business owners. They enjoy what they do, but rationally, they know they need to change their roles in the business eventually. But most owners don’t resist planning their exits on a rational basis. They resist Exit Planning at an emotional level.

This emotional resistance manifests not as outright rejection of the Exit Planner’s suggestions, but rather as passive inaction. Business owners know that Exit Planning is necessary, but emotionally, they are not prepared to take that plunge. So, they ignore the problem until they’re ready emotionally, and by then, it’s often too late to create a plan that helps them exit their businesses on their terms.

How can business owners and advisors confront and overcome emotional roadblocks, especially when most owners and advisors would consider themselves experts in rationality?

Understand That Rationality Only Goes So Far

As professionals, business owners and advisors are trained to be logical, accurate, and rational. When Sally met with Miles, she used logic to explain what Miles needed to do if he wanted to exit his business on his terms. Miles agreed, because he understood her argument and what he needed to do, but he did nothing. Miles knew he had to do something, but he didn’t feel he had to do it now.

Whether you’re a business owner or advisor, you might read that last sentence and think, “That sounds like laziness or irresponsibility to me.” I can assure you—based on my own experience and countless stories from other owners and advisors—that rarely are such situations the result of laziness or irresponsibility. Instead, they’re the result of neglecting the important but sometimes hard-to-wrangle concept that exiting a business is an emotional event that requires an emotional response from both business owners and advisors. BEI has found a way to address these issues without requiring a doctorate in psychology.

Understand That Speaking to Emotion Is Necessary and Valid

In their 2010 book, Switch: How to Change Things When Change Is Hard, Chip and Dan Heath noted, “. . .the core of the matter is always about changing the behavior of people, and behavior change happens in highly successful situations mostly by speaking to people’s feelings.”

It’s common for business owners and advisors to disregard emotion when making business-exit decisions, because most of us are either uncomfortable or unversed in handling the emotional aspects of a business decision. Yet, in talking with owners about their business exits, it is important for advisors to realize that, for owners, this is not a simple, logical business decision. It is one of the most emotional decisions business owners will make in their lives, on top of being one of the most important financial decisions that they will make. That’s why speaking to emotion is not only valid but also necessary for a successful business exit. But how can we do that?

Speaking to Emotion in a Business Context

Let’s give Sally a second chance and assume she understood the need to focus first on emotions over rational explanations. How would that meeting go?

First, rather than try to convince Miles of the need to change, Sally let Miles convince himself that he needed to change his role. She asked Miles to complete a short assessment provided by BEI that identified his exit goals and objectives, and pinpointed the specific areas of his business that he felt needed improvement.

For example, Miles answered “No” to the following prompt about his management team:

  • Statement: Buyers look for and pay well for companies with motivated and long-standing key employees. Unless key employees are able to run the business without the owner, the company is neither sustainable nor salable to a buyer, employees, or the owner’s children.
  • Question: Can your management team run your company in your absence?

Asking owners to assess their businesses appeals directly to both their rational mind and their emotions. In completing this short assessment, Miles concluded that his business would collapse without him at the helm.

“This business would not exist without me,” Miles said. “I can never leave.”

“And is that OK with you?” Sally asked.

The consequences of his continued inaction stared Miles in the face, and he felt it in his bones.

“No,” he replied. “But what can I do?”

Sally then described Exit Planning as both a process to exit his business and a means of moving his business forward. She explained to Miles how Exit Planning could help him create transferable value that would allow him to reach his personal financial goals and ensure the business would continue to flourish without him. The idea of progress appealed to Miles.

With Miles on board, Sally then explained that Exit Planning and value building would take years. Fortunately, during those years, Miles could change his role and focus his efforts on areas of the business that would most benefit him and his company. Sally showed Miles that Exit Planning did not mean exiting before he was ready, either financially or emotionally. Working toward an exit on his terms also appealed to Miles.

Once Miles understood that every Exit Planning action would be based on his goals, aspirations, and concerns—both financial and personal—he was willing to trust the process and Sally.

In explaining the benefits of Exit Planning to business owners, appealing to both their minds and hearts is essential. That idea is at the core of The BEI Seven Step Exit Planning Process.

Whether you’re a business owner looking for an advisor who can speak to both the rational and emotional concerns you have about your business exit, or you’re an advisor who wants to become the kind of advisor who can help owners navigate the rational and emotional roadblocks inherent to a business exit, we encourage you to contact us or call 303-321-2242.

Future Reading

In the next several articles, we’ll look at how some of BEI’s other assessment questions help pinpoint areas of concern for owners. These questions can help owners and advisors assure that they’re speaking on the same terms, both logically and emotionally, when discussing business exits.

Source: Submitted by John Brown on Wed, 12/06/2017 – 5:00pm on https://www.exitplanning.com/blog/unaddressed-role-emotion-business-exits

In our last three articles, we’ve discussed the importance of exit goals and two of the three types of exit goals: foundational (financial independence) and universal (the amount of income owners want after they exit, their ideal exit date, and the party they’d like to take over the business). In this article, we tackle the third type: aspirational or value-based goals.

Values-based goals are “softer” but more emotionally compelling. These are goals owners have for themselves; their businesses; and their families, employees, communities, and others during and after they exit. Owners generally have many aspirational goals, and advisors must uncover all of them if they are to craft successful owner-centric Exit Plans.

Aspirational goals influence and often drive an owner’s decision to use a particular Exit Path. In fact, if we are certain of one thing about Exit Planning and owners it’s this: For most owners, a successful exit is not just about the money.

As an example, consider the many owners who have strong and deep emotional attachments to their companies. These owners can be reluctant to exit unless they know that their companies will retain their current culture of integrity and fairness to employees and customers. This aspirational goal of maintaining company culture may well exclude a transfer to an outside party and favor a transfer to an Employee Stock Ownership Plan or to management.

In addition to maintaining culture, aspirational goals can include:

  • Acknowledging employees
  • Family harmony
  • Owner legacy
  • Taking a business to the next level
  • Minimizing taxes
  • Community involvement
  • Retiring to pursue personal goals: travel, time with family, hobbies, etc.
  • Charitable intentions

In this article, we make the case that unless advisors recognize the importance of aspirational goals and are prepared to discuss them with their owner-clients, they are unlikely to see owners move forward with planning.

Digging for Gold

Advisors must probe their client/owners’ responses to be certain that they (and their clients) fully understand these softer, or aspirational, goals. Generally, Exit Planning Advisors kick off this discussion by asking owners to:

  • Describe their vision for their companies without them.
  • Describe their vision for themselves without their companies.

Visions can be difficult for owners to clarify and quantify, so Exit Planning Advisors ask them a series of follow-up questions. For example:

  • Why do you wish to maintain the company’s culture after you exit the business?
  • What aspects of the culture do you want a buyer to maintain?
  • Do you have ideas on how to accomplish that?

Only upon fully understanding an owner’s aspirational goals can advisors begin to recommend the appropriate actions to achieve them.

In addition to clarifying the owner’s vision, asking questions establishes the advisor’s interest in achieving their clients’ deepest wishes. When owners are confident that their advisors understand and take a personal interest in working with them to reach their aspirational goals, they are far likelier to engage them and move forward with a process that achieves all of their goals.

We hope that these articles about the importance of various types of goals have been helpful but caution that we’ve only touched the surface. It’s not uncommon to spend more time on discovering and clarifying an owner’s goals than on any other part of the planning process.

The next series of articles will describe how to understand and objectively determine an owner’s current resources (business value and cash flow, personal investments, etc.). With an understanding of owners’ goals and an assessment of their resources, advisors can begin the planning necessary to achieve their clients’ goals and aspirations.

Source: Article submitted by John Brown on Mon, 06/22/2015 – 9:38am on https://www.exitplanning.com/blog/owners-vision-future-values-based-goals

John Hancock’s Aspire is designed for people living with type 1 or type 2 diabetes, and combines the long-term financial protection you want, with a personalized diabetes support program that meets your client’s unique health and lifestyle needs, and rewards them for taking steps to manage their condition and live a longer, healthier life.

 

How Does it Work?

  • Step 1: Select the John Hancock life insurance product that best meets your client’s long-term needs and elect Aspire
  • Step 2: Register for John Hancock Vitality and complete a brief health questionnaire
  • Step 3: For qualified members with type 2 diabetes, sign up for Onduo’s diabetes management program
  • Step 4: Use the tools and resources from Onduo and Vitality to help stay healthy, record progress, and manage diabetes

 

For more details click here and contact your brokerage manager.

For a limited time, VSP members get an Extra $40 to spend on select frame brands. Now through February 29, 2020, VSP members can choose a frame from popular brands including CALVIN KLEIN, CALVIN KLEIN JEANS, DKNY, Draper James, Dragon, and Nike and $40 will automatically be applied to their purchase when they use their benefits.

Reach out to enrollment@kafl.com if you are not already registered, and we’ll follow up with a link to the training and marketing tools to help you get started. You’ll be proud to offer VSP, which leads the industry in overall member satisfaction.If you are not already registered to sell VSP, please email enrollment@kafl.com.

Questions?

Click here to download Extra $40 Talking Points and FAQs for reference.

  • Prudential will now issue all Term policies outside NY via E-Delivery
  • For NY cases that are non-replacements, they will issue an eIssue policy 
  • All term policies that do not qualify for eDelivery will now be issued via eIssue
  • Your designated Case Manager will email you the pdf of the policy for signatures
  • A paper policy will not be printed and mailed; the policy will need to be printed from the PDF file your Case Manager emails you
  • Wet signatures must be collected from applicable parties and appropriate paperwork returned to KAFL for processing

Contact your KAFL case manager today for any questions.

Life insurance with the John Hancock Vitality Program rewards you for the healthy activities you do every day. And now, you can earn Apple Watch Series 5 when you become a John Hancock Vitality PLUS member.

By walking, running, biking, swimming, or any other number of exercises you earn Vitality Points that go toward your monthly payments. The Vitality Points you earn towards your Apple Watch can also lead to additional rewards and discounts, as well as savings on your life insurance premiums, with the John Hancock Vitality Program.

Limited time offer: Now through December 31,2019.

Allows your clients to quickly and easily add a permanent life insurance policy and potentially include our Long-Term Care Services Rider

OR

Improve their rating by one class when they have a fully underwritten AXA Equitable Life Insurance Company or MONY Life Insurance Company of America (MLOA) or a select carrier’s life policy in place. See list of qualified carriers on the bulletin below.

Click here to download the below PDF

 

Lincoln’s MoneyGuard® product compliant with the new CSO tables has not yet been approved in New York.  This means:

    • All applications for Moneyguard® Reserve must be received at KAFL in-good-order by 1:00pm EST on Thursday, November 14th.
    • Lincoln will be making NO exceptions.  In an effort to accommodate all deadlines, please let your KAFL team know if you expect to be submitting an application at the last minute so we can prepare.
    • Lincoln is no longer accepting external 1035 exchange applications for Lincoln MoneyGuard® Reserve.
    • In addition, after November 15, 2019, Lincoln will not have an approved MoneyGuard® product available in the state of New York.
    • Please note that due to a very high volume of applications, Lincoln is experiencing delays with their processing and underwriting times

Lincoln is actively working with the state to get their 2017 Commissioners Standard Ordinary (CSO) Mortality Table product approved as soon as possible and we will update you as we learn more.

Additional Reminder:  Application Deadline for the MoneyGuard® II product outside of NY is Friday, November 1.   Any applications received after that date must use MoneyGuard® III, which is an increased cost for most clients.

Compliance With New York State Insurance Law and Small Group Eligibility

As part of our ongoing commitment to maintain compliance with New York State Insurance Law 4317(a)(1), we will continue to verify that our small groups are receiving community rates. As has been our practice, this process will include our request for confirmation of the number of full-time equivalent employees from our customers in the form of an Annual Group Information Form (AGIF).  Since this information is required in order to renew the group’s coverage, we will work closely with you to obtain the AGIFs for all of your groups who have not responded in the current year.  This will include additional reach-out letters to the non-responders requiring their reply.

Please contact the Employee Benefit department at KAFL with questions and for assistance with completing and submitting your AGIF (annual group information form).

With Prudential UL Plus being retired on 10/27, all UL Plus applications must be received by KAFL by 3:00 on 10/24/19.

Prudential EUL is launching on 10/28 in NY:

  • REPRICED TO BE COMPLIANT WITH PRINCIPAL BASED RESERVES (PBR), 2017 CSO MORTALITY TABLES, & CREDITING RATE CHANGE TO 4.15% – Minimal decreases and increases at key ages 45—75 (top 4 underwriting classes) for minimum premium to $1 at age 120
  • NEW LOW BAND For face amounts under $100,000.  Under $25,000 for conversions only.  New business will be available from $25,000 and higher
  • COMMISSIONABLE TARGET PREMIUMS (CTP) and NO-LAPSE GUARANTEES IMPROVED
  • REMOVAL OF LIMITED NO-LAPSE GUARANTEE – Now easier for a client to understand
  • UPDATED DISABILITY WAIVER BENEFIT TO WAIVER OF MONTHLY DEDUCTIONS (WMD)
  • ECV GUARANTEED EQUAL TO CURRENT (similar to FOUNDERS PLUS 2018)
  • TYPE C UPDATES (similar to FOUNDERS PLUS 2018)
      • Max age change from 70 to 75
      • Factor change from 1 to 2

    Contact your KAFL brokerage manager today with any questions.

Individual & Small Group plans and rates for 2020 and stand alone small group dental plans are now available on Blue on Demand. Updated Open Enrollment tools, including At-A-Glance Brochures and Product Guides are also available. Learn more and order open enrollment materials now.

Now available:

  • SimplyBlue Plus Small Group Medical Plans
  • NEW SimplyBlue Plus Dental Plans and Dental Blue Options Small Group Dental Plans
  • Individual Metal Plans

New Small Group Dental Plan!
Introducing a new stand alone dental plan designed specifically for Small Groups – SimplyBlue Plus Dental*! This new dental plan has a range of package options, including full family coverage and deductibles as low as $0. Visit to Blue on Demand to see the range of package options to meet budget needs.
*Name pending BCBS approval

Order Small Group Open Enrollment Materials Online

You can order your 2020 open enrollment materials now. You will need to indicate the quantity you want, as well as your shipping address for the following pieces:

 

Click Here for more information

Overview
Beginning January 1, 2020, any new life products issued must use the 2017 Commissioners Standard Ordinary (CSO) Table. To recognize changes in population, life expectancy, life insurance regulation requires an update of the standard mortality table used to calculate minimum cash values and death benefit requirements. This requirement applies to all life insurance carriers. Overall, the 2017 CSO products will have lower guideline premiums and/or lower 7-pay premiums, resulting in higher minimum death benefits and lower distributions.

Plan Ahead
As we approach the end of the year, you may want to offer your clients a 2001 CSO-based product, depending on their life insurance objectives. Please plan ahead – 2001 CSO products are unavailable after December 31, 2019, per regulatory requirements.

What to expect through the end of the year?
Carriers that are currently issuing life insurance products using the 2001 CSO mortality table, you can expect to see new product introductions throughout 2019 and into 2020 that meet the new regulatory requirements. Keep your eyes open for future notifications on carrier product retirements and new product introductions.

New York State Department of Financial Services (DFS) announced today, the updated NY Paid Family Leave (NY PFL) employee contribution rate for  upcoming 2020 calendar year.

The NY PFL Employee Rate will be increasing from 0.153% to 0.270%

Details of these updates are outlined below and will be effective January 1, 2020.

 

NY PFL Rate and Benefit Updates for 2020: 

NY PFL Employee Contribution Rate Change for 2020
Employee Rate 0.270% of employee’s weekly wages, up to annualized NYS Average Weekly Wage (NYSAWW-$1,401.17*)
Annualized NYS Average Weekly Wage Cap $72,860.84
Maximum Employee Annual Contribution $196.72
 

 

NY Paid Family Leave (PFL) Benefit Provisions
Claim Year 2020 2019
Effective Date January 1, 2019
(applicable to new leaves beginning 1/1/20 or later)
January 1, 2019
(applicable to all leaves initiated in 2019)
Maximum Length of Paid Leave 10 weeks 10 weeks
Payable Benefit % of an Employee’s Average Weekly Wage 60% 55%
Maximum Weekly Benefit

(Cap % of NY State Average Weekly Wage (NYSAWW*))

$840.70
(60% of NYSAWW of $1,401.17*)
$746.41
(55% of NYSAWW of $1,357.11*)

 

*The New York State Department of Labor annually publishes the NY State Average Weekly Wage by March 31 of each year, which will be the basis for determining the maximum benefit payable for the subsequent calendar year. https://labor.ny.gov/stats/avg_wkly_wage.shtm

Read more here: PFL Rate Decision – 2020

Life Insurance Product Portfolio Update

Effective September 27, 2019, Brighthouse Financial® will close the following products to new sales:

  • Brighthouse Premier Accumulator Universal Life (PAUL)
  • Brighthouse Guaranteed Level Term (GLT)
Why is Brighthouse Financial closing these products?

With the adoption of the 2017 Commissioners Standard and Ordinary (CSO) Mortality Table and the regulatory requirement that any product available for sale beginning January 1, 2020, comply with the 2017 CSO Table, insurance companies are updating or closing older products. In evaluating our life product portfolio, we have opted to close rather than update these products.

In contrast, Brighthouse SmartCare® and other life products that Brighthouse Financial will bring to market will comply with the 2017 CSO Table. This is consistent with our strategy to reestablish a competitive presence in the U.S. life insurance market and build upon our foundation of experience in the development of protection products.

Key transition dates for sunsetting products are as follows:

  • August 27, 2019
    • Last day to submit Quick Quotes and Preliminary Applications
  • September 24, 2019
    • Paper applications with cash must be to KAFL – no exceptions
  • September 25, 2019
    • Paper applications without cash must be at KAFL  – no exceptions
  • September 27, 2019
    • Tele-applications must be completed
    • The last day PAUL and GLT illustrations will be available
  • November 27, 2019
    • Pending cases must be paid and issued

Brighthouse Financial Life Insurance Product Portfolio:
The following Brighthouse Financial products will continue to be available:1

  • Brighthouse SmartCare® Indexed Universal Life
  • Brighthouse Conversion Whole Life
  • Brighthouse One Year Term

 

1All products may not be available in all jurisdictions or firms. State variations may apply.

Life insurance products are issued by Brighthouse Life Insurance Company and, in New York only, by Brighthouse Life Insurance Company of NY (“Brighthouse Financial”). Brighthouse Financial® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates

For Financial Professional Use Only. Not For Public Distribution.

 

For many people, life insurance doesn’t cross their radar until they’ve reached their 30s. But I bought my life insurance policy four years ago — at the ripe old age of 25.

And I’ve never regretted the decision.

In fact, if I had it to do over again I would have taken out my policy sooner. Here are the factors that led me to take out a life insurance policy at age 25 and why I’m glad I did.

1. I had just become a dad

When my wife gave birth to our first son in March of 2015, everything changed. I suddenly had this great sense of responsibility. And I wanted to make sure that this bundle of joy I was holding in my arms would always be taken care of.

Additionally, my wife wanted to stay home with our son for his first few years of life, so I knew that my job would be our only household income for the foreseeable future. This made the need to take out a life insurance policy even more urgent in case anything happened to me.

My life insurance policy went into effect in July of 2015. That meant my wife and son were unprotected for three months after he was born, and my stress level was pretty intense during that period. Looking back, I wish I would have taken care of my life insurance before my son’s birth.

2. My wife and I had recently bought a home.

In May of 2014, my wife and I bought our first home.

Up until that point, we hadn’t taken on any debt in our marriage. Both of our cars were paid for and neither of us had student loans. But now that we had a joint debt, I began thinking a lot more about the need for life insurance.

If I die before my wife, I don’t want her to struggle to make our mortgage payment. She’ll have enough stress without having to worry about losing our home.

Having life insurance gives me peace of mind that housing won’t be a concern for my wife and two boys. And that helps me sleep better at night.

3. I wanted to lock in a low rate.

Once I knew that I needed to buy life insurance, my mentality was, “Why wait?”

I knew that term life insurance can be incredibly cheap when you’re in your early twenties. And I also knew that procrastinating would only cause my monthly premiums to rise.

So I chose to bite the bullet and try to get coverage as soon as possible. I wanted to lock in that 25-year-old rate while I still could.

How I chose my life insurance policy

My first step in picking out my life insurance policy was deciding how much I needed.

A good rule of thumb is to take out a policy that’s 10-12 times your annual income. Based on my income at that time, a $500,000 policy was the right fit.

Using a comparison shopping site

To shop for my life insurance policy, I used a comparison site calledQuotacy. Like Policygenius, Quotacy is a comparison site that will show you quotes from multiple insurance companies at once.

Once I filled out my personal information, Quotacy connected me with my own personal agent named Jason. Every step of the way, from my initial quote, to my health exam, to the signing of the policy, Jason was available and helpful.

With Jason’s help, I was able to lock in a $500,000 policy withAmerican General Life Insurance for a monthly premium of $20.91. Yes, that’s a killer rate. And it shows how much you could potentially save by buying life insurance when you’re young.

Making adjustments

Life insurance needs can change over time. For instance, while $500,000 was the right size policy for me at age 25, it looks a little lean now.

So this year, I plan to either increase the benefit on my current policy or shop for a new policy altogether.

My situation isn’t all that unusual. For most of us, our lives are changing on a constant basis. After a few years, your life insurance may no longer fit your current financial situation. That’s why it’s a good idea to reevaluate your life insurance policy every few years to make sure that you’re still adequately covered.

The bottom line

Not everyone needs life insurance. You could be well into your 30s or 40s and have no need for life insurance if you’re single and have no debt.

But if you have joint debts with your spouse or you have a child who depends on your income, you probably need life insurance … no matter how young or old you may be.

 

 

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

https://www.businessinsider.com/i-bought-a-500000-life-insurance-policy-at-age-25-2019-8

The New York State Department of Financial Services released the approved 2020 rates for the individual and small group market. The requested weighted average increase for the individual market reflected an increase of 9.2%. The Department approved a weighted average increase of 6.8%. The requested weighted avberatge increase for the small group market reflected an increase of 12.2%. The Department approved a weighed average increase of 7.9%.

For the complete announcement on the DFS Website click here.

Key person DI is corporate income protection insurance designated to pump much-needed capital back into a business after the loss of key personnel.  Assigned at the policy owner’s discretion, the benefits are commonly used for recruiter costs to find replacement employees, to reimburse losses due to decreased productivity, to fund travel expenses for new account managers meeting with clients to reinforce existing customer relations as well as to supplement overtime payments for existing staff covering the inevitable additional workload when a firm loses an integral employee. Explore problems faced by companies without this and what solutions are available.

Under the Affordable Care Act, the Internal Revenue Service requires health insurers to request missing subscriber and dependent Social Security numbers from their members. In August, we will send Social Security number request letters to individuals who had health coverage at any time in 2019.

 

Learn More!

With changes coming to our Broker and Employer web portals, we’ve created a preview comparison of a few of the web site pages to give you a sense of what’s coming. As noted in past communication, you’ll need to create a NEW PASSWORD the first time you log in. No change is needed now; you’ll be prompted to make the change when the time comes.

 

Click here to Preview

Here’s your guide to being compliant with Reg 187:

  • Complete Reg 187 training before 8/1/2019 (we suggest RegEd as the course is free)
  • Send training certificate to licensing@kafl.com
  • Carriers will be changing their suitability forms so please verify with KAFL that you have the most current version of the paperwork

Even if you completed carrier specific annuity product training in the past, this new training is required to sell an annuity in New York after 8/1/19!

 

New York Regulation 187 – Suitability and Best Interests in Life Insurance and Annuity Transactions

The New York Department of Financial Services regulates trade practices in the business of insurance to prevent acts or practices that are unfair or deceptive. The Insurance Law establishes standards of conduct for insurance producers, including that producers must act in a competent and trustworthy manner. New York’s Suitability and Best Interests in Life Insurance and Annuity Transactions (Regulation 187) becomes effective August 1, 2019 (for annuity contracts) and February 1, 2020 (for life insurance policies).

The purpose of Regulation 187 is to clarify the duties and obligations of both insurers and insurance producers. For producers, it provides clarification regarding their duties and obligations when making recommendations to consumers with respect to policies delivered or issued for delivery in New York. This helps ensure a transaction is in the best interest of the consumer and appropriately addresses the insurance needs and financial objectives of the consumer at the time of the transaction. The best interest standard requires a producer to adhere to a standard of conduct to be enforced by the superintendent. Please note, under New York Regulation 187, the term “policy” is defined to include life insurance policies and annuity contracts.

All producer requirements are applicable to every producer who materially participated in the making of a recommendation and received compensation, even if they had no contact with the consumer.

Regulation 187 defines a recommendation as one or more statements or acts by a producer to a consumer that:

  1. reasonably may be interpreted by a consumer to be advice and that results in a consumer entering into or refraining from entering into a transaction in accordance with that advice; or
  2. is intended by the producer to result in a consumer entering into or refraining from entering into a transaction.

Note: A recommendation does not include:

  • Providing general factual information to consumers. This may include advertisements, marketing materials, general educational information regarding insurance or other financial products, and general administrative services to the consumer.
  • A recommendation also does not include a consumer’s use of an interactive tool that solely provides a prospective consumer with:
    • the means to estimate insurance, future income, or other financial needs;
    • compare different types of products; or
    • refer the consumer to a producer,

provided the interactive tool is not used by a producer to satisfy any requirements of NY Regulation 187.

Under Regulation 187, transactions are grouped into two basic designations:

  • A “sales transaction” is defined as a transaction based on a producer’s recommendation resulting in the purchase or issuance of a policy, a replacement, conversion or modification or election of a contractual provision with respect to an in-force policy and generating new sales compensation*; and
  • An “inforce transaction” is defined as a transaction, based on a producer’s recommendation, resulting in modification or election of a contractual provision with respect to an in-force policy that does not generate new sales compensation*.

*New sales compensation does not include compensation provided to a producer when, after the initial premium or deposit under a policy, the consumer pays further premiums or deposits pursuant to the policy.

Any recommendation made by an insurance producer, whether in association with a sales transaction or an inforce transaction, must be in the best interest of the consumer taking only the interest of the consumer into consideration; recommendations of sales transactions must also be based on evaluation of suitability information. The amount or receipt of incentive is not to influence the insurance producer’s recommendation. An insurance producer shall not make a recommendation to a consumer to enter into any transaction about which the producer has inadequate knowledge; as such, if you have questions about a transaction on a consumer’s policy, please contact the Company for additional information.

A producer shall not dissuade, or attempt to dissuade, a consumer from:

  1. truthfully responding to an insurer’s request for confirmation of suitability information;
  2. filing a complaint with the superintendent; or
  3. cooperating with the investigation of a complaint.

Source information: Compliance Bulletin 6/19/19 VOYA

For agent/registered representative use only. Not for public distribution.

Individuals will be able to contribute $3,550 to HSA next year, and families will be able to contribute $7,100. Here are three ways brokers can help employers improve HSA implementation and increase use.

Continue Reading

After a federal district court struck down the Trump administration’s 2018 AHP expansion, the Department of Labor has appealed the decision and announced in April it will not pursue penalties from employers for “good faith” violations.

Continue Reading

On May 13, 2019, an application was submitted requesting 2020 premium rate changes in accordance with New York state prior approval law. This rate application applies to Community Rated Individual and Small Group products.

The following products are included in this 2020 rate filing:

  • Direct Pay Metal Plans and Base (catastrophic)
  • Bassett Preferred
  • CNY Preferred
  • Healthy NY EPO
  • SimplyBlue Plus
  • Excellus BCBS HMO

Employer Group Communication

Initial notification letters will be mailed to community-rated employer groups and direct pay members enrolled in the products listed above. The letter will include our requested rate percentage changes.

Broker Communication

You will receive an encrypted e-mail notification with copies of the initial notification letters being sent to your groups starting May 20.  The encrypted emails will expire if not read within the specified timeframe as indicated in your email notification.

Your groups will receive an annual rate notification with the actual, approved rates 60 days prior to their renewal date. The annual rate notices will be available to Brokers on Information Connection.

Please note: encrypted files expire after a specified time from the send date. You will not be able to access the information in the file if the email isn’t opened and read within that time. You will also be prompted to create a password associated with your email address to access the encrypted file.

Resources:

 

Carrier Link with additional information.

Lock in May Rates by 5/31 before they change.

American National Rate Sheet

New York Rate Sheet

Highlights:
(See Rate Sheets for Details)

Annuity Rates
(including NY)

  • Rates decrease for all products.
  • See rate sheets for details.

Signature IUL  &  Signature Plus IUL

  • Various cap and rate changes
  • See rate sheets for details.

Minimum Guaranteed Interest Rate (MGIR)

  • No changes!

Deadlines
App, Exchanges, Cash with App, & Wire Transfer Deadlines

  • Signed & Dated: 5/31
  • Received: 6/4 by 3:00pm in the KAFL Office
  • Exchanges: Monies must be received within 60 days

General Rate Lock Overview
New York Rate Lock Overview

Top
In 6 months I'm at over 25 cases sold with 6 more in the pipeline... See how he did it. View video. -
-
Asset Protector – the new generation of life insurance – provides a unique set of living benefits not currently available anywhere else. Watch video
»

At 1:00 what optionality can mean to clients

»

At 1:16 3 unique presentation features you can use

»

At 2:53 how clients can access more than they paid in premiums

Access consumer approved versions of the videos for lead generation
(less than 1 min) and for use during client meetings (3 min).
Now is a great time to start selling Asset Protector.
logo Contact your KAFL Brokerage Manage today!
(800) 272-6488
www.kafl.com
or visit RetireStronger.com.
Policies issued by American General Life Insurance Company (AGL). Form Numbers 13972, 13600, ICC13-13600, 13460, ICC13-13460. Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company.

IMPORTANT NOTICE: Keep in mind that, as with all contests, any recommendation for the purchase, sale or exchange of any product must be suitable to the client. Financial professionals must make a reasonable effort to obtain information concerning the client’s financial status, tax status, investment objectives and such other information considered to be reasonable in making recommendations to the client.

AGLC108227-BGA ©2017 AIG. All rights reserved.

For Financial Professional Use Only – Not For Public Distribution

bottom bar

Jump start more life ins conversations with the right message.
Show clients an innovative way to use life insurance to protect their retirement assets with a
training program on RetireStronger.com called “Making the Sale”. With this program, you can
make the sale by accessing a step-by-step guide to:
View videos, infographics and customizable emails on fresh topics
1) Learn more about your clients’ needs
2) Discover innovative solutions to fill
those needs
3) Leverage tools to reach clients
and prospects
Check out videos, infographics and
customizable emails on hot topics. Turn this
knowledge into lead generation activities
that result in valuable meetings with clients.
RetireStronger.com/MakingTheSale
Hear insider tips from a successful producer. View videos
brand name Contact your KAFL Brokerage Manager today!
(800) 272-6488
www.kafl.com
or visit RetireStronger.com.
Policies issued by: American General Life Insurance Company (AGL), Policy Form Numbers 13460, ICC13-13460,
Rider Form Number 13600. Issuing company AGL is responsible for financial obligations of insurance products and is
a member of American International Group, Inc. (AIG). AGL does not solicit business in the state of New York. Products
may not be available in all states and product features may vary by state. Guarantees are backed by the claims-paying
ability of the issuing insurance company.
For Financial Professional Use Only – Not For Public Distribution

AGLC108182-BGA ©2017. All rights reserved.

50% of Households Risk Their Standard
of Living Declining During Retirement
Will your clients have enough money for retirement?
photo

Did you know?

More Americans are spending 20+ years in retirement.¹
61% of Americans surveyed said they are more scared
of outliving their retirement than they are of death.²
Asset Protector makes it possible for consumers to use their life insurance
benefits while they are still living to help them meet life’s challenges. That’s life
insurance you don’t have to die to use.
We’ve prepared an entire suite of producer and consumer materials, plus a website to help you identify who could benefit from this innovative life insurance, how to address clients’ needs, and
how to position this product line. Your clients are living longer, American General can
help them retire stronger. Find out more:
web RetireStronger.com paper Producer Materials
Let's talk. Contact your KAFL Brokerage Manager today!
800-272-6488
www.kafl.com
or visit RetireStronger.com.
Policies issued by: American General Life Insurance Company (AGL). Issuing company AGL is responsible
for financial obligations of insurance products and is a member of American International Group, Inc. (AIG).
AGL does not solicit business in the state of New York. Products may not be available in all states and product
features may vary by state. Guarantees are backed by the claims-paying ability of the issuing insurance company.

1. Social Security Administration Data
2. The 2Q11 SunAmerica Retirement Reset(SM) Study conducted by Harris Interactive surveyed a national
sample of people age 55+.

For Financial Professional Use Only – Not For Public Distribution

AGLC107628-BGA ©2017. All rights reserved.

Principal

 

Protect the asset you rely on most

 

 

Your income provides for so much –  your home, car, activities and much more. With something that provides so much, it just makes sense to protect it.

Individual Disability Income (DI) insurance is there for you so you can continue to pay everyday expenses – even if you’re too sick or hurt to work.

How much does it cost?

It may sound expensive, but it doesn’t have to be. Together we can review your needs and budget to find what works best for you.

 

 

Using DI is typically just   1-3% of what you earn.

 

 

That means DI is just as affordable as lunch every day or a monthly smartphone bill.

 

Let’s connect. I’ll contact you to discuss.

KAFL Insurance Resources
(800) 272 -6488
www.kafl.com

 


 

Terms of Use  |  Disclosures  |  Privacy  |  Security  |  Report Fraud

Disability insurance has limitations and exclusions. For costs and coverage details, contact your Principal financial representative. Not approved for use in New Mexico.

Disability insurance from Principal® is issued by Principal Life Insurance Company, Des Moines, Iowa 50392, www.principal.com.

© 2018 Principal Financial Services, Inc., Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc, a member of the Principal Financial Group.

If you do not want to receive any further marketing emails, let us know by replying and we’ll remove you from our marketing email list.

DI8526-04 | 10/2018

 


Your income provides for so much –  your home, car, activities and much more. With something that provides so much, it just makes sense to protect it.

Individual Disability Income (DI) insurance is there for you so you can continue to pay everyday expenses – even if you’re too sick or hurt to work.

How much does it cost?

It may sound expensive, but it doesn’t have to be. Together we can review your needs and budget to find what works best for you.
Using DI is typically just   1-3% of what you earn. That means DI is just as affordable as lunch every day or a monthly smartphone bill.

Contact your KAFL Brokerage Manager today to learn more!

Blog for Retirement Protection – Offer Life Insurance You Don’t Have to Die to Use:  An “Asset Protector” Package Enhances Flexibility

by Mark Peterson
Executive Vice President and Chief Distribution Officer
Life and A&H, AIG Financial Distributors

For the first time in the life insurance industry, you’re able to tell clients something they’ve never heard before: “If you don’t die prematurely, you may be able to spend your entire death benefit on virtually anything you want.”

 Because of this sea change in the way life insurance death benefits can be accessed, clients have the opportunity to view their life insurance policy more like an asset than an expense. That’s the concept that’s revolutionizing the life insurance industry. An innovative asset protector package has the potential to help increase clients’ financial security during retirement.

 Chronic Illness Protection

Keep in mind that for many people, the biggest risk to their assets during retirement is a significant illness that would require expensive care. This could result from a physical problem, such as a debilitating stroke, or from a cognitive impairment, such as Alzheimer’s Disease.

 To help protect assets from the devastating financial impact of these types of conditions, clients may be able to leverage a chronic illness rider that’s included or available with many permanent life insurance policies. If clients meet the rider’s criteria, they can access their life insurance policy’s death benefit – while they’re still alive – to pay for their health care or other expenses and help preserve their retirement assets for their surviving spouse. The access to cash value in the policy is available through an acceleration of the death benefit, although with a corresponding reduction in the benefit.

If clients live to age 85 or beyond and don’t suffer a chronic illness or a cognitive impairment, their financial concerns may change again. They may be more concerned about having sufficient income for the rest of their retirement. The solution is longevity insurance.

Longevity Protection

A longevity rider on a life insurance policy provides that when a client reaches the age specified in the contract (for example, age 85), he or she can begin receiving a percentage of the death benefit (for example, 10 percent) each year for a specified number of years, such as 10.

 With a $250,000 policy, that could mean access to an additional $25,000 per year. With a $1 million death benefit, the available sum may be $100,000 per year for 10 years. As with a chronic illness rider, the access to cash value in the policy is through an acceleration of the death benefit that reduces the death benefit accordingly. But imagine what having “life insurance you don’t have to die to use” could do for clients’ financial security when their retirement portfolio may be straining to generate the retirement income they need.

 This hypothetical example is for illustrative purposes only. Not an actual case and intended solely to depict how the product features might work. It does not reflect the value of any specific Policy. Restrictions and limitations apply.

 A Multipurpose Solution

Ultimately, whether clients are most concerned about dying too soon, living too long or getting sick along the way, an asset protector package – comprised of a life insurance policy, a chronic illness rider and a longevity rider – is designed to offer the flexibility to help clients achieve their financial goals.

For more information about asset protector packages, contact your KAFL Brokerage Manager today!

(800) 272-6488
KAFL Brokerage Manager Team Information
www.kafl.com

 

Policies issued by American General Life Insurance Company (AGL) except in New York, where issued by The United States Life Insurance Company in the City of New York (US Life). Issuing companies AGL and US Life are responsible for financial obligations of insurance products and are members of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. Products may not be available in all states and product features may vary by state. Please refer to your contract.

 

What do you need to start the right conversation?

The right information can help you start the conversation.
Use the carrier resources below to get you started for those conversations around: Long-Term Care, Retirement, Business Planning, Life Insurance, and MORE.

Networking through the use of a simple
invitation to “meet for a cup of coffee”
is a great way to prospect for new clients.

Here’s how you can use social media,
and an invitation to “talk over coffee”
as a way to build your client base.

Click here to learn more!

New Wealth + Health Microsite!

What can you find in here?

  • Ways To Work With Different Generations
  • Talking Points About Wealth + Health
  • Social Security
    • Need for Life Insurance
    • Strategies
    • Quick Reference Guide
    • Social Security at Every Age
  • Prospecting Tools
  • Conversation Starters
  • And many other resources

Save www.aimcorgroup.com/wealthhealth/ to your favorites for easy access!!!

Effective immediately all William Penn and Banner policies will be eDelivered. Please see below for exceptions.

Advantages of Going Green

  • FAST → Cycle time is reduced by more than 2 weeks.
  • MONEY → EFT commissions are processed within 24 hours of the policy activation.
  • COMPLETE → Collect all documents necessary to place the case (including payment) in good order.

Impressive Stats

  • 22% of eDelivered policies are signed within one day of receipt
  • More than 125,000 policies have been signed electronically
  • About 47% of new policies are eDelivered
  • Go Green! eDelivery has saved over 6.6 million sheets of paper

Exceptions for eDelivery

  • If the policy has a different owner or payor than the insured
  • If it is a Reg 60 case
  • If there is a check on the file so there is money in suspense, their system will not be able to generate an E-Policy.
  • eDelivery authorizations may be requested for paper applications
  • Are renewal commissions yours?  KAFL does not keep any of your commissions, first year or renewal.
  • Who is your contract with?  We contract our agents directly with the carrier for the fastest commission turnaround time possible.
  • Does your brokerage personally produce?  No one at KAFL personally produces.  We are here strictly to assist you in building your Medicare business in whatever way you want.
  • Will you receive full compensation if you participate in lead programs?  Yes, KAFL participates in lead programs and your commissions would never be held to cover the cost.

Any questions, you can reach out to Jeanine Polito at jeanine@kafl.com or ext. 101.

 

Penn Mutual New York State Life Insurance Product Portfolio Changes Effective April 1, 2018

Acting in the long-term best interests of all of its policyholders, Penn Mutual has made the business decision to no longer accept applications for the following life insurance products from New York state effective

April 1, 2018:

• Accumulation Builder Advantage Indexed
• Universal Life
• Guaranteed Protection Universal Life
• Survivorship Plus Indexed Universal Life
• Protection Guard Universal Life

This decision is aligned with our 2017 CSO product portfolio strategy in New York state.

Formal applications In Good Order for these products must be received in the Home Office no later than Friday, March 30, 2018. The policies that result from these applications must be issued and paid for by Thursday, May 31, 2018.

All applications will need to be at KAFL by March 29, 2018 to ensure we have enough time to meet their deadline of March 30, 2018.

In accordance with existing policy terms, advisors may continue to service all inforce policies in New York.

Products Still Available in New York

The following life insurance products will continue to be available in New York state:

· Guaranteed Choice Whole Life
· Diversified Growth Variable Universal Life
· Guaranteed Term 10-15-20
· One Year Term

Please note, there will be no change in the annuity products available in New York state.

Questions? Please contact your KAFL Brokerage Manager

LTC AND LIVING BENEFITS

Because more are living longer, many life insurance companies have found traditional long-term care (LTC) policies are not for everyone. Life insurance can now be used as “living benefits” that help pay expenses when a LTC or chronic illness occurs. There’s a number of different types of products, and by using our updated Living Benefits microsite, you can ensure you have the proper tools you need to address your clients.

PROSPECTING – APPROVED CLIENT APPROACH LETTERS AND EMAILS

ADVISOR TRAINING & EDUCATION

 

STARTING THE CONVERSATION WITH YOUR CLIENTS

PLANNING STRATEGIES & CONCEPTS

RESOURCES, TOOLS & FACT FINDERS

INSURANCE COMPANY RESOURCES

A Critical Illness Rider is NOT a Chronic Illness Rider

At John Hancock, we recently introduced a new, innovative Critical Illness Benefit rider. As you discuss critical illness coverage with your clients, make sure you understand the key differences between Critical Illness and Chronic Illness riders.

 

Critical Illness Riders

  • Triggered by a catastrophic health event (e.g., heart attack, cancer, stroke, etc.)
  • Protects clients during working years

Used to pay for whatever clients chooses, e.g., health-care costs, day-to-day expenses, and continued financial planning

 

Chronic Illness (or Long-Term Care) Riders

  • Triggered by the loss of cognitive function or inability to perform two of six ADLs (activities of daily living)
  • Protects clients during retirement years

Helps to pay for care costs associated with living a long life, e.g., home health care, assisted-living facility, or nursing home care

 

Learn more about our new Critical Illness Benefit rider

KAFL, Inc. is excited to announce our latest product offering for your Individual and Medicare clients.

Introducing Bright Idea Dental and Vision. Give your clients access to one of the largest dental and vision networks in the country. Dental implant & denture coverage is included. There are no age limits for participants, and acceptance is guaranteed!

Products are sold exclusively through KAFL. To get started, please contact the Employee Benefits Department at KAFL today!

Bright Idea Dental Brochure

Bright Idea Dental/Vision Flyer

New Microsite Release – COMING SOON

The new and improved AIMCOR LIVING BENEFITS microsite release is just around the corner. Here’s a sneak peek of some of the resources you’ll be able to access in one centralized location.

Think Differently w/ These Sales Ideas

Prospecting – Approved Client Material

Resources, Tools & Fact Finders

 

 

 

 

 

 

 

 

 

Research shows that oral health and overall health are closely related. So, when you keep your teeth healthy,
you are also keeping your body healthy. Our dental plans offer coverage options for preventive, diagnostic,
basic, and major restorative services through FCL Dental’s Network of over 600,000 locations.

Dental At A Glance
• 100% coverage on plans for many preventive services like cleanings, X-rays, and oral exams.1
• Over 261,000 locations Nationwide2. Visit www.fcldental.com
• No age restrictions, guaranteed issue ages 18 and up.
• Guaranteed Acceptance

Contact our Employee Benefits department for more information.

 

BrightIdea Plans Catalog

BrightIdea BiFold Brochure

One of the best ways to generate income protection sales is to raise awareness. Clients can’t ask for help if they don’t even know they have a need for it in the first place.

1 Build your digital presence with social media and emails with this campaign.
2 Share our income protection calculator using this email. In just minutes, this calculator highlights the personalized need for income protection and provides a cost estimate.
3 Keep the sales conversation simple and visual. Share this infographic to help tell the income protection story.

For January 1st, 2018 effective dates, all new business group and individual health applications must be received by KAFL by the following dates:

Carrier

Due Date

Aetna December 10th
BlueCross BlueShield WNY December 15th
Excellus December 15th
Independent Health December 15th
MVP December 15th
Univera December 15th
United/Oxford December 31st

New York State has extended the open enrollment season for individuals until March 1st, 2018.  Application deadlines are as follows:*

Effective Date Due Date
February 1, 2018 January 15th
March 1, 2018 January 31st

*Individuals who do not enroll by January 31st are considered late entrants and will require a qualifying event in order to receive a special enrollment period.  Examples of qualifying events are: marriage/domestic partnership, newborn child, newborn adoption/proposed newborn adoption, non-newborn adoption/proposed adoption/legal guardianship, subscriber deceased, involuntary loss of coverage, involuntary loss of coverage for a dependent child, permanent relocation.

American National’s new Expert electronic tools will replace iPipeline’s IGO applications and the LPES illustration system.
ExpertApp, will replace iPipeline’s iGO applications and ExpertIllustrator will replace LPES. The process of phasing out iGO and LPES for all products has begun.
Important dates:
9/28/2017: Last day for new cases to be started through iGO
12/28/2017: Last day to submit pending cases through iGO and last day to transfer any LPES illustrations to ExpertIllustrator.

SmartAction was founded as an artificial intelligence (AI) research company and has since evolved into the leading provider of AI-powered customer self-service solutions. It’s come to Legal & General America.

Customers should never miss a bill. 
Pay by phone and text reminders are here!
We’re elated to provide easy to use, conversational help for customers who call Legal & General America for payment service on their policies. This new AI service will bring great experiences to customers, saving them time and energy in completing tasks and keeping Legal & General America at the forefront of innovation and service quality. The service is powered by SmartAction’s advanced voice recognition system, like Siri or Alexa, but for the call center.  ​

So what does that mean for our customers?

We’ve implemented a speech-driven payment system, powered by SmartAction, through which customers can pay premiums using our existing 800.638.8428 toll-free number for Banner and 800.346.4773 for William Penn.  

How does it work?

  • It doesn’t matter whether the customer has an online account with us or not. If he or she wants to pay by phone, it just takes a call to provide bank routing, bank account, and policy numbers. Only policy owners and authorized payors are allowed to make payments.
  • For added convenience, if the customer has provided this information by completing our online Profile, he or she is given the option to use the existing information when paying by phone.
  • At present, the service is for term and whole life only. Universal life will be added at a later date.

Phone prompts on the Legal & General America toll-free lines have changed and now include a “pay by phone” option.

There are more bells and whistles.

Customers can ask us to text them reminders to pay their bills! And they can pay by text!

  • The customer opts in for text messaging online and sets up a payment account if necessary.
  • If the bill hasn’t been paid, the text will be sent 5 days prior to the due date.
  • The customer has the option to pay the bill via text or simply use it as a reminder.

If the bill hasn’t been paid 15 days after the due date, another text is generated. The 30-day late payment offer is still sent by regular mail. All other paper correspondence remains in place.

SmartAction is at work now.

The pay-by-phone and text reminder services are available today. These services are available 24/7 in all states for both Banner and William Penn policy owners.

Reminder: For all 1/1/2017 policies, KAFL will no longer be paying out commissions on individual health insurance policies (any business submitted after 12/1/16 for a 1/1/17 effective date or later).  Any business you currently have in-force (dated prior to 12/1/16) will remain at the original compensation level until such time as that client decides to move to a different policy and it needs to be rewritten.

Transamerica remains committed to you and to the long term care insurance market. As such, it’s important that we modify our premium rates for new TransCare® III business to remain competitive within the marketplace. These rate changes will also maintain consistency in our pricing across our product portfolio.
Revised rates for new sales of TransCare III will become effective July 3, 2017. To receive old rates, applications must be received in good order by close of business June 30, 2017. Previously saved quotes on TransQuote® will no longer be available starting July 3, 2017.
This change applies to the following states: Alabama, Alaska, Arkansas, Colorado, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. We will inform you as approvals are received for the remaining states.
New application and disclosure packages will be required. To access the new packages, please visit www.taltc.com. Old versions of the application and disclosure packages will no longer be accepted after June 30, 2017.
Thank you for your business and your trust in Transamerica.
 
Brighthouse Premier Accumulator Universal Life New York Update
Effective May 22, 2017, Brighthouse Premier Accumulator Universal Life (PAUL) will be issued in New York by Brighthouse Life Insurance Company of NY. PAUL issued by Brighthouse Life Insurance Company of NY features: no surrender charges and a 4.00% current interest crediting rate.
Transition Rules
  • Applications for PAUL issued by Brighthouse Life Insurance Company of NY will be accepted beginning on May 22, 2017.
  • In good order applications for PAUL issued by Metropolitan Life Insurance Company must be received in the Home Office on or before May 22, 2017.
    • These cases must be issued and paid by the earlier of June 30, 2017 or actual legal separation. Cases that do not meet the issue and payment deadline will be closed.
  • Metropolitan Life Insurance Company policy owners will not be eligible to exchange to PAUL issued by Brighthouse Life Insurance Company of NY.
Term Conversion Update
  • Brighthouse Financial term policies issued in New York may be converted to PAUL issued by Brighthouse Life Insurance Company of NY. Conversions to Whole Life 2008 issued by Metropolitan Life Insurance Company will not be accepted after May 22, 2017.
  • Please note that term conversion product availability, as described here, will also apply when other contractual provisions, including group conversions, are exercised that require issuance of a new policy.
Illustrations and Forms Availability
  • Illustrations for PAUL issued by Brighthouse Life Insurance Company of NY will be available on May 22, 2017.
    • Illustrations for PAUL issued by Metropolitan Life Insurance Company can be run in the Home Office for pending cases that have satisfied the in good order application deadline.
  • Forms for PAUL issued by Brighthouse Life Insurance Company of NY are available at eforms.metlife.com/BrighthouseFinancial.

For more information, please contact your KAFL Broker Manager.

All Trendsetter® LB (Living Benefit) Term Life Insurance applications signed AFTER 5/5/2017 will be underwritten with the new living benefit underwriting rules.
Transition rules related to the receipt of the application relative to the product and rates still apply.
Trendsetter LB benefits are inherent to the product, therefore if we identify a condition or consideration that would warrant the removal of either the Chronic or Critical illness rider we will pivot to Trendsetter Super and offer that to the customer. In this scenario, the policy will be issued with an amendment for the change in plan.
Conditions or consideration for Living Benefits are as follows:
Any case rated over table 4 rates
Any case with a flat extra over $2.50 per thousand
Underwriter’s evaluation of medical history, which includes combinations of medical conditions may conclude a decline of the living benefits; some examples of conditions that are not eligible for living benefits coverage would be Parkinson’s, Multiple Sclerosis, some cancers, cancers treated with radiation and/or chemo therapy
For more information about the underwriting changes for the Trendsetter Series please contact your KAFL Broker Manager.
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