Discussing a client’s long-term health needs can be uncomfortable. Everyone wants to live an active and fulfilling lifestyle in retirement. But your health is unpredictable. Assisted living and home health care are expensive realities of aging.

Long-term care is an unavoidable and highly important segment of retirement planning.

Take advantage of Long-Term Care Awareness Month, a marketing campaign held annually in November, to get your clients thinking about their long-term care needs.

Nearly 70 percent of people who live to age 65 will need some type of long-term care in their lifetimes, according to Forbes.

And this need can come with quite the steep price tag. The Genworth 2017 Cost of Care Study found:

• Nursing home care in the U.S. can cost a person anywhere from $85,000 to over $97,000 a year.
• An assisted living facility can set a person back by about $45,000 a year.
• Home health care can range from nearly $48,000 to over $49,000 annually.

Here’s what you should know about long-term care annuities and how they can best be used to help your clients develop a comprehensive retirement plan.

How Long-Term Care Annuities Work

A long-term care annuity is essentially a pool of money set aside to pay for long-term care expenses. It can be used to cover the expenses associated with home health care, assisted living or nursing home care.

It is sometimes purchased as a rider — designed to protect your client’s principal or investment and income or fixed payments — on a deferred annuity.

Long-term care funds can be accessed immediately. But the cash portion of a deferred annuity is reserved for a future date that is determined at the time the annuity is set up.

A deferred annuity is available to people up to age 85. Individuals wanting this type of annuity will need to meet certain health criteria.

Like other annuities, a deferred annuity provides a regular monthly income for a specified period of time in exchange for a lump-sum premium payment.

Clients who take advantage of this benefit will have a predictable stream of income in retirement.

Deferred annuities with long-term care benefits are beneficial to people who:

• Do not qualify for long-term care insurance or life insurance
• Cannot afford long-term care insurance with limited or restricted benefits
• Do not need immediate income payments
• Have a lump sum of cash to invest for a number of years

 What Is a Hybrid Benefit Annuity?

A hybrid benefit annuity is one that combines long-term care coverage with a fixed-income annuity into one convenient product.

Your clients put a chunk of money into the product and then choose the amount of long-term care coverage they want and how long they want it to last.

This type of annuity may be appropriate for a person who is unsure of whether long-term care benefits will be needed or in what amount.

If the long-term care benefits are not used, a portion of them can still be paid out as an annuity payment for use towards other retirement needs.

Tax-Free Incentive

The IRS allows deferred annuity holders to use money from their policy to pay for long-term care while foregoing federal taxes.

Typically, annuities grow money tax-free. But when your client’s cash in, they also need to pay out — in taxes.

But in 2010, the IRS nixed this requirement when it comes to covering long-term care expenses.

A tax break included in the Pension Protection Act of 2006 was designed to help promote sales of hybrid benefit annuities.

Using the IRS 1035 exchange rule, consumers can move deferred gains from their existing non-qualified policy — such as another annuity or whole or universal life insurance policy – to a hybrid policy without the imposition of a tax payout.

Additionally, proceeds from these combined annuities can be used tax-free to pay for qualified long-term care coverage and premiums.

Your clients will eventually pay taxes on the annuity’s remaining gains when they cash out. But the amount owed will be reduced — possibly eliminated — depending on the amount of money transferred for long-term care premiums over time.

Other Key Points Worth Talking About

Before having your client sign on the dotted line, make sure to have a conversation with them about all the benefits — as well as the drawbacks — of a long-term care annuity.

Having a long-term care annuity — or deferred annuity — assumes you will live long enough to enjoy the payout. Unfortunately, this is not always the case, as life expectancy is unpredictable.

But, if a person does not use their long-term care portion of an annuity, it can be passed on to their heirs. So the money is never actually lost.

Also, long-term care coverage may be an alternative for people who do not qualify for long-term insurance or life insurance. This is because the underwriting process required for a long-term care annuity is often less stringent than for other long-term-care policies.

But there are some downsides. First, the annuity may not be enough to pay for the entirety of a person’s long-term care expenses. Long-term care is a difficult thing to predict, and the amount that is put aside may not be the amount that is ultimately needed.

If your client is independently wealthy or has other funds available to cover the added or unexpected expenses, then this downside may not apply.

But if they are depending on their long-term care annuity as their sole source of payment to cover long-term care expenses, then shorting on their policy benefits can present a real problem.

An annuity can potentially affect a person’s eligibility for Medicaid. So, if a proper amount of money is not available via their long-term care coverage, they may be out of luck.

Long-term care annuities are valuable tools to cover an often inevitable and expensive part of life. But it’s important to tailor the long-term care annuity to each client based on their individual needs, goals and overall retirement income plan to best maximize their benefit.

My wife and I had to deal with the loss of both her parents recently. We were fortunate that her parents had their estate fairly well organized.  But after going through all of the issues that needed addressing – proper care for her mother during her final years, selling their home, disposing of property, dealing with the lawyers and CPAs, etc.; I was reminded of some basic tenets we often talk about in the insurance business, basic principles we need to apply to our clients and to our own families!

Get long term care coverage

Several years ago my in-laws sold their home and moved into a retirement apartment which offered basic levels of care. After my mother in-law’s Alzheimer’s progressed, she had to move into a specialized facility.  Between the two facilities, the cost was nearly $12,000 a month!  I knew my father-in-law was fretful about running out of money; he had no long term care coverage.

Most consumers do not have stand-alone long term care insurance coverage; traditionally it has been very expensive and offered little choice of carriers.  Fortunately, today most life insurance, and some annuity products, offer accelerated benefits to help cover long term care costs.  If you have not looked into this, look into it now.  Most older clients are more worried about living too long than dying young.  We can help them cover both scenarios with the same product.

Have wills including medical directives

It is very important that everyone’s wishes are known for handling the estate and their care.  It is an uncomfortable discussion, but one which should not be avoided.   Not having a directive done makes a stressful time much worse.  Encourage your clients to have the conversation with their families so they know what their loved ones’ last wishes are, and have it formally documented.

Check beneficiary designations

Regarding my in-laws’ coverage, one policy belonging to my father-in-law only listed his then-deceased spouse as beneficiary; there were no contingent beneficiaries.  Consequently, the money had to be paid into the estate instead of to beneficiaries.

Be as prepared as possible

If you become the executor or trustee of a family member’s estate, learn where important papers such as bank statements, wills, insurance policies, bills etc. are kept.  The more you know up front, the less stress when you have to step in.

These are highlights of the myriad of tasks that must be addressed when we lose a parent. And it reminds us of the importance of insurance in our plans.  Long-term care coverage provides funds for elder care, while life insurance ensures proceeds for final expenses and creating a legacy for beneficiaries will be available.  We here at Davis Life and Annuity have been helping agents protect their clients for over 35 years. Please call us at 800-747-5612 and we can help prepare for the future.

#1. Whether you value them or not the consumer now considers your Website, your Facebook business page and your LinkedIn account like your modern-day office. Take pride in them, make sure they give the first impression worthy of your operation.

Tip: At the bare minimum double check your contact information on these pages. You would be surprised how many times I call a phone # I see on a client’s Facebook business page and its wrong. Imagine if I was referred to you, I Googled you, and your Facebook page pops up as a search result, I go to it and decide to call you then the phone # doesn’t work. I am not doing a research project to get that phone #, I am calling the second guy on my referral list.

#2. Your website now must be 100% mobile responsive. This means if someone views your site on a smartphone that the site reformats and resizes to fit on the phone.

Tip: 47% of all internet views come from smartphones now. If your site doesn’t resize and you need to use your fingers to manually resize it, then you need a new website immediately.

3. Your social media presence needs to look active. Check out your Facebook business wall. When was the last post? I hope it wasn’t March of 2017! Imagine if I was a consumer looking at that, to me that projects a company that “starts something but doesn’t finish it.”

Tip: Start posting simple articles and tips relevant to what you specialize in. Just post one or two a week. It may not get you a million leads, but it will look professional and if a potential referral checks it out, they will feel impressed with what they see, not skeptical.

Summary: I hear it day in and day out. “I don’t use my website, I don’t use Facebook, they don’t matter to me!” The problem is the consumer doesn’t care. If you have these sites, they are very find-able on Google and people are seeing them and they are holding you accountable for how they look.

Need help with a new website or with social media content?

Visit www.snoozzy.com 

Assisting clients with income or estate tax reduction may seem like a small task in comparison to the vast amount of financial planning work advisors do yearly. However, if you can help your client find extra and unexpected funds in their tax returns, you can use those funds to set the client’s foundation for a lifetime of long-term success.

Tax reduction techniques

New tax reform laws in 2018 created significant tax liabilities to many consumer’s income and estate taxes. Most individual clients are unaware of these liabilities which puts them in a precarious financial position. In fact, a recent MDRT study found that 42 percent of Americans aren’t comfortable explaining the implications of the tax reform. It’s our role to stay abreast of these changes and alert clients to ones which may impact their plans while also offering applicable solutions. Oftentimes, the best solution for tax relief lies in identifying tax deductions.

The quickest way to uncover tax deductions is to examine the tax return. For example, many people have taken dividends of various kinds over the years that appear on page one of their tax return. Even though dividends are taxed at a lower rate, they can lead to a higher tax liability than your client is prepared for due to the new tax reform laws. One of the ways to navigate that is to reduce the dividends and interest income by using annuities, so that the growth occurs on a tax-deferred basis. From my personal experience, if you can incorporate an annuity into your client’s portfolio, you can reduce the tax liabilities for those types of investments anywhere from 25 to 40 percent on average.

If your client is a small business owner, another technique to reduce their taxes is to investigate their employee stock ownership plans (ESOP). With an ESOP, contributions of stock and dividends are both tax-deductible. Employees do not pay taxes on the contributions to the ESOP, only the distribution of their accounts. ESOPs can be enormous tax savers for small businesses that want to sell their business tax-free or tax-beneficial.

Charitable remainder trusts (CTR) are also viable options, especially for clients with diverse assets. If your client donates assets such as stock, real estate or cash to a CTR, they will preserve the market value of the assets rather than reduce it by large capital gains taxes. When they fund the CTR, they’ll also qualify for a partial income tax charitable deduction. Moreover, the investment income they receive from the CTR is tax-exempt. A CTR can save your client money while simultaneously increasing their net worth.

Be creative as you find your client solutions. For example, I recently did a 1031 real estate exchange to help a client avoid $1.3 million in taxes that he would have owed last year under the new laws. My client’s personal income tax deductions exceeded $490,000 per year, so I showed him how to navigate some of the tax liabilities that apply in the state of California. We then set up a defined benefit pension plan which allowed him to positively impact his taxes going forward.

Transition to long-term liability protection

After you guide your client through managing tax liabilities, walk them through the ways to best invest those recuperated funds to set them up for financial success in retirement. One of the largest liabilities they’ll face during retirement is long-term care, and after saving money from their tax returns, they will feel more confident about purchasing long-term care insurance.

Once your client decides it’s in their best interest to purchase long-term care insurance, suggest a potential product. Remember that this is not necessarily a sale as much as it is a relationship-building meeting. You can provide comfort and clarification in this process by inviting in their CPA. If they do not have one, recommend several you trust and bring in a product expert as well. This will allow your clients to ask specific questions about the product and to better understand its benefits, the tax liabilities, cost and structure. With the reinforcement of the CPA and the product expert, you can help make your client more confident that this is the right product for their financial well-being.

In addition, you can get creative with their long-term care by setting up plans which can use life insurance or annuities with long-term care providers. Also, help them establish a better savings plan that allows them to acquire income that’s not taxed so heavily. In most cases, the money and benefits your clients use to pay for their future nursing home will then be tax-free.

Know your territory

The same MDRT study found that seventy two percent of Americanswho currently work with an advisor will most likely use their financial advisor to help file taxes.If you are looking to give your practice an edge that sets you apart from other advisors, explore the taxation realm. It will take more work, time and dedication than other aspects of financial planning due to its intricacies, but it can ultimately be very rewarding. If you are new to taxes, take the time to learn as much as you can. Many advisors work with straightforward products, but if you decide to take on tax returns you must know your territory. It can be complex, so ensure you have a fellow advisor or CPA you can bounce ideas off of as well. Add to your knowledge base regularly, be creative and think outside the box. If you can master tax relief, your clients will be able to save more and, most likely, invest more with you. Ultimately, you’ll be able to set your client up for the best long-term success possible.

(I’m going to give you a formula, and a link to a short audio using the script, that guarantees you’ll get tons of referrals… but first let me vent.)

Everything you’ve ever read or heard about referrals is B.S.  You know this… if any of it actually worked… we’d all be rolling in the dough!  Referrals are free. Referrals are easy to sell.  So, if we could get referrals coming in regularly, we’d all be doing it.

Don’t get me wrong, we all DO get referrals… but it’s only when somebody a client knows, says to your client, “Hey, I need an advisor.  Do you know anybody that’s good?”

When that happens, our clients will refer.  BUT HOW OFTEN DOES THAT HAPPEN? Once or twice a year?

So, what can we do to get referrals happening whenever we want them, instead of waiting for this “miracle” to happen?

First, let’s dissect the advice Referral Gurus give us, broken down into two general categories…

1. Do your job well and your clients will refer to you—B.S.! Either we are all horrible at our jobs… or we’d all be getting a ton of referrals if this was the case.
2. You need to ask for them more often—REALLY? How did you feel the last time a car salesman or house siding salesperson asked you for a referral?   We know this and DON’T want to make our clients uncomfortable.  Why does this make clients feel uncomfortable?  Two reasons:

a.  If the client goes to their friend to sing your praises… 9 times out of 10 their friend is going to say, “Thanks, but I got a guy.” This makes your client feel rejected and they don’t want to take the risk of this happening.
b.  If they give you the name of their friend so that you can call… how do you think that is going to go? Is their friend going to say, “Say, thanks for having that advisor call me! I really needed the additional pressure in my life!”  NOBODY wants their personal information handed out.

Okay.  That’s why getting referrals the old-fashioned way does not work.  But don’t give up, there is a way that is proven to work.

The first thing you need to do is find some problem… that has NOTHING to do with investments or what you sell… and figure out a way to fix it.  This is the key to getting a referral script to work.  You can’t have your client thinking that the reason you are looking for a referral is to sell, or make money, off their referral.  If they think this, the number of your referrals will be miniscule.

I teach advisors about 7 different non-financial things that they can do for a client… for free… that have a huge impact on the client’s life.  As an example, we have a way to show 100% of clients, age 62 and up, that their Power of Attorney is wrong.  And that this problem with their Power of Attorney, could turn their spouse’s life into a nightmare if it doesn’t get fixed.

This brings up a problem, and a fix that has nothing to do with you getting paid.  The fix, by the way, is simply downloading a form off a U.S. Government website… and has nothing to do with you practicing law.

(The explanation for all of this is actually a whole article in and of itself… but the main thing you should take from this is that it is identifying… and fixing… a problem for which you don’t get paid.)

Now you use that non-financial problem and put it into this referral template (you can see how we do this in the link to the short audio, below).

Referral Script Template:

• Have them understand the non-financial problem and how it will negatively affect them if it is not fixed. It will cost them lots of money, time and hassle.
• Then fix it for them.
• Then ask, “Do you have anyone in your life that looks to you for advice… or comes to you for help… runs things by you?”
• “Would you like me to do these NON-financial things for them too… because if we don’t, who are they going to ask for help and drag into their problems… all the time, money and hassle problems? Who would they look to for help?”
• “Would you like me to take care of these NON-financial things for them… so that their problems… don’t become YOUR problems?”

This template works because now the client is referring… not to help you… not even to help their family or friend… they are referring to help themselves.  They don’t want to find themselves in a situation where they must help “Mom” untangle herself from a crappy situation.  When you offer to fix it, so they are never in a situation like that, they’ll jump at getting you and “Mom” together.

The reason they feel this is a “safe” referral is that,

1. It has nothing to do with you trying to get at Mom’s money
2. It is a one-time thing you are fixing… it does not suggest that you are looking for a long-term relationship with Mom.
3. It can be done quickly for Mom at no cost

You’ve not only removed the threat of “siccing a salesperson” on Mom… but you’ve fixed a problem for them, your client, that they will not have to deal with in the future.

When you approach referrals this way… you’ll FINALLY be in control of getting more referrals on a regular basis.  And don’t worry, after you fix the problem for the referral, guess what their next natural question is?  Now, what else do you do?  And presto, we are now in the process of bringing on a new client!

You can listen to how it is done on this 5-minute audio.  2 minutes of the actual script… and 3 minutes explaining why it works.

Have you noticed how difficult it is to reach people these days?  I’m sure you have. It’s hard enough reaching our existing clients, let alone prospects. The days of walking away with names and numbers (referred leads) are over.  Referrals just aren’t enough anymore. We have to think in terms of Introductions.

Build a Culture of Introductions

Getting introductions is not just about asking for them – although that’s an important strategy. Think in terms of creating a culture of introduction – where your clients know how to talk about you, know who you serve the best, and create engaging introductions (where the referral source is totally committed to creating a connection between you and the prospect).

Neal Bristol is an extremely successful advisor in Canada (#2 in his firm) who has created a culture of introductions. From the beginning of his career, Neal formed the habit of creating personal introductions – mostly over lunch, but occasionally over another meal or at a hockey game. When a client mentioned someone in his or her life, Neal became genuinely curious. Once it looked like he could be a valuable resource to this friend, colleague or family member, Neal would say to his client, “I would love to meet your uncle Ernie. Can I take the two of you to lunch?”

I was just in touch with Neal – getting permission to tell his story – and he told me, “Next week I’m going to lunch with a client who is bringing 6 other friends to introduce me. Also, I bought a cabin last year and have been hosting clients and their friends on weekends to help build my relationships with existing clients and meet new ones at the same time. My goal is to make it as easy as possible for my clients to provide personal introductions to their friends through lunches, presentations, cabin getaways, etc.”

Neal has been using personal introductions for so long, now clients call him and say, “Neal, I have lunch for us.” Meaning, “Neal, I have someone I’d like to introduce to you.”  Have you built a culture of introductions or are you just dabbling like most people?

Making Email Introductions Work

There is no substitute for an in-person introduction. That’s the highest form of introduction. However, those are not always possible.  Enter the email introduction.

Have you noticed that most people return email messages faster than voice mail message? Getting introduced through email is a viable strategy, but never assume your referral source knows how to craft an email introduction that will result in a solid connection. Follow these six steps to maximize the effectiveness of your email introductions:

1. Prepare an email introduction template. Make this as easy as possible for your referral source.
2. Discuss what the source thinks he or she needs to say to the prospect to get that prospect to reply to your email or take your call. Help your source think through this introduction. Words matter!
3. Briefly discuss how the source thinks the prospect might react to the introduction. Anticipate possible objections, so the source’s email or your email nips the objection in the bud.
4. Adjust your email template based on discussions from steps 2 and 3. Send the template to your client for adjustments.
5. Create a time frame for the introduction. Create a verbal agreement.
6. Ask your source to cc you on the email. Don’t assume he or she will remember to do this. I recently coached an advisor who had a client send 10 emails out on his behalf (or at least that’s what the client told him). But because he wasn’t cc’d on the email, he had no next step.

Whether you ask for them or now, always think in terms of Introductions. Be assumptive: “How would you like to introduce me to George? What do you think you need to say to him to get him to take my call?”

I’d love to hear your thoughts, questions, and best practices related to this topic. Please send them directly to me at my email address: BillCates@ReferralCoach.com.

I have a secret for you. Most financial advisors assume the wealthy have tons of advisors chasing them.  They don’t.  The upper middle income has tons of advisors chasing them but the truly wealthy are sometimes ignored because advisors feel…” Why bother, those people probably have advisors knocking on their door every day.”

With a little creativity, you can get a conversation started with someone that is truly wealthy.  If you are interested in taking a new look at how you can land the big one, check out the ten tips below:

1. First, ask yourself one question—Why would a wealthy person want to talk to me?  If you have a good answer…you have a good chance of getting into talking to a wealthy person…If you have a GREAT answer…you have a GREAT chance of getting into talking with a wealthy person.  You should spend A LOT of time thinking about and answering this question.
2. Mellow out!—Many advisors try to do too much for the wealthy client too soon. The wealthy have an excellent sense of when someone wants something from them and doing too much for free up front will push them away from you.  Instead, go in prepared and slightly aloof…you do not need this client (if you really do, then you are already sunk).  You are here to help and if they want it terrific, if they don’t, then you have others that want your help. Being a bit detached is what tells the wealthy that you aren’t “after” their money.
3. Don’t talk about their money! —Talk about what they have been able to accomplish with their money.  Review how the money has allowed them to give things to their family that will be remembered.  Talk about the causes their money has been able to move forward. They want to feel that their accomplishments are meaningful and that they have had a positive impact on the world.
4. Don’t complicate the matter—The advisor that can make life easier for the wealthy is going to have a friend for life.  Many of today’s wealthy people did not come from wealth…being wealthy is a new phenomenon for them.  What they really want is not to be overloaded with data and facts but a simple and easy to follow plan that is going to be invisible to them and their lifestyles.  That doesn’t mean you shouldn’t use sophisticated planning tools…it means that the explanation and benefits of those tools should be easily understood.
5. Don’t explain things—The wealthy do not want to be told what to do.  Your responsibility as an advisor is to have them discover things for themselves.  When the idea and planning is theirs, then it is going to get implemented.
6. Street smarts over credentials—As mentioned earlier, many of today’s wealthy are surrounded with people that have made it without an advanced degree or “proper” schooling.  They understand that what gets things done is not letters behind your name but knowledge of how to get things done.  Sure, you need to be educated but rather than flaunt your degrees, flaunt your knowledge of how the system “really” works.
7. Being an expert is worthless—This may be common sense, but so few advisor’s follow-through on it…become known as an expert.  Being an expert is terrific, but if no one knows about it, it’s worthless.  Make sure that you are getting published on a regular basis…newspaper quotes…write articles and books…get on TV…. I know…I know, you don’t know how.  There is a whole cottage industry that exists to help you become an expert.  Find out how.
8. You are working with decision makers—Many of the wealthy today have become so, because of their ability to think on their feet and get things done. Make sure as you work with them that you are presenting your solutions in a manner that encompasses all of the information as you would present it to a CEO that was going to make a decision right then and there to move forward or not.  They are more likely to give you several minutes than several hours so make sure that everything you cover is pertinent and that they understand why the information is important for them to have.  You bore them for more than a minute or two and you are done.
9. Be credible—The best way to make yourself credible is by being known for your ideas.  Many advisors spend too much time promoting themselves and too little time promoting their ideas.  Believe me, if you have an idea that will work for a multi-millionaire, entrepreneur, you do not need to advertise. They will find you.  Make sure that you have ideas that work for the wealthy and then make sure that everyone understands those ideas…you are not the main course…your idea is.
10. Just stand still—Don’t chase the wealthy, let them chase you.  We are back to #1 again.  Why does a wealthy person want to talk to you? If the reason is compelling enough, all you must do is get the word out via speaking, writing, being quoted, creating websites, etc. and you won’t have to market.  The wealthy will find you.

Guys and gals, these tips don’t just work for the wealthy but for anyone.  It’s just that if you are going to invest the time and effort needed to accomplish these things, you might as well do it for the wealthy.

Let’s start with some empirical evidence – then we’ll get to the “how to.”  I’ve seen two studies that indicate rewarding clients for giving referrals stimulates more referrals. The first study was a life-insurance based study that showed that using small gifts to thank clients for referrals increased referrals by 40%.  A general industry study- conducted by Baylor University demonstrated that the use of small gifts to thank client for referrals resulted in 22% increase in referrals. While the percentages varied, the results are clear. Thanking clients for referrals increases referrals.

Are you using small gifts to say “thank you” for referrals (compliance friendly, of course)?

Maximum Impact

In the financial services world, making the gift contingent upon referrals is usually against regulations.  Besides, it can cheapen the referral process.  And you don’t want to wait for the prospect to become a client. You just want to reward the giving of referrals.

 There are two things that will give your little gift (I’m talking $25 or less) maximum impact:

1. Speedy Response – The faster you get the gift to the client (meaning the closer to their action of giving – the more that act will be rewarded. Have a simple system in place to act quickly. For instance, you can have an inventory of Starbucks gift cards or movie theater coupons in your drawer. These things are flat and easy to mail.
2. Tailored Response – Anytime a gift is tailored to the client, it has more impact. This doesn’t necessarily mean you have to spend more money.  In fact, a tailored gift brings you more bang for your buck. If your client likes the movies, then make the gift theater coupons. If your client has a special pet, get something for the pet. If your client has children, perhaps coupons for ice cream cones.

I just delivered one of my full-day referral boot camp for a client in Connecticut. It was a great day with about 150 financial professionals in the room. As my client was driving me to the train station, I learned that he had two dogs.  He also started telling me about the introductions he was going to make for me. I immediately knew the thank you gift I would get. Once on the train, I went online and ordered the book Wolf in the Parlor.  It’s a fun and interesting look at how dogs evolved from wolfs and eventually became the most domesticated animal on the planet.

Gifts vs. Promotion

My general rule of thumb is, “If it has your logo on it, it’s not a gift. It’s promotion.”  With that said, when it comes to saying thank you for referrals with a small gift that has your logo is not so bad – as long as the gift is very utilitarian – say good quality golf balls for the golfer or a mug for a coffee drinker. (No stress balls, other useless items!)

Get the New Client Involved

Here’s a best practice I picked up from a Canadian company I worked with recently. They were encouraging their reps to get the new client involved in delivering the gift to the old client (logistics permitting). I think this is brilliant.  First, you end up with a gift tailored to the referral source. Second, the new client sees how you say thank you for referrals, so it plants the seed for them to give you referrals in the near future.

Personally, I think this client-assisted gift should actually be the second gift the referral source receives. First, they get a little something from you for the giving of the referral. Then they get something else when the prospect becomes a client.

One of the best gifts in this situation is the advisor  and the new client taking the old client out for lunch (or similar social setting).  While at lunch, the new and old clients are singing your praises (validating their decision to work with you) as well as coming up with other people who should know you.  This is a very effective strategy.

Remember – Reward the giving! Then get your new client to thank the referral source.

PARK RIDGE, Ill. (Sept. 4, 2019) — The 2020 Executive Committee strengthens MDRT’s offerings for the world’s leading financial professionals as Regina Bedoya, CLU, ChFC, takes her place as 94^th President and newcomer Peggy Tsai, RFP, CCFP, assumes the role of Secretary. The five committee leaders create a unique combination which elevates MDRT’s service and embodiment of its membership base.

Bedoya, a 26-year member, succeeds 32-year member Ross Vanderwolf, who will become the Immediate Past President. Ian James Green, Dip PFS, a 21-year member and Randy L. Scritchfield, CFP, LUTCF, a 35-year member will move into their new roles as First and Second Vice Presidents while newcomer Tsai, an 18-year member, will serve as Secretary.

With a diverse new leadership team, MDRT’s 2020 initiatives will focus on elevating connectivity and business growth opportunities. The Executive Committee will equip and empower members to live more rewarding personal and professional lives by providing an integrated shared learning culture and proven strategies to propel success at every stage of their career. On a local level, U.S. members have access to tailored resources they need to drive their businesses forward. With market insights at their fingertips through the new MDRT App, the exclusive, trends-based and customizable programming of the MDRT EDGE and collaboration with peers at Local Area Networking Events, members can immediately enhance their practice management styles, alter prospecting techniques and strengthen financial planning offerings for their clients.

“MDRT’s most valuable asset is its membership, and we continue to invest in initiatives that enhance benefits, allow our members to explore tailored resources relevant to their region, experience the magic of MDRT and bring us closer to our full human potential,” Bedoya said. “Our diverse leadership team is determined to inspire collaboration through more accessible regional offerings and promote limitless growth for our U.S. members, where MDRT’s legacy first began.”

As active MDRT members with a combined experience of more than 130 qualifications, the leadership team is uniquely positioned to influence the membership and overall profession. The 2020 Executive Committee is committed to consistently empowering members to hone their expert knowledge to achieve continuous personal and professional success in an ever-evolving business.

About MDRT

Founded in 1927, Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 72,000 of the world’s leading life insurance and financial services professionals from more than 500 companies in 70 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. For more information, please visit mdrt.org and follow them on Twitter @MDRtweet.

The just announced increased 2020 tax deductible limits can be a significant benefit for those with tax-qualified long-term care insurance policies according to the American Association for Long-Term Care Insurance.

“Tax deductibility for your long-term care insurance is a great subsidy especially after retirement, but only a small segment of newly purchased long-term care insurance policies offer the tax deductible opportunity,” explains Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI).

The Internal Revenue Service just announced the increased limits for tax deductibility of long-term care insurance premiums.  According to IRS Revenue Procedure 2019-44, a couple age 70 or older who both have the right kind of long-term care insurance policy can deduct as much as $10,860 in 2020.  The 2019 limit is $10,540.

“The special tax advantages allowed by the IRS are only available with tax-qualified health-based long-term care insurance,” Slome explains.  “Many more individuals today are buying linked-benefit LTC policies such as life insurance and annuity policies with a long-term care benefit but these almost never will qualify for premium tax deductibility.”

The tax deductibility often does not come into play when the individual or the couple is first purchasing insurance protection.  “Before retirement most people can’t reach the threshold whereby long-term care insurance premiums are going to be tax deductible,” Slome acknowledges.  “But after you stop working the likelihood you can benefit from this tax advantage increases significantly, something to keep in mind when considering what option is best for you.”

The following are the new 2020 deductible limits (2019 in brackets):

2020 Tax Deductible Limits Long-Term Care Insurance

Premiums paid for traditional long-term care insurance are includable in the term ‘medical care’.   The following are the just announced 2020 limits (per-individual):

Attained Age Before Close of Taxable Year         2020 Limit (2019)
40 or less                                                                $430  ($420)
More than 40 but not more than 50                              $810  ($790)
More than 50 but not more than 60                        $1,630  ($1,580)
More than 60 but not more than 70                        $4,350  ($4,220)
More than 70                                                          $5,430  ($5,270)

The American Association for Long-Term Care Insurance advocates for the importance of planning and supports insurance and financial professionals who provide long-term care financing solutions.  To see prior year’s tax deductible limits, visit the organization’s website at www.aaltci.org or call the organization at 818-597-3227 to connect with a long-term care insurance professional who can provide no-obligation and cost comparisons.