What’s Your Game Plan for 2010?

by Matthew A. Treskovich, MBA, CMA, CLU, ChFC, FLMI

The end of the year rush is upon us, and we are all busy trying to wrap up those last few important cases before year-end. For some of us, 2009 has been a great year – for others, it has been “challenging”. Now is the time to spend some time thinking about what worked for you in this year, and to make plans for the coming year. If what you’ve been doing has not been working as well as it did in the past, or you are not bringing in as much income as you’d like, it’s time to make some changes!

What won’t work next year:

• Being the “cheap term guy”
• Fixed deferred annuities

Most insurers are repricing their term products and increasing rates. Several have pulled or repriced their no-lapse guarantee universal life products. If you’ve been marketing yourself as the cheapest guy on the block for life products, you’ll face an uphill battle in 2010.

Fixed deferred annuities will be tough to sell next year. Interest rates on multi-year guarantee deferred annuities are not compelling, and the “market value adjustment” clause buried in most of these contracts means clients will get burned in a rising interest-rate environment. The annuity companies with the best interest rates have the weakest financials, making decisions even more difficult for you and your clients. There are several alternative strategies that you can use to park excess nonqualified money.

What will work next year:

• Market to clients in your existing book who are doing well in current environment
• Help your clients find a place to park excess cash
• Boutique products and strategies that set you apart from the competition

Many of your clients are struggling in the current economy – but not all of them. As you look through your book of business for new opportunities, think about what professions should do well in the coming year. Foreclosure attorneys will probably have an excellent year, while real estate agents will have a tough one. If you don’t know how a client is faring, call and ask them!

Conservative clients who are doing well need a place to park excess cash. Whole life sales are up significantly this year because it is a decent cash-accumulation vehicle. For affluent clients, universal life policies with high early cash values issued by extremely strong insurers will be at the top of the shopping list. These boutique plan designs come in several flavors. The most popular involves heavily over-funding a UL policy right to the MEC limit, and with the right product it can produce cash surrender value over 90% of the premiums paid in early years. With the ongoing term repricing, business owner clients could actually have a lower net cost using this strategy than buying a new term policy.

If you can identify these clients, you don’t need to become an expert in the products. You do need find a partner who understands this market, and can give you access to the products that work well in these situations. On January 1st, your year-to-date production will be zero! Now is the time to make plans to put some big numbers on the board in 2010.

Creekmore Insurance Group is a full-service life insurance brokerage specializing in impaired risk and jumbo life cases, serving independent agents, agencies, and financial advisors. Matt is the CFO and oversees advanced case design and underwriting. He can be reached via email Matt@LifeAgents.com or at 800-936-0339. For more information, visit www.LifeAgents.com

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