This was just received from NAIFA-California regarding a Dateline NBC show that  applies to anyone in the annuity business, although it was intended for those in California; read below.

To All NAIFA-California Members:

Dateline NBC has been working on a project involving "unsuitable senior investments." 
The show will more than likely contain segments regarding annuity sales to seniors. 
While we don t know the exact content, we believe it is a good idea to watch the show. 
You may get questions from prospects and clients that have also watched.

Dateline NBC airs this Sunday, April 13 at 7:00 pm.

The Most Common Mistakes When Submitting Life Insurance!

Proposed Insured (this information is incomplete on 32% of all cases received)

• Occupation and Duties
• Proposed Insured Earned Income
• US Citizen/Resident Alien
• Drivers License Number
• Subject to Back-up Withholding

EFT (incomplete on 25% of all cases)

• Account Owner Name and other EFT data

Beneficiary/Owner (incomplete on 23% of all cases)

• Owner SSN#/TIN
• Beneficiary Class
• Relationship of Beneficiary
• Type of Beneficiary Trust

Coverage (incomplete on 9% of all cases)

• Purpose of Insurance
• Existing Insurance Type and Amount

Replacement (incomplete on 5% of all cases)

• Do you have any information, other than stated in this application which indicates that any proposed insured may replace or change any current insurance or annuity in any company?
• Other Replacement Questions

Premiums (incomplete on 4% of all cases)

• Premium Payment Mode
• Source of initial/future premiums (incomplete on 1% of all cases)

Reinstatement

• Reinstatement Amount
• Reinstatement - Insurance company

27% of households want life insurance, but only 12% actually purchase!

According to a 2007 LIMRA report, 27 percent of households with an income of at least $75,000 said they would buy life insurance in the coming year.* However, past data shows us that only 12 percent of households actually purchased life insurance policies. Why didn’t the other 15 percent buy? Most likely because their agents didn’t call on them to inquire about purchasing insurance. When was the last time you asked your clients to buy? Or have you asked them if they know anyone you can help?

Increasing Use of Home Care in Long-Term Care Insurance Policies

The 2007 Society of Actuaries’ examination of claim experience from 1984-2004, under long-term care insurance policies, shows a significant change in the types of services received as compared with their 2002 report (claims experience 1984-2001). Nursing home only claims dropped from 80% of all claims in the 2002 report to 55% in the current one. Home care only claims increased from 15% in the earlier report to 26% in the current one, while claims with both nursing home and home care rose from 5% to 19% of all claims.
1984-2004 Long-Term Care Intercompany Study
Society of Actuaries
November 2007
http://www.soa.org/research/long-term-care/research-ltc-study-1984.aspx

Trends in Employer-Based Retirement Plans

The number of employment based defined benefit pension plans decreased from about 170,000 with approximately 29 million active participants in 1985 to about 47,000 plans with about 21 million active participants in 2003. Conversely, the number of defined contribution plans increased from over 460,000 with about 33 million active participants in 1985 to over 650,000 with approximately 52 million active participants in 2003.
Employer-Sponsored Health and Retirement Benefits; Efforts to Control Employer Costs and the Impact on Workers
GAOGAO –07-355
March 2007
http://www.gao.gov/new.items/d07355.pdf

Disability Rates Steadily Declining Among Older Americans

An analysis of data from the National Long Term Care Survey (NLTCNLTCNLTCS) revealed that the prevalence of chronic disability among Americans age 65+ decreased from 26.5% in 1982 to 19% in 2004/2005. Of note is the fact that the rate of decline in the prevalence of disability steadily accelerated over the course of the 22-year study period, going from a low of 0.6% in the years 1982-1984 to a high of 2.2% in the years 1999-2004/05.
Kenneth G. Manton, XiLiang Gu and Vicki L. Lamb
Changes in Chronic Disability from 1982 to 2004/2005 as Measured
by Long-Term Changes in Function and Health in the U.S. Elderly Population
Proceedings of the National Academy of Sciences (PNANAS)
November 28, 2006
http://www.pnas.org/cgi/reprint/103/48/18374

401(k) Options: Encouraging Increased Participation and Saving

Findings from Hewitt’s 2007 Trends and Experience in 401(k) Plans survey indicate that automatic enrollment is on the rise, with the percentage of respondents automatically enrolling employees in their 401(k) plan almost doubling since 2005, going from 19% to 34% in 2007. Additionally, employers offering an automatic contribution increase option went from 9% in 2005 to 35% in 2007.
Trends and Experience in 401(k) Plans 2007
Hewitt Associates LLCLLC
November 2007
http://www.hewittassociates.com/_MetaBasicCMAssetCache_/Assets/Articles/401kHI07.pdf

IRA: PLR 200802008* Inadvertently almost caused the Termination of S Corporation

Background:

An S corporation is a regular corporation that has elected a special tax status for federal income tax purposes. Rather than being taxed at the entity level, all items of income and deduction of S corporation are taxed at the shareholder level. (In effect, these items “flow through” to the shareholders.) “S” status is a privilege, and in order to maintain it, the corporation and shareholders must continue to meet stringent requirements.

In the facts of PLR 200802008*, S corp shares were issued to an individual retirement account (IRA) for the benefit of shareholder A. While certain qualified plans are permissible shareholders of S corps, an IRA is not a permissible shareholder. After a period of time, the shareholder (A) and the corporation realized this error. (The shares were subsequently distributed from the IRA to A.) Technically, the S election was inadvertently terminated at the moment the IRA acquired the shares.

However, under IRC Section 1362(f), the IRS may waive this result if the termination is truly found to be inadvertent. The IRS was willing to treat the corporation as a valid S corp from a stated date going forward, but subject to certain conditions. Two of the conditions were as follows. For the years that the corporation generated a loss, the IRA would be deemed the shareholder. For the years where the corporation generated a gain, A (the individual) would be treated as the shareholder. In short, the IRS was able to impose a kind of “heads I win, tails you lose” tax treatment. The “loss” would not be of significant use to the IRA (because of its tax exempt status) and the “gain” would be attributable to taxable individual (A)!

Significance:

Read the rest of this entry »

The annual exclusion is, by law, calculated based on the $10,000 exclusion amount
in 1998, then adjusted annually for inflation (based on the federal inflation rate) in
$1,000 increments. For 2007, the annual gift tax exclusion amount was $12,000, but
the true underlying amount for 2007 was $12,660.

The federal inflation rate for the 2008 values was announced at 2.3%, which makes the underlying amount for 2008 equal to $12,951. Therefore, because the underlying amount is less than $13,000 the annual gift tax exclusion for 2008 will remain $12,000.

So thanks to low inflation and a mere $9 shortfall, the entire nation loses out on the
ability to make an additional $1,000 of allowable annual exclusion gifts per donee in
2008. This is a rare occasion where a low inflation environment is not a good thing!

Despite the likelihood of increased regulation of life settlements and of those who play a role in arranging for life settlements, as well as longer life expectancies potentially leading to lower offers, it is expected that the life settlement industry will continue to grow and flourish, especially with more and more institutional money entering the picture. This, coupled with the potential liability resulting from a failure to discuss a life settlement when it would clearly be in the best interest of a client, makes it important that each of us becomes familiar with those situations when a life settlement should at least be considered, including when the policy to be sold will be replaced with a better performing new policy.

Differentiating Your Business from Your Competition

Most businesses fail to differentiate themselves effectively from their competition. For those of us in the insurance industry, this means that we do not give prospective clients a truly compelling reason to do business with us rather than with someone else. Part of the reason is that our message is cluttered and conveys information rather than knowledge. For example, if you were to check your website and the websites of your competitors, they probably all say pretty much the same thing: what you do, rather than who you are and what you can do for your clients. Pick your best clients and prospects to work with and develop messages and techniques that clearly convey the value to them of doing business with you.

Join Bill Upson for an eye opening Webinar on how to utilize long term care as an advanced planning tool!

REGISTER TODAY: Click Here!       DATE: March 4, 2008         TIME: 11AM PST    

Drawing on his years of experience, Bill provides the "How To’s" on:

• Using LTC to open the door to larger opportunities, such as advanced planning and money management.
• Improving the financial lives of your clients by helping them deal with family and business issues that have been festering for many years.
• Increasing your case sizes and yearly fees.
• Using the book, "Long Term Care… Alternatives and Solutions", as a valuable resource.
• Designing a financial plan for your clients that will preserve the physical, emotional, and financial well-being of the clients and their families.

Bill Upson is an experienced Financial Advisor, author of the book Long Term Care…Alternatives and Solutions, and co-author of the recently published book, Orderly Affairs - Pathways to Financial Freedom for Everyone.  He is a member of the Million Dollar Round Table and a 10 year Top of the Table qualifier, and has provided insurance and investment solutions since 1982.

REGISTER TODAY AND RECEIVE:  A copy of Bill Upson’s Long Term Care…Alternatives and Solutions.  Click Here! To Register

WEBINAR INFORMATION

Go to the web address below 10 min prior to the webinar, then call the conference call number for audio. Next You will need to punch in the conference code after dialing in.

Web Address: https://www1.gotomeeting.com/register/730958445

Conference Call Number: (605) 772-3434
Conference Call code: 126-527-837

This web conference will be conducted by:   Bill Upson CLU ChFC

Moderating, is Bob Burton LLB CLU ChFC AEP, Provada’s Director of Advanced Planning

Alternatives to 401(k) Plans for Highly Compensated Employees (HCEs)

Almost all 401(k) plans discriminate heavily against HCEs and encounter qualification problems when the required anti-discrimination testing rules are applied. The typical solutions to solving these problems are both unfavorable and costly. Two interesting alternatives for HCEs are available for solving these problems more effectively, both involving the sale of life insurance: (1) Non-Qualified Deferred Compensation Plans (using COLI) and (2) A special proprietary "LBP 401(k) Plus" Plan (using individual non-variable policies).

In connection with Non-Qualified Deferred Compensation Plans, an effective approach that leads the client to choose COLI financing rather than having to be sold COLI is the consultative approach that presents the financial results of all approaches, from no financing (using current cash flow) to financing with mutual funds or other instruments; COLI then typically "sells itself".

Buy-Sell Agreements

We are all intimately familiar with the need for buy-sell agreements when dealing with closely-held private business interests, but how often are we aware of the typical problems and shortcomings encountered with most agreements? There are three important things to remember here: (1) Getting Agreement NOW when everyone’s interests are reasonably comparable; (2) Paying attention to the Six Defining Elements of a proper agreement (Standard of Value, Level of Value, the "As Of" Date, Qualification of Appraisers, Appraisal Standards, and Funding Mechanisms); and (3) Periodically applying a Buy-Sell Audit Checklist.

One of the key factors requiring particular attention here is the valuation methodology being employed. An interesting idea to suggest is the "1% Solution": having the parties devote 1% of the business value annually to hiring the expertise necessary to make sure that all aspects of the agreement are still relevant, up-to-date, and accomplishing the desired results.