Tax-Free Retirement Planning

[liteupmine]

I am currently working the Tax Free Retirement Planning (Section 79 concept) with LSW and thought it might be good to see if there were agents on the forum that had some experience and marketing ideas. I have some intro letters to physicians / business owners and have been referring to Patrick Kelley's Tax-Free Retirement book but thought a few of you might have some success on how to approach it. All feedback is welcome!

 

[scagnt83]

Sec 79 is a group based concept, isnt that correct?

How exactly does it break down?

 

[Full Throttle]

Sec 79 is a group based concept, isnt that correct?

How exactly does it break down?

I'm sure it was a mistake, but he's talking about selling permanent life insurance as a retirement plan. Learn to sell it for the death benefit, people want it if you explain it correctly. The cash value is secondary.

 

[0b1kanobee]

I have seen it on the agent login for LSW but haven't looked into it yet.

 

[liteupmine]

This is the basics on the concept via LSW:

Section 79 offers employers an opportunity to purchase life insurance for employees on a tax-advantaged basis. This type of plan offers several advantages:

• Executive gets to exclude a portion (generally 35-40%) of the employer contribution from income.
• Tax-advantaged life insurance for key employees' personal or business needs,
• Income tax deduction at the corporate level,
• High percentage of plan cost allocated to key employees,
• Provides supplementary retirement income,
• Attracts and retains key employees, and
• Offers a limited funding commitment.

Factors to Consider:

• Should be a demonstrated need for life insurance,
• Owner-employee is generally highly compensated ($200,000+),
• Plan contribution is at least $25,000,
• Special rules apply to groups fewer than 10 employees,
• Per capita rank and file cost is low, but very large employee groups may drive up costs,
• Union employees may be excluded, and
• Plan involves 5-year funding commitment.

 

[Stonewall]

That's great! A good friend of mine would now say, "do you have a prospect?" If you don't, then none of this matters.

Good luck!

 

[liteupmine]

Stonewall - your friend is right but this forum is meant for professionals that are looking to help each other - not for being cocky & rude..., but yes - to answer your question, I have prospects. Thanks for the uplifting comment.

 

[DHK]

Stonewall - your friend is right but this forum is meant for professionals that are looking to help each other - not for being cocky & rude..., but yes - to answer your question, I have prospects. Thanks for the uplifting comment.

It's good to know that you have actual prospects that are candidates for this program.

Do you know how many agents hear a concept from a wholesaler and spend days trying to find ways to market it? Things like "premium financing", leveraged retirement planning and the like.

The question isn't meant as being cocky & rude. It's meant to be a "wake up call" to agents who are trying to learn everything about advanced underwriting strategies before prospecting for the basic needs that our products solve.

 

[scagnt83]

It sounds like some type of hybrid deferred comp program.... not sure how they exclude the income...

Be careful saying its "tax free", they make sure to say "tax advantaged" in what you posted.

Unless its employee owned, distributions will not be tax free, just tax deferred.

 

[DHK]

http://finsecurity.com/finsecurity/pdfs/2b4-10.pdf