For Producer use only. Not for use with clients.
Focus 10 Life case study:
The Summit Group
Timothy Crowley
President, FOCUS 10 Life®, Inc.
Troy Reichert
SumCal LLC
LI 1806 4/14
For Producer use only. Not for use with clients.
disclosures
Focus 10 Life level term life insurance (Form 3011) and (Form 3011 F10 FL) are issued by Ameritas Life Insurance Corp. in most states. In New York,
Focus 10 Life (Form 5011) is issued by Ameritas Life Insurance Corp. of New York.
This presentation is designed to provide accurate and authoritative information. Neither the presenters, FOCUS 10 LIFE®, INC., nor Ameritas®
intend to, or are engaged in, rendering legal, accounting, or tax advice. If tax or other legal advice or other expert assistance is required, the
services of a competent professional should be sought.
The accuracy of the information cannot be guaranteed. Laws and regulations change frequently, and are subject to differing legal interpretations.
Neither the presenter, FOCUS 10 LIFE®, INC., nor Ameritas® shall be liable for any loss or damage caused, or alleged to have been caused, by the
use of or reliance upon this presentation.
FOCUS 10 LIFE®, INC. is an independent third-party administrator and is not affiliated with Ameritas®.
Sumcal LLC is not an affiliate of Ameritas Life Insurance Corp. or any of their affiliates.
This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company, including, but not
limited to, Ameritas Life Insurance Corp., Ameritas Life Insurance Corp. of New York and Ameritas Investment Corp., member FINRA/SIPC. Ameritas
Life Insurance Corp. is not licensed in New York. Each company is solely responsible for its own financial condition and contractual obligations.
For more information about Ameritas®, visit ameritas.com.
Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp.
Fulfilling life® is a registered service mark of Ameritas Holding Company.
©2014 Ameritas Mutual Holding Company
For Producer use only. Not for use with clients.
general product information
• Employer-Paid, Non-Voluntary Benefit
• Individual term life policy with 10-year level premium
• Simplified issue, with only one qualifier
• Issued to age 70
• Fully portable
• Convertible to a permanent policy without evidence
of insurability
For Producer use only. Not for use with clients.
sample Focus 10
Life application
10a - The “actively at work”
question is the only
qualifying question.
10b - General rule: any
tobacco use in prior 12
months = tobacco class.
Exception: 2 or fewer
cigars/month = non-tobacco
For Producer use only. Not for use with clients.
target prospects
Ideal for any employee in a full time “white-collar” occupation,
such as:
• Law firms – Management, Associates, and Other Staff
• Architectural/Engineering firms – Professionals and Staff
• HealthCare – Hospitals and Medical practices (Radiologists, Anesthesiologists,
Cardiologists, etc.)
• Financial Services – Accounting firms, Banks, Stock Brokerage firms,
Insurance agencies, and Investment firms
• Service firms – Advertising, Hotels & Casinos, Grocery Store chains, Call
Center, and Real Estate Companies
In addition, can be sold to a carved out group of employees (executives,
management, sales) within “blue-collar” industries
For Producer use only. Not for use with clients.
characteristics of prospects
• Already has life insurance of 2X, 3X or 4X salary (or
more)
• Higher earner with a cap on their existing coverage
• Older key employees facing benefit reductions
• Have employer paid UL/VUL policies that aren’t
performing
• Facing a rate increase in their group life plan
• Need Key Person or Buy-Sell coverage without
medical exams
For Producer use only. Not for use with clients.
some simplified issue
guidelines
fixed and flexible design
Fixed Design
Flexible Design
Covered Lives
5 to19
20 or more*
Available Face
Amounts
5-9 covered lives - $100,000
10-19 covered lives - $100,000 or
$150,000
Minimum $50,000
Maximum = lesser of $1.5 million*
or $20,000 X # of covered lives
ex: 50 covered lives x $20K = $1M
Face Weighted
Average Age
50.00 or less*
50.00 or less*
Maximum Issue Age
70 at Nearest Birthday
70 at Nearest Birthday
Maximum Class
Benefit Multiple
N/A
2.5 times*
Billing Modes
Calendar Quarterly
Monthly
*Exceptions allowed with prior approval.
For Producer use only. Not for use with clients.
plan design approval
(fixed and flexible)
All cases must be approved by Ameritas®. If a
case meets all guidelines, Ameritas® alone
determines acceptability. If a case exceeds
one or more guidelines, Ameritas® and its
reinsurer will determine acceptability.
For Producer use only. Not for use with clients.
uses of FOCUS 10 Life
FOCUS 10 Life policies are individual policies
that can be owned by the employer, the insured
or a third party. FOCUS 10 Life coverage can
be used to meet a number of business
insurance needs.
For Producer use only. Not for use with clients.
fringe benefits
FOCUS 10 Life is an excellent way to provide a
fringe benefit to valued employees. The employee
names his or her own personal beneficiary.
Advantages of FOCUS 10 Life over Group Term Life:
•
•
•
•
•
•
Price remains constant for 10 years
Benefits can increase to match increasing salaries
No age-based benefit reductions
Portable at same premium upon termination
Not experience rated
Convertible without proof of insurability
For Producer use only. Not for use with clients.
fringe benefits (con’t)
Ways to Use Group and FOCUS 10 Life
together:
Carveout:
- Replace Group Term coverage for key employees
- Lowers group term premium
Stacking:
- Base benefit for all employees, plus
- Additional coverage on top of group term benefits for
key employees
For Producer use only. Not for use with clients.
buy-sell funding
A Buy-Sell agreement is a legally binding document that stipulates what
will happen to a business ownership interest when a business owner or
partner becomes disabled, dies, retires or decides to sell his or her
interest in the company.
For Buy-Sell funding, the company can be both the owner and beneficiary
of the policy. Upon the death of a shareholder, the company uses the life
insurance proceeds to purchase the shares of the deceased shareholder,
as stipulated by the Buy-Sell Agreement.
FOCUS 10 Life Insurance can be an ideal vehicle for funding a Buy-Sell
Agreement. A significant amount a life insurance can be acquired on a
Simplified Issue basis.
For Producer use only. Not for use with clients.
key person life insurance
The untimely death of a key person - such as a top sales
executive - often has a significant impact on a business.
Key person life insurance can help the transition.
For key person life insurance, the business is the owner and
the beneficiary of each policy and will receive the entire
death benefit.
A FOCUS 10 Life Plan is an easy way for an employer to
acquire life insurance policies on the lives of key
executives.
For Producer use only. Not for use with clients.
one plan to address
multiple needs
For example, a firm can design a plan to
provide buy sell funding for two partners while
at the same time providing key person
coverage on ten managers and a fringe benefit
for the remaining eligible employees.
For Producer use only. Not for use with clients.
employer-owned life
insurance notice and consent
The Pension Protection Act of 2006 added Internal
Revenue Code section 101(j), which changed some of
the rules regarding the taxation of death benefit to be
excluded from the business’ income, the employee
must be given notice of the policy and consent to be
insured by the employer. This notice and consent is in
addition to any notice provided on the life insurance
application and must be signed by the employee prior
to issuance of the policy.
For Producer use only. Not for use with clients.
Focus 10 Life case study #1
•
A diversified internet company was
interested in securing a large life insurance
benefit for its CEO and a valuable new life
insurance benefit to all of its employees.
•
The company had 95 employees.
•
No medical underwriting was appealing.
For Producer use only. Not for use with clients.
Focus 10 Life case study #1
Recommended Plan Design
Class
CEO
CFO and COO
Benefit
$1,500,000
$1,000,000
Salary greater than $130,000
$750,000
Salary between $75K and 130K
$400,000
Salary less than $75K
$200,000
This plan design met all Simplified Issue Guidelines and
readily secured approval to be implemented
For Producer use only. Not for use with clients.
Focus 10 Life case study #1
the results:
•
•
•
•
•
The company secured a $1.5 million policy on the
CEO.
The employees received a new employer-provided life
benefit.
Premium for top 3 classes (8 policies) represented
over 45% of the total Focus 10 Plan premium.
Focus 10 annualized premium: over $72,000
Producer’s First Year Commission: almost $22,000
For Producer use only. Not for use with clients.
Focus 10 Life case study #2
•
Medical group needing $1,000,000 of life
insurance on each of 6 owners to fund a
Stock Redemption Plan.
•
Interested in streamlined underwriting.
•
Medical Group employed over 60 others.
For Producer use only. Not for use with clients.
Focus 10 Life case study #2
(con’t)
Recommended Plan Design
Class
Benefit
Purpose
Owners
$1,000,000
Buy-Sell
Non-Owner Physicians
$400,000
Fringe Benefit
Physician Assistants
$160,000
Fringe Benefit
All Other Employees
$65,000
Fringe Benefit
This plan design met all Simplified Issue Guidelines and readily
secured approval to be implemented
For Producer use only. Not for use with clients.
Focus 10 Life case study #2
(con’t) the results:
•
•
•
•
•
Owners secured $1,000,000 policy to fund the Stock
Redemption Plan.
The employees received a new employer-provided life
benefit.
Premium for Owners’ policies represented 63% of the
total Focus 10 Plan premium.
Focus 10 annualized premium: approximately $35,000
Producer’s First Year Commission: over $10,000
For Producer use only. Not for use with clients.
FOCUS 10 Life
compensation
First year commission (FYC) rate - 30%
Renewal commission rate - 2%
Policy fees are non-commissionable.
For Producer use only. Not for use with clients.
Focus 10: creating future
opportunities from one sale
New hires and promotions:
• New policies and New First Year Commission
Terminations:
• Portability for employee and opportunity for you to place
permanent insurance through conversion
Year 11:
• Opportunity to “restart” the Focus 10 Plan and earn new
first year case commission
For Producer use only. Not for use with clients.
how to obtain a FOCUS 10 Life
quote
Simply e-mail the census, preferably in Excel, to
mwelsh@FOCUS10life.com
In addition to Employer Name and Home Office
Address, the census should include:
•
•
•
•
Employee Name (not required)
Date of Birth
Gender (product is unisex but gender will appear on quote)
Tobacco status, if known. (Otherwise we will assume all are
non-tobacco)
• Benefit Amount (or salary and benefit formula)
For Producer use only. Not for use with clients.
FOCUS 10 Life ® website
www.focus10life.com
For Producer use only. Not for use with clients.
contact information
FOCUS 10 LIFE®, INC
131 Oak Street, Suite 5
Glastonbury, CT 06033
Mike Welsh – mwelsh@focus10life.com
Pete Hantzos – phantzos@focus10life.com
(860) 659-9711
(860) 659-9713 (fax)
For Producer use only. Not for use with clients.