The Tony Steuer Podcast with Barry Flagg, Michael Brohawn and Bill Comfort: A Conversation On Managing Life insurance

In this episode, I spoke with Barry Flagg, Founder of Veralytic, Michael Browhawn, founder of Your Life Insurance Solutions and Bill Comfort, Owner of Comfort Long Term Care about managing life insurance policies.  We discussed in-force life insurance illustrations and  and how an advisor can transition from being a sales person to being a trusted advisor.

“When looking at a life insurance policy, you’ve got to understand three things: what’s being charged inside the policy and is it fair, what is the performance required to meet your expectations and is it reasonable, and are those performance expectations consistent with your risk profile. Cost, performance and risk - consumers have to understand that”. - Barry Flagg 

“When looking at a life insurance policy, break it down to the characteristics of different types of policies and then focus in on the premium flexibility (is it required or is it flexible), the investment risk which goes hand in hand with cash value (is there a need for cash value), the death benefit guarantee, and then focus on the cost.” - Michael Brohawn

“If you’re buying long term care insurance or have an interest in having a benefit like that, you have to work with someone who represents all of the different options, otherwise you will not get a fair comparison. It’s making sure that you’re exposed to being educated from a non-biased place as much as possible, knowing what all of the options are.” - Bill Comfort

Bios: 

Barry Flagg is the inventor and founder of Veralytic. Barry is a recognized expert in applying Prudent Investor principles to life insurance product selection and portfolio management and serves as sub-advisor to thousands of life insurance trusts. 

Michael Brohawn is the founder of Your Life Insurance Solutions. Michael is a pioneer in the trust-owned life insurance field. Michael, along with two partners, founded the first full-service trust-owned life insurance (TOLI) outsource firm in the country. Michael is the author of The Wealth Advisors Guide to Life Insurance. 

Bill Comfort is an independent LTC specialist agent with Comfort Long Term Care. Bill hosts the broadcast & podcast show: “Aging America Radio” with a focus on a wide range of topics supporting "successful aging".

Transcript

Speaker 1: 0:07

Welcome to the Tony Stewart podcast presented by paperwork. Welcome. I'm pleased to be joined today by very flag Michael Brown and bill comfort. Barry flag is the inventor and founder of bear lyric. Barry is a recognized expert in applying print investor principles to life insurance, product selection, and portfolio management, and serves as the sub-advisor to thousands of life insurance trusts. Michael Brown is the founder of your life insurance solutions. Michael is a pioneer in the trust owned life insurance field. Michael, along with two partners founded the first full service trust don't life insurance, totally outsource firm in the country. Michael is also the author of the wealth advisors guide to life insurance. Bill comfort is an independent long-term care specialist agent with comfort long-term care. Bill hosts, a broadcast and podcast show aging America radio with a focus on a wide range of topics, including successful aging. Uh, we'll see if life insurance policies successfully age as well. So bill Barry and Michael, welcome to get ready. Thank you for joining me today. Thanks. Good to be here, Tony. It's great to have you guys, so let's punch on in, uh, first thing I always like to start out with is if you can tell us a little bit about what are your origin stories, how did you get started in life insurance? Uh, Barry, you want to lead off?

Speaker 2: 1:52

Sure. So I started my financial services career in a fiduciary environment. Uh, what's con kind of described now as a client's best interest environment, uh, where, um, I was an analyst in a financial planning firm, uh, for their pension investment advisory business. So that's a lot of words to say that the partners in the firm would come back with pension and profit sharing plan statements. I'd look the funds up in Morningstar. Uh, give them a summary. They'd go back to the client and say, here are your good funds. Here are your funds that have high costs and, and they would make some changes, um, all pursuant to what, what is required under pension and profit sharing laws. Um, you fast forward a couple of years, uh, I went to go work in a life insurance agency. Again, as an analyst, I, uh, was, uh, told that the way you do, uh, decision support for life insurance is you run one sales proposal. That's never to come true and you compare it to another sales proposal. That's never to come true and that's due diligence. And that never made any sense to me. So, uh, having seen firsthand the utility of Morningstar in the investment business and looking around and seeing nothing like it in the insurance business, I applied for the first of our patents and in, um, uh, late nineties was awarded the first of our patents in 2002, uh, and started a business that provides financial advisors with the same kind of decision support, fiduciary, mostly fiduciary financial advisors with the same kind of decision support that I had as a 19 year old kid in this pension investment advisory practice.

Speaker 3: 3:31

Fantastic. Michael, how did you get started? What's your origin story? My origin story is, uh, I graduated from the university of Maryland with degree in horticulture. There was a landscape contractor for many years and when I was around 30, my back was going out and having to do with a big insurance producer who, when I met with him was laying on the ground, cause his back was also going out and long story short. He brought me into the business and I worked in the high net worth field for a number of years. And as you mentioned, I really is focused the last 15 years and working in the trust on life insurance world, kind of on the other side of the table, purely managing. So while I was in that space, it was really about developing a prudent process for trustees. So now that I have left that company, I now take those processes and I work with wealth advisors who have clients who want to buy life insurance or manage life insurance or sell life insurance. So I, you know, they always say you're going to have a couple of careers in life. And, uh, so, um, I am exhibit one for that. Well, I still do a lot of landscaping on the side. There you go. They'll have that achieve. What's your origin story?

Speaker 4: 4:43

Yeah, I'm, uh, proudly celebrating my 30th year in the insurance business this year. Uh, it wasn't my first career. I have a journalism degree and worked as a radio and TV reporter, anchor producer director, uh, for a number of years. Um, but I like to say I kind of came to the insurance business naturally being a third generation, uh, insurance, uh, man in the family. Uh, my dad recruited me to the business when I was 29 years old and I just had my first kid looking for something else to do where I could really grow. And, um, it obviously stock, um, the first 10 years of my career, I worked in a multidisciplinary insurance, independent insurance practice. We did a lot of employee benefits, which I discovered I hated. Um, I very quickly became the disability specialist and had a senior partner who was very wise in like 92, 93. He handed me about a four-inch stack of specimen policies and brochures. And he said, my clients are asking about this care stuff. It's basically disability insurance. Why don't you study this? And, you know, tell me what we ought to sell and we'll split the business. And, uh, in 2000 I made a decision professionally to specialize just in long-term care insurance. I do a little disability. They're two sides of a coin working years and retirement disability, if you like. Uh, so for the last 20 years, long-term care has been my specialty. Um, and like everything else, everybody on this panel does at the end of the day. And I was blessed to be raised with a perspective that you always think about what's best for the client. So I try to bring that to my practice and, and conversations like this.

Speaker 1: 6:49

Fantastic. Well, thank you all for joining me today. And I think bill, one of the things we talked about that's important for people in the audience is that there are the crossover policies that are both long-term care insurance and life insurance as a growing area of the market. So we're going to see more of the conversations and a need to get long-term care insurance into the same conversation as we've had on the life insurance side, that the industries are merging to some degree. Um, so as we get into it, you know, the first thing that brought us together, uh, that started this podcast is why do you feel that life insurance policies are hard to manage? Why is a life insurance policy hard to manage?

Speaker 3: 7:38

Well, there's not been a go first. Um, and I'm going to say there's two reasons, um, neglect and knowledge and reality is, and I, I may be, you know, I may be an outlier here, but I don't really think life insurance is that hard to manage. I have, I have found that what happens is that either the people who are managing it have no concept of, of the product itself or they, or they neglect it. Those are the two things that I have found. Now, life insurance has become more sophisticated. It's harder to understand. I do believe that, but the reality is that most times I have found that people who have the job of managing life insurance, um, those are the two issues they're, they're unaware of, of, of the policy. And they don't put the time and effort into the policy, which in reality, if you're a fiduciary, if you don't understand it, then you need to get somebody that does. But that's been the two issues that I've seen. Tony, I don't know about you barrier or for bill.

Speaker 2: 8:44

Yeah. I would echo, uh, Michael's comments and, and add that. Um, uh, I think there's good reason why, uh, people have not had, uh, really as a practical matter, the ability to understand life insurance, uh, in, you know, years ago, uh, when my father first got into the life insurance business, you know, life insurance was a rate book, everything was fixed. It was much more regulated when it was all up. And they were there really wasn't much to understand with the advent of universal life in the eighties, uh, it to Michael's point became, started becoming more complex and it could become more complex since. Um, and, and, and, but all along that evolution, there has been no way there had been. And this was kind of one of my epiphanys for starting this company. There was no way to measure what was being charged inside the policy and no way to measure what was actually, uh, uh, likely to, for the policy to earn in performance. And if you don't know what you're being charged, or if you can't measure what you're being charged, if you can't measure what you're getting in performance, there's no way to manage it. You can't manage anything. You don't measure. You can't manage your employee, your employees. If you don't measure their performance, you have to measure everything you're going to manage. So when, when Michael says, uh, you know, it's not all that difficult to manage, he he's, he used his paralytic. So that's coming from somebody who has a ruler for the people who don't have a roller, it's hard to manage because you can't manage anything you don't measure.

Speaker 4: 10:23

I think I'll, I mean, I want to kind of add a, sort of put myself in the consumer's shoes. So Michael and Barry, you all are fiduciaries. You've worked to support fiduciaries who have a responsibility to understand these things on behalf of their clients. But I think the other side of the coin is clients, consumers, policy holders need to know that they shouldn't remain ignorant. Now they can't be specialists, but too often consumers buy life insurance and put it on the shelf. And it's only when something starts going sideways or they get that letter that the policy is going to fail in a year without a whole lot of extra money or a rate increase or whatever. I think consumers need to know that they can ask. And they should maybe not every year, I'm just speaking generally, but every two or three years, you ought to be asking for updates, asking for that data, you know, Barry, that you is so important to what you're saying to, to know what you're doing. And I, and I think that's important as well that consumers need to be given permission to seek the information.

Speaker 2: 11:42

Yeah, I would say it's, it's beyond permission. I mean, what Tony and I have talked about this on previous podcasts, consumers, if they want to protect themselves, they have to, it's not permission to ask. They have to ask for what's actually being charged inside the policy. What's that? What are they actually getting in performance, uh, and then ask their financial advisor to help them measure those things, to make sure that we're getting a fair, that the costs are reasonable and the performances is, is, uh, uh, you know, reasonable to expect. Uh, the, any of the biggest mistake consumers make is they for permanent life insurance, for cash value, life insurance. And this goes back to the days when my dad was in the business, that the premium is the cost. The premium is not the cost. The cost is what the insurance company takes out of your premium. Currently there's a knucklehead rule that says that insurance companies can quote a low premium while they're charging high costs without disclosing the risk of the insurance company, come back and asking for more premium later, you cannot use the premium as your proxy for costs. You have to ask for the cost from the insurance company, and some of them are, are reticent to give it. You have to ask for the cost, you have to ask for the performance expectations, and you need to find a financial advisor who will be able to measure those things.

Speaker 3: 13:08

And, you know, bill you're exactly right bill. And I was a little bit flippant in my original response that it's, you know, knowledge, but the reality is that what Barry's talking about is absolutely true and what I have found. Um, so a number of years ago in the cost of insurance increases, we're in, we're really hitting the marketplace. I was doing a blog for, for the company I left. And so if you Google a cost of insurance increase, one of those blogs came up. So I got a lot of phone calls around the country from 85 year old widows. They had no idea. I've got a million dollar policy with a hundred thousand dollars of cash and I've got it. And, and so one of the biggest problems is that consumers don't have any concept of these products. And I can remember my mom who passed away many years ago, had an annuity and got a notice that the surrender charges were up on the annuity. She called me thinking that all of the value of the annuity was gone. My mother was not doing person, but that's just the consumers don't understand these products. So, um, it's great to say, yeah, um, they should be able to get better access. And that's absolutely true. And I think we'll talk about later about, you know, what are the things that's going to be happening going forward is more tracking, um, of policies as, as almost a business model. Because the biggest problem that I see out there is that consumers are, they have no concept of, of this product, how it works, where you could, they could call up Barry or bill or myself and get something answered. Cause we're dealing with this on a daily basis. It feels like they might be electrical engineer. And I don't know how to wire my house and that, because

Speaker 1: 14:52

There are so many people, for example, with the COI increases, who just said, I don't understand and surrender their policy when maybe they shouldn't have surrendered their policies at all, but they just had no concept of how to deal with it. And that was one of the things that was very sad when I was writing a lot about that, the phone calls that I would get and the people that were just giving up their policies and throwing them away. And it's a sad thing.

Speaker 2: 15:17

Yeah, definitely for your Tony, for your listeners, one quick plug for you, for your listeners, um, uh, your articles in Forbes, uh, are excellent educational tools. Uh, they really provide an understanding of what's going on with the policy for, in a way that consumers, I think consumers can understand. Uh, so any of your listeners who want to also follow Forbes or follow you on LinkedIn, I would encourage them to do so too much. Writing about life insurance is why whole life is the best. Why indexed universal life desk, why universal life is the best. And that that is not coming from the consumer, the consumer or financial literacy perspective that you come from. So I encourage anybody to follow Tony or Forbes his writings on Forbes, uh, for better,

Speaker 1: 16:10

Good point. Well, thanks, Barry. I really appreciate that. And for listeners out there also, that's why I created, uh, questions and answers on life and charity is to take away from all the other books out. There is life insurance is not a bank. Buy insurance is not an investment at its core. It's an insurance policy that happens to have an investment component. And that gets back to what you're talking about. Barry is that there is a cost affiliated with using insurance as an investment. Um, so let's get into this is, um, perhaps when you could quickly define what an Inforce illustration is. And then, uh, the three you could talk about, you know, our Inforce illustrations useful tools and how they can be used. Sorry.

Speaker 2: 17:01

So, uh, since my first experience, uh, in the finance in the insurance business was, you know, you run this illustration, there's several that come through and you compare it to something else. Uh, I'll, I'll kick this off. So, you know, back in, again, back to the day when my dad was in the insurance business, you had a rate book, you calculated the premium, and that was the premium, uh, with the advent of universal life, the premium is flexible. It's the, it's the, the very nature of the product is a flexible premium product. And so, uh, you have a computer that can calculate premiums. So they, in this change from a fixed premium to a flexible premium, the insurance industry, the national association of insurance commissioners came up with this, with this regulation called illustrations model regulation. The, the, the goal of it was to make universal life illustrations similar enough to whole life illustrations or other illustrations so that the consumer could look at the premium and the premium would be a proxy for the cost. Uh, that is, uh, a it's well-intended, but it is something that in my experience has never worked. So, um, illustrations, again, they they're, they're, uh, they're used as a, uh, due diligence tool or a decision support tool while, while that was at the intention of this rag, it, it has never worked. They re they're nonetheless very useful for cashflow planning, for what if analysis, um, for, um, financial and estate planning, because if you're going to do an estate plan, you've got to know, you know, w what the inputs and the outputs are. Uh, so they're very useful for planning their use lists for decision support, for product recommendations.

Speaker 3: 19:00

Yeah. And, and so illustrations in general, I think the biggest rap on illustrations today would be that they're used too often as a marketing tool. And, you know, the worst, the worst that I've seen that come across my desk in the last six months where, um, index universal life, where you're borrowing money, and then you're using it for retirement income, and it's over a 16 year period based on assumptions that may or may not come true. And it's like, well, what could go wrong here? I mean, the biggest problem with that with an illustration is it assumes a level, uh, rate of return, which we know is not going to happen. So I always tell people that I use life insurance illustration as a guy, but the one thing about life insurance illustration, especially of your universal life policy, where you can go out and get the expense pages, um, uh, you know, I used to tell my clients, I tell my clients, it's an Excel sheet. It literally is an Excel sheet, and you can actually get it, the PDF that the carrier sends, you have the expense pages, and you can convert that to an Excel sheet. I don't know, like here in that, but that's what you can do. And you can literally then figure out what the cost is per thousand dollars of coverage for that year. And that's a very interesting thing to do. I mean, I think the value of the best parts of a life insurance illustration are the expense pages where you can show the client, look, this is what you're paying for cost of insurance. This is what you're paying for this. This is what you're paying for that. And it's there. And yes, carriers can cook illustrations to make them look better. But when you get those expense pages, that's what it is. I mean, it could go up or the rate of return, you know, might not be what it w what they expect it to be. So your, your cost and charge could go up as the net amount of risk goes up, et cetera. But, but the reality is there is some value there for administration. The bad thing is that when, when we use it for marketing, you know, as bad as soon you paid, you take one policy and you put it next to another policy illustration. Um, and the reality is that the top carriers selling products kind of have policy illustrations that you could kind of tear apart and say, this isn't, you know, this wasn't going to happen. This wasn't going to happen, but, but that's what sells. And that's, that's the problem with the industry today. And that's why people like Barry, who can tear things apart and have their alytic. I mean, that's, that's a resource for advisors today to take a look at what's really going on inside reef policy. Fantastic.

Speaker 4: 21:42

Well, my perspective on that is it's not just the rate of return or the interest rate or whatever, you know, people say, well, you know, it says 6% or six and a half or eight or whatever that percent is. And even if you just take the projection, your cash value is not earning that. You know, again, that was something that I had to learn. I had clients ask me the question and it's because there's another moving part. And that's the cost of insurance, you know, barriers. You said your premiums, not the cost, it's what they take out of your premium and, or, you know, the accumulated cash value over time. And just reflecting back into the nineties, because I got in the business in 91, and I watched the older partners in the practice that I joined having to manage some early universal life policies blowing up when interest rates fell through the floor in the early nineties. But the takeaway that I had from that, it wasn't the drop in interest rates. It was the increase in the insurance charges, right? We can, we can model, I can, I can put in different interest rates, uh, in an Excel spreadsheet. I don't know what kind of insurance charges to put in. I mean, that's, I, I'm kind of asking you guys the question in that the biggest, maybe not the biggest, but that's the hidden issue.

Speaker 2: 23:17

I think it's both biggest and biggest and had Morningstar publishes a study every year, uh, that, that concludes that costs are the most, um, uh, the greatest determinant of long-term performance is costs high costs, adversely affect long-term performance, low costs add to long-term performance. The costs inside life insurance are a multiple of the cost inside of mutual, uh, mutual or life insurance products are not immune to the forces of modern portfolio theory and investment. I mean, so costs are both hidden and the most significant determinant of long-term performance.

Speaker 3: 23:59

And, and let's, you're speaking to a bill there is that, you know, what most people don't understand is in the universal life chassis product. Well, I mean, any product, your cost of insurance is not based on the deathbed, but if you have a million dollar death benefit and 300,000 of cash value, you're being charged on 700,000. So the double-edged sword is that when you have a policy where you projected an 8% in guardian, you got a 6% return. Now, as your cash value drops, your cost of insurance is going up and it's a sidebar. And that goes back to why I wanted people to understand it's an Excel spreadsheet, because you could sit down. And, and one of the, um, when I first got into business, one of the big issues that the old timers talked about, better you talk about the rate books and everything. They say the biggest problem with life insurance was computers. You get shut down with computer and you can make something look good, or you can play with that premium to get it, to go to age one 20, where if you drop it a dollar, it crashes at 92. I mean, you could literally play with this kind of stuff like that. And so people have to understand that, you know, in an Excel sheet analogy, those two, those two issues, those two variables of rate of return and how it affects that cost of insurance. And w when you, when you are looking at taking the policy out, what is that rate of return and what does the expectation for that rate of refill and going forward? So the one thing I can say that's good now is that, you know, knock on wood. Um, we are in, we're in a rate of return, uh, for fixed products that can't go much lower, right? I mean, we keep saying that and they seem to at least make them go even lower, but, you know, coming out of what you were talking about, bill, rate's a little high and whopping, hopefully we're going to see some sort of uptick a little bit in the year. They'll take a little bit of pressure off the ball it's been bad for, especially for the last 10 years interest rates, interesting genes.

Speaker 4: 25:58

I just had a client ask me to review his life policy. He still wanted and needed the life insurance, but we were looking at long-term care planning. And would we maybe use the cash value and, and transfer it into a life policy? You know, what was maybe available in the life policy? Should he buy another one? And one of the things that jumped out at me was he was at the guaranteed minimum interest rate. And, and he, he got a current Inforce illustration, and it was 4%. Yeah. Now when he bought it in 96 or something, you know, it was like, Oh my gosh, I hope it never goes to 4% and laughed. He and I laughed together and said, you know, it's at the minimum, but thank God, it's 4% and not a half a percent. Right. So, you know, there's some, there's some interesting, uh, things that have changed in the last 12 years, particularly as you said,

Speaker 3: 26:59

It was another world. Yeah. Another world.

Speaker 1: 27:04

So it is as we move forward. Um, you know, one of the things we talked about earlier is there's a greater trend for insurance companies to be offering the hybrid life insurance long-term care insurance policies as those grow, how are those going to impact Inforce illustrations and the policy analysis? What trends are you guys seeing with that? Or how are you looking at that for the future?

Speaker 4: 27:34

Well, let me maybe Barry tee you up because there's some questions about analysis. I don't think I've considered yet, but this is this, there's a, uh, there all kinds of terms hybrid, linked benefit combo, and there's no standardization. So consumers need to know if you're being told, Hey, by this wonderful combination of life and long-term care or it's hybrid, or it's asset based, there's four or five different models. Some of them are 100% guaranteed benefits and premium some, uh, and, and in fact, the ones that are really exploding in offerings are these chronic illness, writers look, act, feel definitionally, like long-term care insurance, but they're built on non guaranteed universal life or non-guaranteed premium chassies. And even the benefit itself for long-term or chronic illness is not knowable upfront. It's, it's, it's a backend, you know, they say, Oh, it's a free rider. We're not charging you for it upfront. Well, if you're expecting to accelerate your$400,000 death benefit and you need care at 75, you might only get to accelerate half or less. So now here's what, I don't know what I don't know. I can see from a contract, these problematic, unknown non-guaranteed elements. What I don't know is will accompany drive up the universal cost of insurance if they're having to accelerate more than they expected when they tagged on these living benefits, writers upfront. And I think that's a, I think that's a critical question to be kind of asking ourselves in the industry, but clients, if you want to know what your benefits going to

Speaker 3: 29:42

Be, you gotta buy something that's guaranteed and it's hard to,

Speaker 2: 29:47

Yeah, I would agree. Uh, I mean, Michael said earlier that people don't understand the life insurance product, and then you add an additional layer of complexity. Um, so I've been in the insurance business since I was arguably 19 years old. You actually could say I've been in the financial services business since I was at the age of seven, when my dad was helping me read the wall street journal in the back of a bus on a church retreat. Right. But, um, long-term care and chronic illness, uh, the, the disparity in the benefits is enormous. Uh, it is not, you know, it is not one size fits all. Um, you know, I think the, the life insurance, uh, in the same way that, uh, clients have a better chance of understanding their investment portfolio, because they can get a Morningstar report and they can understand that they're being charged better or worse than average, they can, they can understand whether they're getting better or worse than performance. You can understand pretty easily, uh, with a paralytic report or by working with a very political advisor like Michael, whether or not your policy is fairly priced and whether the port performance is reasonable and contractually, you know, if you're very, very pale and not breathing the benefits pay. Uh, so th that, one's the contractually speaking that one's pretty easy on the long-term care side, uh, having been in the insurance business a long time, I struggle with the, the combinations and permutations of benefits on long-term care versus chronic illness, activities of daily living versus reimbursed. I mean, it is, I think, I think listeners really need to have help if financial advisor in that area, even more so than just life insurance.

Speaker 3: 31:41

And I, and I think that the one thing that I've learned from the fiduciary world is, and I mentioned this before briefly, if you don't understand it, find somebody who does. So if you're a life insurance person like me, and you're getting into these, the, that might be over your head, and then you need to reach out to somebody like bill. And that is part of the whole fiduciary responsibility or best interest, because there's no way that you can suck. You can serve your client if you don't have the knowledge. And, um, you know, that's one thing that people need to understand. I think it's happening more and more in the world today that people are specializing more and then, you know, creating informal alliances with people and referring business back and forth. And that's a, that's a very good thing because a lot of this stuff begins, forget about the management. I mean, a lot of this starts, it starts at the beginning. Does the client know that they bought, do they think this is, and it's not, I could tell you too many times I talk on the phone with grand tours and they all, Oh, well the agent said, blah, blah, blah. And, you know, I, if the agent really said that, and that's a terrible thing, but the reality is a lot of people don't remember what was said at the tails table. So, you know, it, it's, it's something that we have to be aware of if we're at the point of sale up to make sure that the client understands everything and maybe even put that down on paper. I mean, that's, that's the other thing I learned from the totally world that I always thought trustee is my policy comes in, put all the caveats, all the nuances about this policy down on paper, have that granular shine it because, you know, things get murky 20 years down the road when that policy should be paying off and it's not. And so for any of us who are out there in the marketplace, documentation is a key and it covered us. And it also helps the client

Speaker 4: 33:36

Just, I mean, Michael did touch on what you were saying. Clients need to know what they're buying. I will tell you because it is my industry, my experience, I care about it. I dig into it. There are many agents who don't know what they're selling in this long-term care, critical illness space. They don't understand it. And in it's, and that's worse now, that's maybe not a fiduciary, but I'll tell you, I have worked with clients who their fiduciary money manager is only allowed by their broker dealer or their relationships to represent two companies for longterm care. And they're both a certain type of policy and there's three other, four other types of policies out there that, that advisor can't talk about. So again, I I'm with you because that's, my business is I partner as a specialist with folks who don't have the specialty. Um, but you have to be able to look at the market. If you're doing investment management, you gotta be able to look at the marketplace of investments. Um, and, uh, so anyway, that's my little niche here, Tony, that's I think growing as an issue related to this discussion, we're having

Speaker 1: 35:08

Fantastic. And that's a great discussion. I mean, it's so interesting that we could go so many different ways with that. Uh, but you know what, fortunately, we have to wrap up the conversation. I think we could probably talk for hours on this, uh, is what are the number one tips for people for selecting and managing a life insurance policy and also a life insurance slash long-term care insurance policy. I'll

Speaker 4: 35:38

Start, and then let the guys who are the experts on managing, um, kind of pick up the detail there. I think the number one thing, if you're buying long-term care insurance or have an interest in having a benefit like that, be part of your portfolio or part of your insurance, you have to work with someone who represents all of the different types, because otherwise you will not get a fair comparison. So it's, it's making sure you're exposed to and being educated, you know, from as much of a non-biased place as possible, what all of those options are. And then the managing of that is, is another step. But it, it picks up on many of the same things that we're touching on. And that's Michael and Barry's expertise.

Speaker 2: 36:35

Yeah, I would say, uh, three things. Uh, so it was first, I would echo Bill's comment that the long-term care side is complicated. I think it's beyond, uh, most consumers, uh, natural ability to navigate by themselves. And, and, uh, it really need an advisor. Um, from a life insurance perspective, you got to understand three things. Uh, you have to understand what's being charged inside the policy. And is it fair? You got to understand what the performance that's required to meet your expectations, and is that reasonable, uh, and are those performance expectations consistent with your risk profile? So costs, performance, and risk consumers have to understand that, um, they either can, uh, get those spreadsheet pages that Michael was talking about. Uh, if there are, if there are do it yourself or you get those expense pages and you'll look at them and you compare those expense pages, uh, or you work with, uh, a very political adviser like Michael, or you get a paralytic report or, or insist that your financial advisor give you a paralytic report. We used to give Morningstar reports with, as, as support for all of the investment recommendations we give, it costs the consumer, nothing to say, Hey, look, you know, you say, this is the best. There's this service out there called paralytic. You know, it's not a rounding error on the commission statement of some of the insurance agent. Can I get a paralytic report just to make sure that what I'm getting is what I think I'm getting. So those were the cost, performance and risk. However you get it, get those three things. What's the cost, what's the performance, and what's the risk.

Speaker 4: 38:21

And Tony, I'm gonna take it from a little bit different perspective that just working with a client and having them select a policy type. Um, I like to break it down to here's the different types of characteristics and these different types of policy, welcome to the different types of policies. And then focusing

Speaker 3: 38:36

On the premium flexibility is it required, or it flexible, um, and, and talk about their investment risks. And that's kind of, um, goes hand in hand with cash value. We need cash value or not. And then the last thing is the death benefit guarantee. Do you need a debt parent, if you want a death benefit guarantee or not. And then I'll focus in on what Barry's talking about as the cost of that particular policy. Once we've gotten to a discretion of the type of policy that works for them. And then the last thing I'm gonna throw in there about getting a life insurance policy, which is critical, and it's not talked about as much as it should, is the underwriting preparing your, you know, today we have accelerated underwriting, which is fantastic. If you're 24 years old or you're healthiest can be, most of our clients are not. As a matter of fact, I, I read about these accelerated underwriting and I, and I'd like to get more of those clients because it's not been that easy to get people through underwriting, but, you know, making sure the client understands the pyramid, they ensure the client, you know, um, is, is ready for that pyramid. And making sure you have a good underwriter working for you and your client that can go through those health records and really paint the best picture for the client. Because as Barry knows, um, you know, cost being equal, a standard, not smoker is going to pay more than a preferred non-smoker and you want your clients to be preferred non-smokers the Asians have, uh, uh, you know, often will quote and preferred non-smoker rate because a little cheaper, but getting your client a preferred non-smoker rate is, is extremely important. So those are the ways that I would focus on it, but I, I do agree with Barry that the cost side understanding the cost underlying the policy is hugely important.

Speaker 1: 40:28

Fantastic. Well, thank you for joining me today. I think the key takeaways obviously are asking questions, uh, finding out more, taking a look at the actual expenses of the policy. Is there anything else to summarize the episode that you guys would like to add bill? Uh, anything you want to add to that?

Speaker 4: 40:52

No, I, I think, yeah, I, it, it it's, it's not just upfront and that's one of the things that you all have brought me back to in our discussion that led to this podcast today, looking at the policies every year, critically, if there are moving parts, if they're non-guaranteed parts you have to, as a client, as an advisor, uh, stay in engaged with that over time. And I think that's just so important and absolutely

Speaker 1: 41:26

Any last words, Michael or Barry,

Speaker 4: 41:29

If you're a financial advisor,

Speaker 1: 41:32

Uh, you can get a

Speaker 2: 41:34

Complimentary paralytic report, uh, putting, get ready, exclamation you go just Google complimentary paralytic report. The link to our website for complimentary or paralytic report will be at the top of the, of the Google page, or just go to the www dot[inaudible] dot com. And you'll see a link for complimentary paralytic report and just put in, get ready as the, uh, promo code code. And you can have a report on me to figure out how, uh,[inaudible] might be able to help you with, with your clients. Um, uh, do some of the things that we talked about here today.

Speaker 1: 42:14

Well, thank you so much. And, um, I'll be sure to, uh, put that in show notes for our listeners and along with links to Michael's website and book, Bill's a website and podcasts to Barry to your website. Um, and thanks again for joining me today. This has been a fantastic discussion. It's been a pleasure. Thanks.

Speaker 2: 42:35

Always fun, Tony,

Speaker 1: 42:38

And thank you everybody for listening or watching to this episode. Um, and till next time,