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Valuable 1035 Exchange Sales Ideas

Valuable 1035 Exchange Sales Ideas

Join us for an informative and professional online event as we explore powerful 1035 exchange concepts that can supercharge your sales and benefit your clients simultaneously. Our esteemed speaker, Michael Sato, CLTC®, LUTCF®, FSS, Brokerage Manager, will share his extensive expertise and guide you through a range of valuable strategies.

Who Should Attend:

  • Insurance advisors looking to enhance their sales skills through 1035 exchange strategies.

  • Professionals seeking to maximize their client relationships and provide tailored solutions.

  • Anyone interested in staying informed about the latest industry updates and trends in 1035 exchange sales.

View the 1035 Exchange Webinar & Materials
Michael

Speaker: Michael Sato, CLTC®, LUTCF®, FSS

With a proven track record in the industry and a wealth of knowledge in 1035 exchange sales, Michael Sato is an esteemed expert who understands the nuances of the market. His guidance will equip you with the tools needed to stay ahead of the competition and secure long-term success for yourself and your clients.

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Webinar Overview:

Three sales ideas were presented during the meeting:

  1. Repositioning a failing Universal Life (UL) policy with cash value into a cash value or annuity policy, allowing the client to receive tax-free withdrawals.
  2. Moving cash value from one life insurance policy to an asset-based hybrid long-term care (LTC) policy, offering tax-free withdrawals for long-term care needs.
  3. Utilizing a qualified long-term care annuity to make tax-free withdrawals for long-term care expenses instead of using taxable annuity withdrawals.

The meeting emphasized the importance of understanding the client’s situation and finding opportunities to leverage existing policies for their benefit. It was also highlighted that certain hybrid products like Annuity Care Two might offer tax-free withdrawals for long-term care.

Revitalize Your Life Insurance: How 1035 Exchanges Can Transform Your Coverage

Revitalize Your Life Insurance: How 1035 Exchanges Can Transform Your Coverage

A 1035 exchange is a great option for individuals who already have life insurance and are looking to make changes or upgrade their policy.

 

This type of exchange allows you to transfer cash values from one life insurance policy into another without incurring any taxes. In addition, it can also be used to move funds from an annuity contract to another.

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Benefits of 1035 Exchanges

One of the main benefits of a 1035 exchange is that it can help you save money on your premiums by consolidating existing policies. By transferring existing cash values into a new policy, you can benefit from lower premiums as well as possible additional coverage options depending on the insurer. Additionally, if you choose investments within your new policy, you may even be able to grow your wealth over time with the right approach.

How a 1035 Exchange Works IRL (In Real Life)

To illustrate how a 1035 exchange works in real life, we’ll talk about Cindy, for example.

Cindy was a savvy investor who wanted to make the most of her money. She had heard about a 1035 exchange and wanted to know how she could use it for her life insurance policy. After doing some research, Cindy realized that this type of transaction would allow her to move funds from an existing life insurance policy into another one without incurring any tax liabilities on the earnings.

As Cindy immersed herself in the intricacies of a 1035 exchange, she soon realized its remarkable potential. This unique opportunity would enable her to transfer funds from her existing life insurance policy to a new one, all while decreasing tax liabilities on the accumulated earnings. The implications of this revelation were immense, as Cindy saw it as a way to preserve her wealth while making strategic adjustments to her coverage.

The ability to transfer her cash values to a more suitable policy presented her with the chance to secure additional benefits and explore potentially higher returns on her investments. She understood that through a 1035 exchange, she could unlock access to new coverage options, lower premiums, and enhanced investment possibilities tailored to her long-term objectives.

In Cindy’s story, the power of a 1035 exchange revealed itself as a transformative tool, propelling her closer to her financial aspirations. Through meticulous research, strategic planning, and the guidance of professionals, Cindy’s journey showcased the immense potential of a 1035 exchange to empower individuals like her to make informed decisions and unlock a future filled with financial abundance.

Important Considerations on 1035 Exchanges

When contemplating a 1035 exchange, several important considerations should be taken into account:

  • Tax Implications

    • While a 1035 exchange allows for tax-free transfers of cash values from one life insurance policy to another or from an annuity contract to a new one, it is essential to understand the potential tax consequences. For instance, if you cash out your existing policy instead of exchanging it, you may be subject to taxes on any gains or accumulated interest. Consulting with a tax professional or financial advisor can help you navigate the tax implications specific to your situation.

  • Timelines

    • It is crucial to be aware of the timelines associated with a 1035 exchange. Different insurance companies may have their own specific requirements and deadlines for initiating and completing the exchange. Missing these deadlines could result in a taxable event. It is advisable to communicate with your insurance advisor and coordinate the exchange process promptly to ensure a smooth transition.

  • Policy Suitability

    • Before proceeding with a 1035 exchange, carefully evaluate whether the new policy aligns with your current and future needs. Consider factors such as coverage options, premium costs, death benefit, cash value growth potential, and any additional features or riders offered. Assessing the suitability of the new policy in terms of your financial goals and circumstances is crucial to ensure the exchange meets your objectives.

  • Surrender Charges and Fees

    • Existing policies may impose surrender charges or fees if terminated or exchanged before a specific period. These charges can erode the value of your policy and impact the benefits you receive from the 1035 exchange. Review the terms and conditions of your current policy to understand any potential costs associated with surrendering or exchanging it.

  • Professional Guidance

    • Engaging the expertise of a financial advisor or insurance professional is highly recommended when considering a 1035 exchange. They can provide personalized advice, assess the benefits and drawbacks, help you understand the terms and conditions of the new policy, and guide you through the process. Their expertise can assist you in making informed decisions and maximizing the potential advantages of a 1035 exchange.

By carefully considering these factors and seeking professional guidance, you can make a well-informed decision regarding a 1035 exchange and ensure it aligns with your financial objectives.

Summary: TL;DR (Too Long, Didn’t Read!)

In summary, a 1035 exchange can be beneficial when looking to upgrade your life insurance policy or consolidate multiple policies into one. It provides the opportunity to save money on premiums as well as potentially grow your wealth over time with the right investments. Be sure to take into account any tax implications and timelines before pursuing a 1035 exchange so that you can make an informed decision when considering this option.

Valuable 1035 Exchange Sales Ideas (Webinar)

Tuesday, July 18, 2023 at 9:30 AM

Online event via ZOOM

Join us to learn a few 1035 exchange concepts that can lead to a sale! Use your existing book of business and benefit your client at the same time. Join us for an insightful online event as we delve into 1035 exchange concepts that can supercharge your sales. Michael Sato, CLTC®, LUTCF®, FSS, Brokerage Manager, will share his expertise and guide you through valuable strategies.

 

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Occidental Underwriters of Hawaii, Ltd.
1163 South Beretania Street
Honolulu, Hawaii 96814
Phone: (808) 536-1933
Fax: (808) 527-8810