Getting Independent Contracts Directly or Through Imo

[diesel]

I am gathering data to begin a career providing final expense benefits to clients. I do not have a current client base to work from and my vision to door knock initially. I have found some good information on door knocking strategies, uncovering the need and offering a solution on the posts.

I still have plenty of questions...Do you need to be a funeral director to offer a funeral trust with the final expense policy? I am naive about the specifics of a funeral trust, can someone explain the difference between offering a funeral trust funded by a whole life policy and offering the whole life policy by itself?

What is the benefit of going through an IMO rather than getting a few appointments directly? ( for instance getting appointed directly with monumental, foresters, standard life and accident, settlers...) or is that not possible anymore?

 

[rousemark]

I am gathering data to begin a career providing final expense benefits to clients. I do not have a current client base to work from and my vision to door knock initially. I have found some good information on door knocking strategies, uncovering the need and offering a solution on the posts.

I still have plenty of questions...Do you need to be a funeral director to offer a funeral trust with the final expense policy? I am naive about the specifics of a funeral trust, can someone explain the difference between offering a funeral trust funded by a whole life policy and offering the whole life policy by itself?

What is the benefit of going through an IMO rather than getting a few appointments directly? ( for instance getting appointed directly with monumental, foresters, standard life and accident, settlers...) or is that not possible anymore?

You do not need to be a FD to offer either. The FT has nothing to do with the insurance policy, it is simply a legal instrument to protect the proceeds from certain creditors. The insured turns over ownership of the policy to the trust so it is not counted in thier estate.. useful for medicaid spend down. Don't know about the other companies but Settlers supposedly is not offering direct contracts at this time. Newby is a Settlers guy and a top notch agent but I don't know if he recruits in PA or not. You might try contacting him.

 

[diesel]

Ok thanks, I really was curious if there are agents providing this service ( FT) to their clients and what value a FT has over a Final Expense policy. I understand a trust would serve to protect cash value of life insurance (if that was used to fund the trust), and maybe lock in a guarantee rate of growth to the funds in the trust. But $10,000 whole life policy issued at age 64 is not going to be accumuating much cash value is it? I really dont see the value of a funeral trust for those reasons so that is why I say I must be naive about how and when to use it.

 

[alfie]

I did find a very good summary of how Medicaid treats insurance policies with CV and what guidelines Medicaid gives for setting up FT posted by Newby in another thread...

 

[Newby]

Ok thanks, I really was curious if there are agents providing this service ( FT) to their clients and what value a FT has over a Final Expense policy. I understand a trust would serve to protect cash value of life insurance (if that was used to fund the trust), and maybe lock in a guarantee rate of growth to the funds in the trust. But $10,000 whole life policy issued at age 64 is not going to be accumuating much cash value is it? I really dont see the value of a funeral trust for those reasons so that is why I say I must be naive about how and when to use it.

The funeral trust makes the policy exempt from Medicaid IF it is used to pay for funeral expenses. And amount of the policy that is NOT used to pay for a funeral is lost to Medicaid.

It's no big deal for an FE agent who is door knocking. You might find some who are on Medicaid that would benefit from it. Most aren't.

The policy is the same either way. Anyone can assign any FE policy to a funeral trust for free anytime they need to so buying it with the policy in advance is not really wise and in some states doesn't even hold up legally. It's mostly a marketing gimmick.

 

[diesel]

Thanks for the advice. Not that I am an expert on marketing, but I am looking for ways to enhance my ability to get referrals. It seems there are more effective ways to add value to the process than offering a funeral trust.

 

[ScottLFB]

Newby's right on the assignment. Another thing you mentioned was a 64yr old with a $10K policy not having accumulation potential.. That's not always true, depending on the FT you can give them (the agent chooses) from .5%-3% growth in their policy. Right now that's better than a CD.. While assigning the FE policy to the FT down the road is an option, if you're looking to create policy with more than the $10-15K FT max use the Estate planning Trust so it has time to pass the 5yr lookback..

 

[Todd King]

Diesel, to answer your other question about having to go through an IMO, most of the companies won't contract direct anymore. You should find an IMO (one or more) that is a fit for you. Be careful of the captive type IMOs that want to give you the lower contracts in exchange for them subsidizing leads.

Now, I'm just saying, "be careful". I'm not saying don't go there. You are the one who will have to decide what you need in the way of training, lead support, etc. You will trade points on your contract for those things one way or another. Not always a bad thing for a new agent, but you should know about that.

 

[MO knight LIFE pro]

Hey guys,
So, I am a final expense agent and I am a bit confused. What is the deal with medicaid taking cash value or policies? If this is info that I could be providing at pos I'd like to be prepared. MAny of these poor old folks just have no clue.

 

[Newby]

Hey guys,
So, I am a final expense agent and I am a bit confused. What is the deal with medicaid taking cash value or policies? If this is info that I could be providing at pos I'd like to be prepared. MAny of these poor old folks just have no clue.

Medicaid allows a maximum of $2,000 in countable assets in most states. The cash value in life insurance is a countable asset.

If it's small policy for funeral expenses, they can irrevocably assign it to a licensed funeral home. Medicaid allows that and there is no look back period on it. It is exempt immeadiete.

If it's a large policy, they have problems. They can 1035 it into a funeral trust policy but will lose a lot of benefit if they do that. Any amount in a funeral trust that is not paid to the funeral home or cemetery will be lost to Medicaid after they die.