Author Archives: Kellan Finley

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About Kellan Finley

Kellan Finley is an insurance expert & Managing Director of Insurance Decisions.
EMAIL: kellan@in4fa.com
BIO: About Kellan
PHONE: 212.920.3470

Insourcing vs. Outsourcing: Become the Ultimate Advisor
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Authored by , re: Insurance, on .
Insourcing vs. Outsourcing: Become the Ultimate Advisor |  Kellan Goldberg

{3:20 minutes to read} The scope of what an advisor does is mind boggling. Essentially, they are small business owners with an endless list of responsibilities and clients who have unbelievably high expectations. It is impossible to accomplish all of the daily tasks alone and do them well, but advisors are almost forced to do so because clients and regulators expect this of them. So how can an advisor stay on top of everything while maintaining a healthy balance in their lives?

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The Cost of Waiting to Review Insurance
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Authored by , re: FINANCIAL ARTICLES, Insurance, on .
The Cost of Waiting to Review Insurance | Kellan Finley

{4 minutes to read} When reviewing insurance needs - whether it’s life insurance, disability, long-term care or even annuities - advisors need to consider possible costs in delaying a regular review of their client’s products. There are two main costs of waiting that are commonly understood:

  • As clients get older, premiums go up. Waiting until a year or two to make the same change to insurance will result in higher premiums. While these costs will not increase astronomically, premiums are always a consideration.

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Sustain Your Future With Long Term Care
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Authored by , re: FINANCIAL ARTICLES, Insurance Related, on .
Sustain Your Future With Long Term Care | Kellan Finley

{Time to Read: 5.5 minutes} Long term care insurance is a hot topic. It is designed to protect against asset depletion when a person is deemed unable to perform two of the six activities of daily living, such as bathing and eating. We believe the increased interest for long term care insurance is from personal experience. Many people in their mid-40s to mid-50s have recently seen the reality of long term care needs with their parents. The challenges of coordinating care for a parent are only compounded when there are limited funds to pay for the necessary care. However, despite the realities of long term care needs, there remains a sizeable gap in the public’s perception of long term care.

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A Great Policy Requires More than Just Adding Numbers
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Authored by , re: FINANCIAL ARTICLES, Insurance Related, on .
A Great Policy Requires More than Just Adding Numbers | Kellan Finley

{2:05 minutes to read} Insurance should never be sold in a vacuum. It should always be evaluated in terms of the broader, holistic picture of a client’s financial plan. In the typical and traditional sense of selling insurance, an agent will often look at what someone qualifies for versus what they need. Case Study: A married couple ages 49 and 52. The husband earns $350,000 a year, and the wife $200,000 a year. Determining what this couple qualifies for from a life insurance perspective is usually based off of income replacement:

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Efficiently Running Your RIA
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Authored by , re: FINANCIAL ARTICLES, Insurance Related, on .
Efficiently Running Your RIA | Kellan Finley

There have been several articles recently that all speak to the need for better-run RIAs. One article in Private Asset Management examined a major trend: Wirehouse advisors, or other types of independent advisors, moving into the RIA space. According to the article, over the last 8 years: There has been an increase of 25% of advisors into the RIA channel. At the same time, there has been a 21% decrease on the wirehouse side.

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New Service Offered: Policy Diagnosis
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Authored by , re: FINANCIAL ARTICLES, Insurance Related, on .
New Service Offered: Policy Diagnosis | Kellan Finley

When it comes to insurance, many advisors do not review their clients’ existing policies to make sure that they are working appropriately, premiums are being paid on time and there are no excess loans - all of the things that are pertinent when reviewing a client’s policy. Even if an advisor is licensed and sells insurance, they generally only review policies that they have sold, and not the policies that were written years ago.

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Year End Review and Preview
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Authored by , re: FINANCIAL ARTICLES, Insurance Related, on .
Year End Review and Preview | Kellan Finley

It’s that time of year when people say, “It’s that time of year.” Full of holidays, shopping, and holiday parties, the end of the year is also a time when businesses and individuals reflect on what has happened over the last 12 months. We resolve what we need to change in the new year, and then plan for what we want to execute moving into 2015.

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Opportunities to Consider as We Close 2014
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

The end of the year is a time when people tie up loose ends. If a client has been thinking about obtaining life, long-term care or disability insurance all year, the end of the year is a natural prompt to remind them to get it done before December 31st. Despite the rushed time-frame, there are considerable advantages to obtaining an insurance plan towards the end of the year. Many insurance carriers become more lenient on underwriting due to the fact that they want to meet a yearly production quota.

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Lessons Learned: The Importance of Due Diligence
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Clients with medical issues can be well-served if they trust us.

An added value to our firm’s service is that we have the capacity to take advantage of the market and procure the right insurance carriers for the client - even if they have a series of medical issues. Take the following two examples of our ability to leverage the marketplace in order to find good solutions for people.

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What Is Trust Owned Life Insurance and How Can You Make Sure Your Policy Is in Good Shape?
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Trust Owned Life Insurance (TOLI) is insurance that resides inside a trust. It enables the trust to provide money for survivors to cover estate tax planning and distribute inheritances among heirs. As with any trust, there must be a trustee who is responsible for managing the trust’s assets and ensuring its continued vitality.

In the case of a TOLI, a trustee is usually one of the following:

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Failing Policies – What Causes This? Part 3 of 3
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Many clients recognize the benefits of using life insurance as an investment, but they can be sold on this premise with optimistic assumptions - which are often at odds with reality.

  1. Cash values will increase every year with optimistic market performance.
  2. Eventually premiums can be discontinued and investment performance will maintain the policy.
Those assumptions are made primarily when dealing in variable policies, but universal life and indexed universal life policies are also subject to this kind of rose-colored thinking.

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Failing Policies – What Causes This? Part 2 of 3
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

When someone buys a life insurance policy, the amount owed in premiums is determined based on a combination of several factors. The most significant considerations include:

  • Policyholder’s age, gender and health
  • The type of product being purchased
  • The assumed economic growth of the policy over time

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Failing Policies: Causes and Solutions Part 1
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

When we review existing life insurance policies for the clients of our RIAs, we find that certain plans are failing and at risk of lapsing prematurely. There are generally 3 main causes for this:

Reason 1: Loans and withdrawals taken against the policy.

Reason 2: The premiums were not paid as they were supposed to be.

Reason 3: Assumptions that were made when the policy was sold were too optimistic.

In this article, we will explore loans and withdrawals.

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Why Breakaway Advisors Should Entrust Us With Their Clients’ Insurance Needs
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Advisors who work for large wire houses typically give almost half of their revenues to their employers. In exchange, they do not have to worry about paying for office space, marketing costs, or any of the other bills that typically come with running their own businesses.

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Are Your Clients Outliving Their Life Insurance?
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Due to a more health-conscious society and recent advances in medicine, Americans are living longer. While it used to be unusual for a person to reach their 100th year, such longevity is becoming more commonplace. This is great news, but it does push some questions about life insurance to the forefront.

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A Case Study in Long-Term Care Coverage Options
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

A New York-based Registered Investment Advisor who specializes in financial planning and investment management, and manages $180 million in assets, recently asked us to review and evaluate a long-term care (LTC) policy that a client had purchased. The client, a 65-year-old man, had purchased the policy in 2012.

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Decoding Insurance Jargon
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Clients are often confused by many of the terms stated within their insurance policies. To help, here are some of the most commonly used insurance jargon they are likely to encounter, and how to clearly explain what each of these really means:

  • Modified Endowment Contracts (MECs):Before 1987, it was possible to place large amounts of money into a life insurance policy which would grow tax-deferred. If the money in the policy was ever needed, it could be accessed through tax-free withdrawals. These policies were being used in place of other investment vehicles which were fully subject to taxes. The government has since changed the system and closed this loophole. Luckily, your policy is still subject to essential tax benefits as long as it does not turn into a MEC. In order to become classified as such, it would need to become extremely “over-funded.” This is a problem most people can easily avoid.

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A Case Study for RIAs: Why it Pays to Have Your Clients’ Insurance Plans Reviewed by an Expert
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

A Registered Investment Advisor based in New York City who caters to high net worth individuals with a total of $290M AUM, recently referred a client to us for a thorough review of his insurance portfolio to ensure that he was being adequately covered.

The client was a 44-year-old CEO who was married with 3 children. His annual income was approximately $400,000, and he had a net worth of $3 million, $1.8 million of which was from the value of his house.

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Long-Term Care Expenses Tops the List of Investor Worries
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

A recent study by UBS Investor Watch found that the inability to afford long-term care costs was one of the 2 biggest concerns that investors have regarding their financial futures. These results highlight why Registered Investment Advisors (RIAs) need to be well versed in long-term care costs or armed with knowledgeable resources to address these concerns. Clients are concerned, and while they may be able to articulate the problems, most do not know what solutions are available.

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Insurance is Not the Problem, But it May Be the Solution
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

People don't like to think about life insurance, disability or long-term care. Perhaps it is because the benefits of such insurance policies are only seen when something unpleasant happens - but it is in both your clients’ best interest, as well as your own, to be covered for life events that are inevitable.

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Don’t Assume Your Clients are “All Set” with Their Insurance Needs
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .
Don’t Assume Your Clients are “All Set” with Their Insurance Needs | Kellan Finley

Many Registered Investment Advisors (RIAs) seem to think that as long as their clients have some form of insurance coverage in place, there’s no need to regularly review their policies or update them. This could not be further from the truth.There are clients who could be getting more affordable coverage and others that have older, outdated policies which no longer fit their current needs.

Recently, an advisor contacted us, asking us to review a policy for a client. It was a universal life insurance policy, and he wanted to verify that it was still a good plan.

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Generational Wealth Transfers: How to Keep Your Clients
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

Financial advisors often run into problems caused by generational wealth transfers.

Traditionally the head of household was in charge of finding an RIA to help him or her make important financial decisions for the family. A problem arises, though, if the head of household dies; if there is no relationship tying the remaining members of the family to their financial advisor, they are likely to seek out their own. That is why it is in the best interest of an RIA to know everyone in the family he or she represents, and to form a relationship with each member.

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Early Predictions in the Insurance Market for 2014
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Authored by , re: FINANCIAL ARTICLES, Financial Planning & Insurance, Insurance Related, on .

With the New Year upon us, now is an opportune time to look at how major insurance vehicles performed in 2013, and how our experts think they will perform in 2014.

Annuities

In 2013:

  • Indexed Annuity sales were up 15% from the previous year.
  • Fixed annuity sales were up 35%
  • Variable annuity sales were down 3.3%.

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