Welcome to Welcome to The Estate Planning Council The Estate Planning Council

of the Fun Coastof the Fun Coast

Due Diligence in Due Diligence in Recommending the Recommending the

Correct Life Insurance Correct Life Insurance PolicyPolicy

Presented byPresented byMichael W. Halloran, AEP, CLU, Michael W. Halloran, AEP, CLU,

ChFC, CFPChFC, CFP®®

March 4, 2008March 4, 2008

Establishing the Need for Establishing the Need for CoverageCoverage

NeedNeed

Temporary Temporary need – term need – term insuranceinsurance

Permanent – Permanent – Continuing needContinuing need

Permanent or Continuing Permanent or Continuing NeedNeed

Whole lifeWhole life Variable lifeVariable life

– Mortality and Mortality and expense costexpense cost

Universal LifeUniversal Life– No guaranteesNo guarantees– Secondary guaranteesSecondary guarantees

i.) Mortality Tablei.) Mortality Table

ii.) Company Financial Ratingsii.) Company Financial Ratings

iii.) Guarantees and Problemsiii.) Guarantees and Problems

iv.) Purpose of Cash Valueiv.) Purpose of Cash Value

Variable Universal LifeVariable Universal Life– Investment riskInvestment risk

Amount of CoverageAmount of Coverage

EstateEstate

BusinessBusiness

CharitableCharitable

Understanding the Policy IllustrationUnderstanding the Policy Illustration

– Pro forma

– Product Illustration

NAIC Illustration Product enhancements (non-guaranteed) Current experience Past history Current scale vs. portfolio method Third party references

Professional Liability and Professional Liability and DisclosureDisclosure

Who are you liable to?Who are you liable to?– PolicyownerPolicyowner

– InsuredInsured

– BeneficiariesBeneficiaries

What happens if your What happens if your recommendations arerecommendations are wrong?wrong?

How can you limit your liability?How can you limit your liability?

Rating AgenciesRating Agencies

A. M. BestA. M. Best

FitchFitch

Standard & Poor’sStandard & Poor’s

Moody’sMoody’s

RatesRates

MortalityMortality

Expenses chargesExpenses charges

InterestInterest

– Investing longInvesting long

– Investing short Investing short

Go Noles!Go Noles!