Case Studies

Annuities

The CPS Annuity Department is a top performer in the industry, with a drive for excellence and innovation; we supply a comprehensive and diverse platform of Annuity products. Our rich expertise and market support ensure you and your clients are taken care of.

Case Study #1
Challenge:
- A client wanted to place $1 million into a retirement income plan and wanted the money to grow at a rate higher than fixed interest rates could offer.
- The Broker thought a securities product with a living benefit rider appeared to be a fit.
- The client liked the idea of their income base growing at 5% with the option to guarantee income 10 years from the issue date.
- The broker feared the client’s desire to ensure that a lump sum was available in case the client wanted to make a purchase or incurred expense larger than the annual income could guarantee.
- The securities product offered great income guarantees, but no protection to the accumulation value in case the stock market performed poorly.
Solution:
- CPS recommended splitting the premium between the securities product and an Index Annuity. The Index Annuity offered a rider with a higher income guarantee and principle protection all while saving the client in product fees.
- Through our continuing education and expertise, CPS was able to educate the broker about other options like this that are available in the retirement planning marketplace to provide a holistic planning approach to ensure the absolute best outcome for their client.
Benefit:
- The client felt secure knowing that the total $1 million would provide greater income, ½ their funds were protected from downside risk and they would save thousands of dollars a year on product fees.
Case Study #2
Challenge:
- A new broker needed help identifying a solution for a client they had been in contact with.
- The client was 65 years old with $210,000 in a non-qualified Annuity with a cost basis of $100,000.
- Even though the client bought the annuity years ago for tax deferral and income, their situation had changed over the years and he started to identify this annuity as an emergency fund in case he needed long-term care. But, the client was worried about the income tax liability incurred by withdrawing the $110,000 in gain from the annuity that would come out first upon withdrawals.
Solution:
- Utilizing recent tax changes that took effect in 2010 from the Pension Protection Act of 2006 (PPA), CPS recommended a 1035 exchange from the client’s old Annuity into one of the few PPA compliant Annuity products.
- The new product better leveraged the client’s assets with an enhanced interest rate, liquidity and tax advantaged withdrawals to offset Long-Term Care expenses should they arise.
Benefit:
- The client benefited with an initial $8,750 of tax free monthly Long-Term Care should the need arise, earned a competitive interest rate, 10% free withdrawals and the option to create a lifetime of guaranteed income if a need for Long-Term Care ever occurred.

Disability Income

The Disability Income Insurance Department at CPS uses a personalized approach in finding new ways of protecting assets from the unexpected. We provide accurate, in-depth product information that is designed to help build and maintain effective solution based plans.

Case Study #1
Challenge:
- Male, Age 38 with family and mortgage earning $80,000 annually
- Because of growing family and monthly responsibilities, his current savings totals 3 months of bills. Needs to protect his income in case of an injury or illness. His co-worker recently lost everything due to injury on vacation even with great health and life insurance.
- Anticipates substantial increases and raises in his near future and throughout his career.
- Currently has Group LTD providing 60% taxable benefits that would only replace 40% of his income after taxes.
Solution:
- CPS Income Protection department proposed an Individual Long Term Income Protection Policy that could be tailored to his needs, guaranteed, and portable throughout his working years.
- CPS was able to secure a simplified issue policy for another $1,600 tax free dollars per month, that would pay him until age 65 years old with no medical exams or tax returns.
- Given the option at no additional cost to be able to purchase larger amounts of benefits each year as his income grows within same policy.
- Protects him in his own occupation so that he has the privilege of getting another job that pays well while still collecting his benefits in full.
Benefit:
- Now has sufficient coverage to meet his monthly financial obligations should he get sick or hurt at an affordable rate.
- He tells all the rest at his company about the short fall in the group plan.
- Broker receives large commission, and renewal for life of the policy.
Case Study #2
Challenge:
- Female Dentist age 43 -Owns Dental Practice with 3 employees.
- Current Overhead costs are $23,000 a month including Business loan used to purchase the practice.
- She is worried if she got sick or hurt and could not work, the loan and expenses would not get paid and she would be forced to close her business.
Solution:
- CPS Income Protection department proposed a Business Overhead Expense policy that would provide her with $23,000 a month after a short 30 day waiting period with benefits payable for 18 months and tax deductible premiums.
- This will allow her to keep her business going while she recovers and she will have a business to come back to. If she is not coming back, she will have a practice to sell that has not depreciated.
Benefit:
- Even if there were a sickness or injury, her business will continue to run and all the business expenses would be paid.
- She tells all her fellow Dentists at monthly fellowship gatherings.
- Broker receives large commission, and residual for life of the policy in force.

Life

The CPS Life Department is here to help create a solid foundation for a lifetime of security. We have a passion for sound, long-term financial planning to offer clients the best options that fulfill their needs.

Case Study #1
Challenge:
- A 70 year-old female client wanted to make sure that her Life Insurance was still the most competitive policy on the market and available when her family needed it most
- Had a $1 million Universal Life policy that was in danger of lapsing in just 7 years based on the guarantees in the contract
- The premium was $13,201 and there was $37K of cash surrender value in her policy
Solution:
- The CPS Life Department collaborated with the agent to come up with a suitable solution
- CPS proposed that the client replace the old UL policy with a new Guarantee Death Benefit UL contract
- We also recommended that she roll over the $37K cash surrender value via a 1035 exchange to the new policy
- As a result, the client was able to use the $37K 1035 exchange to pay the entire first year premium without any out of pocket costs. In addition to paying no out of pocket premium in the first policy year, she was able to reduce her current premium of $13,201 down to $12,162
Benefit:
- The client got a new UL policy that was guaranteed not to lapse for 28 years instead of 7 years, and was able to save 1,039.00 per year on her ongoing Life Insurance premiums
Case Study #2
Challenge:
- A young couple in their mid 30’s had significant Life Insurance needs but no coverage
- They had a 300K mortgage, four children under the age of five and a limited budget
- The agent needed extra help when it came to finding a proper solution considering that his sole focus was Property and Casualty Insurance
Solution:
- CPS reviewed the client’s situation and suggested the following Term Insurance solution. Based on their desire to provide protection for the children and each other, CPS recommended that they purchase two $500K 30 year level Term policies
- The combined monthly Term premium was $115.00 which fit within their budget
Benefit:
- Coverage was secured for the couple with a level guaranteed premium for the next 30 years at a low cost using Term Insurance

Long-Term Care

The Long-Term Care Department has built strategic partnerships with our many carriers, allowing for a diverse portfolio of Long-Term Care options, knowledge of competitive products and services available.

Case Study #1
Challenge:
- Female, Age 57
- Needs Long-Term Care Insurance
- Challenging health history and build concerns
- Client was a Sole Proprietor
Solution:
- Our LTC department proposed an annuity based LTC solution with an unlimited benefits rider for Long-Term Care needs
- Client 1035’d an existing annuity into the new hybrid solution
- In addition to the 100k 1035, the client will make an annual payment of $2,000 per year
Benefit:
- The client received a 100k annuity with unlimited benefits for Long-Term Care
- Client converted their tax deferred annuity into a tax free annuity when used for Long-Term Care Services
- The annual $2,000 payment is treated as a tax deductible expense to the business while still keeping the LTC benefits tax free at claim time

Underwriting

The CPS Underwriting Department evaluates a full range of client attributes to find the best coverage available. Our head underwriter ensures no obstacles stand in the way of finding coverage for your client.

Case Study #1
Challenge:
- 56 year old male
- Seeking 1 million of Term Insurance
- Declined due to his 9/2008 CT scan findings showing a pulmonary nodule
Solution:
- Following the CPS Underwriter’s review of the medical records, we felt the decision to decline on the pulmonary nodule and lung function test results was worth appealing
- Our Underwriter suggested a repeat CT scan and a doctor’s letter providing opinion on these two issues
- The information was obtained by the client, submitted to the carrier as an appeal with a request to reconsider based on the new information
Benefit:
- With the help of CPS, the agent was able to place a difficult case
- The client’s case was approved Standard with an annual premium of $6,140
Case Study #2
Challenge:
- Review a $10 million UL informal case
- 70 year old male
- Had heart surgery in 1997 and treated for chronic vein disease
- Other BGA’s declined client after looking at medical history
Solution:
- CPS analyzed the case, obtained complete medical information and asked our carriers’ Underwriters to look at the case in the most favorable light possible
- Based on our strong relationships, we received several Standard offers from our strategic carrier partner carriers
Benefit:
- This case was placed Standard with one of our A+ carriers with a $419,000 premium

Annuities

Disability Income

Life

Long-Term Care

Underwriting

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