When it comes to the federal estate tax, a very likely outcome is a doubling of the exemption levels. Such a scenario will eliminate the need for a substantial number of affluent individuals to purchase life insurance to pay estate taxes.
For the wealthy, there are certainly other uses for life insurance aside from paying estate taxes. However, for those agents focusing on the high-net-worth estate planning market, who are smart and proactive, very viable and highly profitable opportunities remain. The key is being strategic and systematic.
To really excel, a life insurance agent needs to be seen as an expert in delivering high-quality life insurance solutions to the very wealthy. If motivated, just about any agent can position himself or herself as a thought leader. By being a recognized authority, the agent is well situated to garner a steady stream of referrals from other professionals, especially trusts and estates lawyers and accountants.
With the proposed changes in the tax code, including the doubling of the exemption levels, those trusts and estate lawyers who are capable and adopt a methodical and targeted approach to business development will have more work at better rates than they likely have the time to handle. The key is to access the extremely wealthy clients of the trusts and estates lawyers who will still need life insurance to pay estate taxes.
For life insurance agents the most effective way to get these astounding referrals from trusts and estates lawyers is to become thought leaders and implement processes such as street-smart networking. Doing so will likely enable them to dominate the market for life insurance to pay estate taxes and probably result in extremely profitable practices.
Those life insurance agents who fail to effectively differentiate themselves – who are not positioned as the experts the wealthy want and the experts other professionals want to work with – are going to most likely have to meaningfully change their business model to even come close to matching the revenues they are presently producing.
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