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 7% 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 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 the same income percentage growth factor while also guaranteeing the full premium plus some interest available as a lump sum
• CPS was able to educate the broker about the other options available by knowing which products would suit their client’s needs

Benefit:

• The client felt secure knowing that the total $1 million still enjoyed a 7% growth factor
• The new recommendation allowed for half of the money to experience potential stock market growth. The other half enjoyed market-linked growth plus the added safety of a protected lump sum principal that the client felt was essential

Case Study #2

Challenge:

• A new broker needed help identifying a client to increase sales
• CPS suggested a  client age 65 with $210,000 in a non-qualified Annuity with a cost basis of $100,000
• The client wanted to protect himself against any possible future medical emergencies, but was worried about the income tax liability incurred by withdrawing the $110,000 in gain from the Annuity

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. In addition to knowing which products are on the market, CPS prides itself on keeping up to date with current laws and regulations in order to help you get your client the best deal possible

Benefit:

• Client received a number of benefits including an initial $8,750 tax free monthly Long Term Care benefit
• 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 never arises

Disability Income Insurance

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.

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
• Wanted Long Term Care Insurance 
• Had unsteady health history and build- underwriting would have been a long shot
• CPS discovered the client was a partner in a small business

Solution:

• Our LTC department proposed an employer sponsored multi-life plan
• We were able to educate the agent on a product with a minimum of three employees required, employer paid, only five underwriting questions, and a 10% policy discount, coupled with a tax deduction for the employer
• The agent then presented the idea to the other partners and they agreed with his recommendation
• The agent was able to parlay one policy into three

Benefit:

• The client received a policy for herself and her business partners while writing it off as a tax deduction

Underwriting

The CPS Underwriting Department evaluates a full range of client attributes to find the best coverage  available. Our head underwriter is a RN who 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