October 2008

Table of Contents

Editor Column: Kate Kinkade

12 News Update on 529 Plans and College Saving Trends

19 Adding Value: Annuities -- Another Option for Boomer Clients
by Herb White, CFP, MBA
• Baby Boomers face the rising cost of living, long-term home mortgages, fewer employer guaranteed pensions, and the fact that Social Security may not be able to continue without significant changes. Advisors should educate qualified prospective clients about how annuities can help relieve some of their retirement worries.

22 It’s as Much About “The Return of One’s Money,” as it is “The Return on One’s Money!”
by Stephen J. Sternberger, LL.B., LL.M., CLU, ChFC, RHU
Due to a misunderstanding of the product, fixed indexed
annuities have come under fire from the securities industry
and its regulators once again.

 24 Our Annual HMO Survey Part I:
Finding Your Way Through the Maze of Policy Provisions
by Leila Morris
• Each year California Broker surveys health maintenance organizations (HMOs) in the state with direct questions about their plans. This valuable information can help you serve your savvy healthcare clients better. In this issue, you’ll find referral and coverage questions. Look for Parts II and III in coming months.

40 Eye Care Benefits Provide Appreciated Value
by Karen M. Gustin, LLIF
• To compensate for adjustments in medical and pharmaceutical benefits, employers are offering value-added insurance options, such as eye care insurance, which also feature low monthly premiums. 

44 Health Information Technology: Improving Care And Productivity
by Tom Carter
• Organizations that want to maximize their healthcare dollar should partner with carriers that are committed to robust and advanced health information systems.

46 Providing Smart Alternatives to Traditional Group Benefits
by Ron Goldstein, CLU
• Offering an HSA can reduce insurance costs and divert savings into tax-advantaged accounts for eligible medical expenses or even for supplemental retirement savings.

48 IRS Releases Plethora of HSA Guidance
by Roy Ramthun
• The Internal Revenue Service (IRS) was busy this summer issuing three new pieces of guidance and one proposed regulation on Health Savings Accounts (HSAs).

50 The Missing Piece In Your Client’s Portfolio
by Curtis M. Cole
• With many experts saying we’re headed for a recession, wouldn’t it be nice to for your clients to have a product that is not correlated to the stock and bond markets and is not affected by interest rate changes or the price of oil?

52 Life Settlements: Should You Work with a Broker or a Provider?
by Larry Simon
• Determining whether to work with a life settlement broker or provider can be the first step to entering the life settlement industry.

54 Why Life Settlements Are Worth Talking About With Your Senior Clients
by Nikolas Adams
• The life settlement marketplace continues to expand as high net worth seniors seek liquidity from unwanted life insurance policies.

56 Life Settlement Convergence Capital Market Q&A for Brokers
by Mark Todd
• The expanding presence of institutional investors will provide many opportunities for brokers as the life settlement market becomes a sophisticated asset class.

58 Life Settlement Underwriting - The Flip Side of The Coin
by Lance Wallach, CLU, CHFC, CIMC
• Life settlement amounts are determined by a multitude of factors to arrive at a “net present value.”

61 The Subprime Mess: Is STOLI next?
by Mark A. Chandik, CLU, ChFC
• Legislation is pending in most states to separate legitimate life settlements from manufactured STOLI transactions. Let’s learn from the sub-prime mess and clean up our act before the regulators do it for us.

62 Life Settlements And Annuity Arbitrage
by Corey A. Weiss
• New and emerging mortality-based products and services are giving advisors an array of planning options.

 70 Will Innovation Continue to Elude the Life Insurance Industry?
by Robert W. MacDonald
• The life insurance industry has the opportunity to regain its former leadership position in financial services.  But to do so, the industry must respond to challenges in product, distribution, and technology. How it does so will determine the future of the industry. However, for an industry that views change as a disease, the prognosis is bleak.