Using H.E.A.P.™ to “Find” Money to Purchase Cash Value Life Insurance
H.E.A.P.™ is an invaluable tool for advisors who are looking for new clients.
It’s like pulling teeth to get a new client in the door and to give you their last three years’ tax returns and all other financial data. You could be the best financial planner in the world with 30+ years experience, and it’s still tough to obtain all of a new client’s financial information.
However, when you prospect for new clients using H.E.A.P.™, your new clients will freely give you all their financial data. Why? Because H.E.A.P.™ is a mortgage topic, and people are pre-programmed to give mortgage planners all their financial data.
Connecting the Dots
One of the best uses for H.E.A.P.™ does NOT involve paying off a mortgage. How? It’s really quite simple.
Assume you used H.E.A.P.™ to get the attention of a new client, Mr. Smith. Mr. Smith is 45-year old, makes $125,000 a year, has a home worth $350,000 with $250,000 of debt. He has $100,000 in a brokerage account, a term-life policy, a wife, and two minor children.
You gathered up all of Mr. Smith’s information and ran an illustration showing him that he could use H.E.A.P.™ to pay off his mortgage 20+ years early saving in excess of $150,000 of mortgage interest.
Mr. Smith’s “surplus” is $1,000 a month that could be used to pay down the mortgage through H.E.A.P.™.
Mr. Smith sees the three-page H.E.A.P.™ printout which brings a huge smile to his face, and he very much wants to implement the plan to pay off his mortgage.
Then you show him the life insurance illustration you brought with you where you take 50% of his monthly surplus ($500) and fund Retirement Life™ insurance to allow him to grow his money tax-free and remove it tax-free in retirement.
Mr. Smith could remove $30,000 a year tax-free from his Retirement Life™ insurance policy each year from ages 66-85.
And then you hand him the new H.E.A.P.™ illustration showing him that he will still pay off his mortgage debt 10+ years early with H.E.A.P.™ and save over $100,000 in mortgage interest even though he allocated only 50% of his surplus to cash value life insurance each month.
Mr. Smith’s gets a big smile on his face and is very interested in both paying off his house early and building a tax-free retirement nest egg with H.E.A.P.™.
What if a client still wants ONLY to pay off their mortgage with H.E.A.P.™?
In the real world, you are going to have people like Mr. Smith who still want to pay off the debt on their home even though it’s not the best way to build wealth.
No problem. You will use H.E.A.P.™ as your built-in, follow-up system so you have an excuse to contact your client 1-3 times a year to see how his/her plan is doing.
When you go back in 6-12 months for a visit, clients will see that they can stay on budget. Therefore, you will again give them an illustration showing them how to build wealth elsewhere vs. paying down the mortgage. They should no longer fear that they can’t properly budget to grow wealth and should be much more receptive to funding Retirement Life™ or another wealth-building tool vs. aggressively paying down the mortgage.
To get started growing your business with H.E.A.P.™, please e-mail roccy@thewpi.org.