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Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN68309122014.

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Presentation on theme: "Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN68309122014."— Presentation transcript:

1 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Conducting a Buy-Sell Review Maximizing life insurance sales opportunities

2 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Disclosures  The Voya ™ Life Companies and their agents and representatives do not give tax, legal or accounting advice. This information is general in nature and not comprehensive, the applicable laws may change and the strategies suggested may not be suitable for everyone. Clients should seek advice from their tax and legal advisors regarding their individual situation.  These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matters addressed in this document. Each taxpayer should seek advice from an independent tax advisor.  Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver Insurance Company (Denver, CO). Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All are members of the Voya ™ family of companies.

3 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN The business market has many sales opportunities Sales can be made to: Owners, key employees & the business itself

4 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Business owners invest a lot in their businesses  They invest: –Time –Money –Passion  With no guarantee of success  Most successful owners want to protect what they’ve built

5 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Ownership of a business is temporary! Every owner will leave the business someday!  Death  Disability  Retirement  Sale to Outsiders  Liquidation at Death

6 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Many owners have buy-sell agreements  These agreements are sometimes called “business wills”  These agreements provide some degree of control and certainty  Control over identity of the owners and the price / terms on which an owner can leave the business  Certainty that there is a buyer and that there are funds available to complete the purchase

7 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Buy-sell agreements may become out-dated over time Over the years many things can change, including:  The economics of the business  The competition  The amount of investment required to remain competitive  The commitment and health of the owners  State/federal tax and regulatory laws  The owners’ personal circumstances and objectives

8 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Buy-sell agreements make important promises Agreements should be reviewed periodically to make sure the promises are realistic and can be kept

9 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Regular buy-sell reviews are important Two important components of a buy-sell review 1.Review the terms of the agreement, including:  Valuation formula / price  Terms of payment 2.Review the funds backing up the agreement, including:  Funding for when an owner sells during his lifetime  Funding for when an owner’s interest is purchased at death  Efficiency and viability of life insurance policies

10 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN New life insurance sales may flow from a buy-sell review Many agreements list death as a “triggering event”

11 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN “We don’t really need a buy-sell review now, do we?” The challenge is to get their attention! Show them their agreement may have some “holes” in it

12 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Why a review is important now!  The value of the business may have changed  Tough economic times often reduce a business’ value  If the agreement isn’t revised, the remaining owners may wind up over-paying!  If this is a good time to make ownership changes, it may be possible to accomplish them at a reduced cost: –Redemptions –Sales –Gifts –Stock bonuses

13 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN New sales tools for buy-sell reviews  – Important Questions in Buy-Sell Review  – Questions for Buy-Sell Review & Life Insurance Funding Analysis  – Buy-Sell Life Insurance Policy Review Factfinder for Business Owners

14 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Important Questions in Buy-Sell Review #161434

15 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Designed to ask challenging questions  Direct and simple questions  Questions they may not be able to answer  Motivate the owner(s) to find out the answer  May potentially give you an opportunity to demonstrate some special experience or value

16 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Questions about the agreement  Does your agreement cover all the important transition events?  Does the agreement prevent you from passing on your interest to your spouse, children or grandchildren?  Does your agreement require the purchase of a departing owner’s interest, or is the purchase optional?  Will the implementation of the agreement result in a change in voting control?  Is the agreement designed to favor the remaining owners or the departing owner?

17 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Questions about the funding  If the business was sold to outsiders today, how much would you want for your interest? How much would you get under your buy-sell?  If you had to sell your interest today, how much money would you get? How much has been set aside? Where will the rest come from? How long will you have to wait for it?  Suppose something happens and you have to buy out another owner: How much have you set aside? Where will the rest come from? How much time do you have to get it?  When was the last time there was a formal review of your agreement and its funding?

18 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Questions for Buy-Sell Review & Life Insurance Funding Analysis #160850

19 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Part one – Questions about the agreement Additional Questions  What are the triggering events covered?  Have owners signed Personal Guarantees for Business Loans?  Are there any non-owner key employees and have they signed non-compete agreements?

20 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Part two – Questions about the life insurance policies Additional questions  How does the inforce coverage compare with current business value?  Are ownership & beneficiary designations consistent with the agreement?  Are 101(j) forms necessary? If so, are they in place?  Is there Key Person coverage on each owner-employee?  Do the owners also have adequate personal coverage apart from the buy-sell coverage?

21 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Buy-Sell Life Insurance Policy Review Factfinder for Business Owners #160851

22 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Buy-sell life insurance policy review factfinder A fact-gathering tool to help answer these questions:  What is the state of each policy today?  How is each policy likely to perform in the future?  What other life insurance options are available?  Are the life insurance policies a good value today and in the future?

23 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Three new sales tools for buy-sell reviews  – Important Questions in Buy-Sell Review  – Questions for Buy-Sell Review & Life Insurance Funding Analysis  – Buy-Sell Life Insurance Policy Review Factfinder for Business Owners

24 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Buy-sell reviews can lead to new life insurance sales  Buy-sell funding  Key person insurance (Owners and key employees)  Executive benefit sales –Personal life insurance for owners –Personal or business-owned life insurance for key employees

25 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Every owner will leave the business someday Advance planning can make the transition easier!

26 Do not put content on the brand signature area For agent use only. Not for public distribution. ©2014 Voya Services Company. All rights reserved. CN Thank you!


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