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Insurance at SchwabManage your clients’ risk and expand your wealth management solutions with life, disability, and long-term care insurance

FOR INTERNAL USE ONLY - NOT FOR DISTRIBUTION TO THE PUBLIC 2

Contents

Learn

Schwab’s point of view .................................... 03

Why insurance matters ................................... 04

Our insurance spectrum ................................. 05

Assessing needs across the lifespan .............. 06

Activate

Uncovering an insurance need ....................... 07

Engaging your Crump Insurance Specialist .... 08

Case studies .................................................... 09

Go further Resources to go deeper ................................... 13

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Insurance is a safeguard against unforeseen events and can protect a client’s family, lifestyle, and legacy. At Schwab, we believe insurance is a key pillar of wealth management and an important part of the financial planning process. This guide will help you uncover your clients’ insurance needs and arm you with

the knowledge and tools to Learn, Activate, and Go further.

Jumpword: Insurance Go further ActivateLearn

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https://schweb.schwab.com/iwin/prod_serv/insurance/html/P201914061.html


Schwab’s point of view

We believe that risk management is critical to holistic financial planning and modern wealth management.

We believe insurance can help protect our clients’ income, assets, lifestyles, and legacies.

We believe that our clients should include insurance in their financial plans.

Go further ActivateLearn

“I believe helping clients through risk management and insurance planning is a key part of being a trusted advisor. My experience reviewing my own insurance needs with Crump was both positive and effective. My Insurance Specialist got to know me and presented customized options to choose from and successfully addressed my personal situation.”

Brett Bernard Vice President; Eastern Division Market Executive

Holistic wealth management topicsThe Charles Schwab Insurance Services team helps support the risk management and insurance planning topic.

1 Investment planning

2 Risk management and insurance planning

3 Banking and credit management

4 Retirement planning

5 Education and family support

6 Business succession planning

7 Planning for incapacity

8 Executive compensation

9 Charitable giving

10 Titling and beneficiary designations

11 Executor and trustee selection

12 Distribution of estate

13 Tax planning

Jumpword: Insurance



Why insurance matters to you and your clients

Risk management is critical to wealth management

Clients should identify risks and then seek cost-effective life insurance options from highly rated firms, which could potentially provide an alternative to self-insuring.

Income can be replaced and assets protected

Disability and life insurance options can replace and protect the client’s income and those who rely on it.

Many people do not have adequate coverage

Over 40% of Americans have no life insurance policy to protect loved ones or beneficiaries.*

Needs and costs for long-term care support are increasing

Of people 65 years old, almost 70% will require long-term care in their lifetime.†

Self-insurance is a risk

“Self-insurance” refers to a client’s ability to pay out-of-pocket to cover a loss. How these costs are covered (from available assets) may rarely be considered, especially when the timing of that need is unknown. The current average lifetime cost of long-term care per person has already reached $172,000.‡

Clients want insurance expertise and support

Most people who seek insurance solutions prefer the expertise and guidance of an insurance expert compared to an online platform or seeking solutions on their own.*

* Statista, 2019. https://www.statista.com/statistics/455614/life-insurance-ownership-usa/† U.S. Department of Health and Human Services, 2020. https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html‡ AARP, 2018. https://www.aarp.org/health/health-insurance/info-2018/costs-long-term-care-fd.html

How insurance planning strategies may reduce risks and potential impacts

• Help a surviving spouse/family avoid unexpectedly and prematurely liquidating retirement assets to maintain lifestyle.

• Potentially mitigate tax implications of selling or withdrawing from qualified retirement accounts.

• Plan for an extended care event to help alleviate a financial burden and reduce the risk of a spouse and/or family running out of money.

• Ignoring current policies can result in a lapse of coverage and risks the ability to secure new coverage.


Including risk management in your financial planning conversations deepens your relationship as a Trusted Advisor.

Jumpword: Insurance



Our insurance spectrumInsurance protects your clients’ ability to help meet their financial goals even in unforeseen circumstances. Schwab works with Crump Insurance Services, which offers complimentary consultation as well as policies from top rated carriers.1

Provides financial protection for dependents and beneficiaries, helping to maintain their current lifestyle, future needs, and goals

Options available from CrumpTerm life

Provides income replacement and cash to beneficiaries in the event of unexpected death. Policy coverage comes with a set duration/expiration.

Permanent life

Provides income replacement and tax-free death benefit to beneficiaries. Policy coverage can be provided to cover the insured’s entire lifetime.

Helps to cover the rising cost of an extended long-term care event and reduce the need to deplete other assets

Options available from CrumpTraditional stand-alone

Help with coverage costs, such as home care, nursing home, assisted-living facility, etc.

Hybrid

A long-term care plan that offers death benefits.

Life insurance with long-term care rider

Life insurance with acceleration of the tax-free death benefit to help cover long-term care needs.

Ensures that plans and processes are in place to protect the interests of companies and families

Options available from Crump• Income protection

• Business loan protection

• Key person

• Buy-sell agreements

• Succession planning

• Survivor needs

• Business overhead expense

Provides partial income replacement if the insured is sick or injured and unable to work

Options available from CrumpShort-term

Offers a portion of salary if unable to work for a short period (such as 3 to 6 months)

Long-term

Offers a portion of salary if the insured is unable to work for a longer period (more than 6 months).

Note: Coverage available for business and personal needs.

1 Top-rated carriers have a credit rating of A- or higher. Credit ratings for insurance agencies indicate the company’s solvency, financial strength and ability to pay claims from policy holders. These ratings are issued by an independent agency as opinion and are subject to change.


Life insurance Long-term care insurance

Disability insurance Business insurance

Jumpword: Insurance



Protecting lifestyle while working

Protecting lifestyle in retirement

Protecting legacy

Protecting a business

Life stage Young professionals Midlife Retirees All ages

Traits • May be carrying debt

• Increasing income

• Financial obligations

• Changes in family makeup

• Need for savings plan

• Becoming serious about retirement income

• Concerns about health status and future health care costs

• Reducing income and expenses

• Desired debt elimination

• Concern about cost of health care or long-term care

• Caretaking of parents or other family members

• Addition or loss of key employees

• Relied upon to create business income

• Need for succession planning

• Growing business value

Protection goal Income Lifestyle Legacy The business

Potential strategy • Term life insurance

• Permanent life insurance

• Disability insurance

• Term life insurance


• Disability insurance

• Long-term care insurance


• Long-term care insurance

• Funded buy-sell agreement to make cash available in case of injury or death

• Key person coverage in case of injury or death

• Income protection

• Business overhead protection

Assessing needs across the lifespanInsurance needs vary greatly with the client’s stage in life. Usually, a younger client’s most pressing need is to protect their current income. Business owners and midlife clients need to protect their future income. And an older client’s most pressing need is often to protect their legacy.


30s–50s

Late 40s–60s

Early 50s–70s

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Uncovering an insurance needIn your discovery conversations with a client—perhaps at an annual relationship review—use life and financial discovery questions to assess your client’s financial risks and position a referral to a Crump Insurance Specialist when appropriate. To uncover a need for insurance, listen for clues and cues about the client’s goals and needs. Use open-ended questions to inquire about the client’s current life insurance coverage and introduce the concept of using insurance to manage risk.

ClueClue Trigger/cueTrigger/cue ResponseResponse Potential outcomePotential outcome

Protecting lifestyle

while working

Job change “I recently started a new job and would like to set aside a little more of my income for retirement.”

“Absolutely. In addition to saving more, how would this change impact your life insurance and disability coverage?”

New policy or policy review

Marriage/ divorce

“With my recent marriage/divorce, I need to establish a joint/individual account.”

“Congrats/Sorry to hear that. It’s a good time to review. Let’s look at your beneficiary elections and your life insurance.”

Beneficiary change or opportunity to purchase a policy

Birth/adoption “I recently had a child and I know I should be considering college savings plans.”

“Congrats. Yes, it’s a perfect time for doing that. I can also assist you with reviewing the amount of life insurance coverage you have to account for this goal.”

Policies for each spouse because, whether working or not, each spouse contributes to the care and well-being of the children

Home purchase “I understand Schwab offers mortgages. I’m looking at purchasing a new home and would like a quote.”

“Yes, in addition to the mortgage, I can also assist you with reviewing your life insurance coverage to make sure you’re planning appropriately for this new liability.”

New policy or policy review

Protecting lifestyle in retirement

Long-term care(client over age 45)

“None of my kids are local.” “I don’t want to be a financial burden later in life.” “I’m concerned about my spouse making financial decisions without me.”

“I worry that health care will drain my savings.”

“Have you given any thought to covering a long-term care event with insurance? It can potentially provide a way to pay a portion of your costs and provide a resource to assist with coordinating the care.”

Hybrid/long-term care insurance or life insurance with a LTC rider

Protecting legacy

Taxation “Considering my net worth exceeds the federal estate tax exemption, I’m concerned about estate taxes. How might I protect my savings?”

“It might be worth talking with our insurance team as they have strategies for incorporating tax-free options into estate planning.”

Permanent life insurance

Special needs planning

“I want to ensure that my special needs child/grandchild has enough money.”

“Sure. Have you considered using life insurance to fund such a goal?”

Permanent life insurance

Protecting a business

Partner “I have partners in my business today who I need to consider.”

“Do you have a funded buy-sell agreement in place? Life insurance is often used for partners to buy each other out if needed.”

Term/permanent life insurance

Personal net worth

“Much of my net worth is tied up in my business.” “What would happen if your family had to quickly sell your business in your absence? Would it be worth as much?”

Term/permanent life insurance

Continuation “My business relies on me being present.” "Have you considered coverage to help the business continue in case you became incapacitated?”

Disability insuranceBusiness overhead coverageBusiness income coveragePermanent insurance

Jumpword: Insurance



Set the initial consultation

A member of the Crump Team will reach out to coordinate and schedule a call for a date and time that works best for you, your client, and your Crump Insurance Specialist.

Propose an insurance consultation and refer the client

Propose a complimentary consultation with your Crump Insurance Specialist. Mention the specialist’s expertise in exploring strategies that address potential insurance needs. Make a referral by visiting jumpword: Insurance and completing the referral process.

ClientSchwab Rep

Initial insurance specialist consultation

During the initial consultation, you will introduce the client to the Crump Insurance Specialist, who will go deeper in discovery to assess the client’s specific needs, goals, and objectives.

Engaging your Crump Insurance SpecialistYour Crump Insurance Specialist will guide you through the step-by-step process of assessing your client’s need, making an insurance recommendation, and preparing an insurance policy for your client to consider.

Identify a need

During discovery, listen for cues that can uncover an opportunity to educate and explore how insurance strategies could benefit the client’s current situation, family/business goals, or future need.

Recommendation

The Crump Insurance Specialist will assess and prepare a recommendation ( if appropriate), and then schedule a follow-up meeting with the client.

Note: You may elect to and are encouraged to participate in this meeting, coordinating the date and time with your Insurance Specialist.

Application and case updates

When the client is ready to apply for a policy, a member of the Crump Team will walk them through the application process. Case updates are provided to the client (and you) throughout the underwriting process. If the carrier makes an offer and the client accepts the offer, the policy will be placed. Crump will provide ongoing servicing for the policy.


ClientSchwab Rep ClientSchwab Rep Crump

ClientSchwab Rep Crump

Client Crump Client Crump

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Jumpword: Insurance



EXPAND YOUR EXPERIENCE WITH RESOURCES THAT DRIVE BUSINESSCase study: Protecting lifestyle while working

GoalProtect the family’s lifestyle in case of an untimely death or disability

Strategies to consider• Coverage to replace future earnings,

pay off debt, and create education savings

• Child coverage and critical illness protection can be added

• Protection strategy using a term product or a blend of term and permanent, as well as sufficient disability coverage

Conversation starter“Have you thought about how your family might pay for college or maintain your current lifestyle in the event you’re no longer able to work due to injury or if you were to pass away unexpectedly?”

Transition statement“Based on what you’ve said is important to you, I believe you’d benefit from a conversation with my Crump Insurance Specialist, who will help explore how a strategy using insurance could provide protection to cover/replace future earning, pay off debt, and create education savings.”

Clients at this stage should focus on accumulation, but they often discount1 the need to protect their income and underestimate2 the amount of coverage they need. With financial obligations like a mortgage, student loan payments, and school tuition, families could face devastating effects if their income were taken away through disability or death.

1 https://www.limra.com/globalassets/limra/research/research-abstracts/2019/2019-insurance-barometer-study/0184_2019_insurance_.barometer_web3.pdf2 https://www.nber.org/digest/mar00/w7372.htmlCase studies are offered to show how Crump can provide valuable assistance to Schwab representatives seeking insurance solutions for their clients. Results may vary. This is a hypothetical example and does not guarantee a similar result.

Jim, age 36 Lisa, age 38

Children ages 9 and 13

$500,000 in assets

Just purchased a $500,000 home

Planning for kids’ college educations

The Robinsons

Go further ActivateLearnJumpword: Insurance



EXPAND YOUR EXPERIENCE WITH RESOURCES THAT DRIVE BUSINESSCase study: Protecting lifestyle in retirement

As clients approach retirement, their focus should shift to protecting their accumulated assets from the possibility of a long-term care event. With increasing costs of health care and long-term care, heading into retirement without a long-term care readiness plan could derail their financial plans quickly.

GoalProtect assets and current lifestyle if a long-term care event occurs

Strategies to consider• A long-term care policy or “asset

protection” plan using a hybrid long-term care policy

• Lifetime joint coverage to provide a monthly benefit, possibly with a rider on the policy ( if appropriate) that helps preserve the benefit amount

Conversation starter“Tell me about the specific considerations and plans you’ve made to protect your retirement from a long-term care event?”

Transition statement“I understand from what you’ve shared that you’re not sure how you’d approach a long-term care need. Many of my clients feel similarly. I’d like to introduce you to my Crump Insurance Specialist to have a deeper conversation and share his/her expertise. This could provide you with peace of mind about potential strategies you may consider to maintain your current lifestyle should a long-term care event occur.”

The Pritchards

John, age 60 Jamie, age 57

Children ages 25 and 30

$2,500,000 in assets


Case studies are offered to show how Crump can provide valuable assistance to Schwab representatives seeking insurance solutions for their clients. Results may vary. This is a hypothetical example and does not guarantee a similar result.

Jumpword: Insurance



EXPAND YOUR EXPERIENCE WITH RESOURCES THAT DRIVE BUSINESSCase study: Protecting legacy

Clients at this stage are enjoying retirement and can focus on their legacy and the most efficient way to pass their wealth to the next generation.

GoalEnhance their legacy while minimizing the tax liability for heirs once the assets are inherited

Strategies to consider• Consider using required minimum

distributions to cover life insurance premiums that protect legacy

• Various universal life insurance policies can be used for flexible premium and death benefit amounts to cover estate taxes, if applicable

Conversation starter “Tell me what you’ve discussed and planned for your required minimum distributions.”

“What tax-advantaged strategies have you considered to enhance your legacy?”

Transition statement“There are different options to preserve your legacy and minimize the tax liability for your heirs. One is life insurance. My Insurance Specialist at Crump can introduce you to strategies based on your situation and options to best protect or enhance your legacy in the most tax-advantaged way. When would be a good time for me to introduce you?”

The Smarts

James and Abby, both 72

Two children, seven grandchildren

$5,000,000 in assets

Well-funded retirement


Schwab does not provide specific individualized legal or tax advice. Clients should consult a qualified legal or tax advisor where such advice is necessary or appropriate. Case studies are offered to show how Crump can provide valuable assistance to Schwab representatives seeking insurance solutions for their clients. Results may vary. This is a hypothetical example and does not guarantee a similar result.

Jumpword: Insurance



EXPAND YOUR EXPERIENCE WITH RESOURCES THAT DRIVE BUSINESSCase study: Protecting your business

Business owners focus on limiting the risks their business’s face. However, they may not have thoroughly assessed their ability to continue the business in case of disability, natural disaster, or the loss of a key employee or partner.

GoalMinimize the potential negative impact of revenue reduced by the loss of a key person or by a disaster, disability, or death

Strategies to consider• Business continuation

planning: review the buy-sell agreement and key person coverage

• A consultation on business overhead expense coverage and income protection

• Review of Jenny’s personal insurance plans

Conversation starter• “If something unexpected occurred and you or your

partner died or became disabled, what plans have you considered to be able to fund the buyout?”

• “What would happen to you personally and the business if you became disabled?”

• “How do you plan to cover the business overhead expenses if you became disabled or if the business stops due to a flood or fire?”

• “You’ve mentioned what a critical member of the team your office manager is. What would be the impact to your business if she passed away or became disabled?”

Transition statement“Protecting your business from potential blind spots will be invaluable. Having a conversation with my Crump Insurance Specialist will give you more details on options available to protect you from those scenarios that could have a negative impact on your business.”

Jenny Chu

Age 50

Partner in a dental practice with another dentist

Has a buy-sell agreement in place but no funding mechanism

Concerned about retaining her key employee


Case studies are offered to show how Crump can provide valuable assistance to Schwab representatives seeking insurance solutions for their clients. Results may vary. This is a hypothetical example and does not guarantee a similar result.

Jumpword: Insurance



Jumpword InsuranceFor the most current information on our insurance offering, processes, as well as materials for both internal and external use, visit Jumpword Insurance.

SCFR life insurance POVWe believe insurance can help protect our clients’ incomes, assets, lifestyles, and legacies. We believe that Schwab should include insurance in financial planning, as it is in the best interest of clients and their families. Please refer to the Schwab Center for Financial Research (SCFR) Life Insurance Point of View for deeper insight into Schwab’s perspective.

Crump Insurance Specialist Centralized DeskFor general questions on the referral process, policy reviews, business development, and training opportunities, Crump’s Insurance Specialist Desk is available. Call 1-800-891-8748 or email [email protected].

Resources to go deeper

New materials are often being developed. If you need materials, please contact [email protected]

Go further ActivateLearnJumpword: Insurance


https://iknow-site.schwab.com/info/SCFR/Planning%20Insights/Other%20Content/Evergreen_SCFR_Financial_Planning_Playbook.pdf

mailto:SchwabReferral%40crump.com?subject=

mailto:InsuranceServices%40schwab.com?subject=


To refer a client for a policy review or needs assessment, visit jumpword: Insurance

Charles Schwab & Co., Inc., in association with Crump (Crump Life Insurance Services), provides clients with detailed information about insurance, help determine what’s right for them and, if appropriate, assist in selecting a policy that fits their needs. Charles Schwab & Co., Inc. and Crump are not affiliated. Both are licensed insurance agencies.

The insurance products available are underwritten and issued by participating insurance companies. Not all policies and product features are available in all states. This is not an offer or solicitation in any jurisdiction where the policies are not approved for sale. Any obligations under the policy are the exclusive obligations of the issuing insurance company and are subject to the financial conditions of that insurance company.

© 2020 Charles Schwab & Co., Inc., All rights reserved. Member SIPC.

JUT (0620-0N39) MKT111377-00 (06/20)

00247084

FOR INTERNAL USE ONLY - NOT FOR DISTRIBUTION TO THE PUBLIC


https://www.sipc.org/

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