Are you getting the most out of your Truth Concepts tools? Let’s take a tour of the tools, and how to use them to optimize the effectiveness of your illustrations.
Income Tax Chart
The income tax chart can be useful for several reasons. The first and most obvious use of this tool is to know which tax bracket to use for your clients. The second use is to help discuss taxes with your clients. For many, taxes are more abstract than they should be–after all, taxes aren't in school curriculums. A discussion about marginal tax brackets can often help impress upon clients the importance (and effectiveness) of careful tax strategy.
We recommend using abstract numbers, rather than the client’s specific numbers, when introducing a concept. This keeps it from being too personal, and helps convey the concept rather than the emotions.
We’ve also included tax information for every Canadian province. Simply click on the dropdown menu saying “Married” to choose the province, or the filing status for American citizens.
US Tax Rate History
If ever there was a way to convey the uncertainty of tax deferment, it’s through the US Tax Rate History tool. Due to much of the misleading financial information, people believe they’ll be better off deferring their taxes to a later time. This is often perpetuated by the belief that they’ll be in a lower tax bracket. While the Income Tax Chart can help you educate how tax brackets work, this tool can help you show how taxes have historically changed.
This uncertainty begs the question: Would you rather defer your taxes for an unknown rate on an unknown sum, or pay those now and have an income-tax free death benefit? Of course, there are other tax advantages for whole life insurance over qualified retirement plans, too.
US CPI History
We all know inflation exists, however it’s harder for many to conceptualize the scope of inflation, and how rapidly it happens. Oftentimes, inflation and the time value of money aren’t accounted for in typical retirement plans. However this tool makes it possible to convey the reality of inflation, and show the importance of assets that outpace inflation.
Although some years there appears to be a 0% change, or even a negative change, you can see that the overall trend is an increase in price. We can’t predict inflation rates from year to year, however we can look at the trends as an indicator. The current average increase for the US stamp is 3.11%. This rate can be used as a benchmark for inflation in all of your Truth Concepts calculations.
The Market History chart is likely going to be among your most-used tools. After all, the rates within Market History can be copied and pasted directly into your illustrations. Whether comparing investment accounts to life insurance or running a Monte Carlo simulation, you’ll find Market History useful.
To get the most from this chart, you’ll need to understand how to copy and paste. The first step is to choose your date range. Say you want to illustrate 10 years. You’ll enter 2008 to 2018 in first and last years, giving you results for what looks like 11 years. You want that “extra” year, because it takes you to the end of the 10th year, rather than the beginning.
After that, choose which market you’re going to illustrate, and hover your cursor over the first row, left click and drag until all the rows you want are highlighted. Right click to copy, and you can paste it in your illustration.
The Life Expectancy tool holds accurate actuarial tables of current life expectancy as it relates to your current age. So looking at the table below, a 55 year-old man with a standard rating has a life expectancy of 25.95 years. On the other hand, a 55 year-old man with a super preferred rating has an expectancy of 29.29 years.
This tool can be fun to play with, and help you determine the best way to structure a policy and retirement strategy. This tool is often best used behind-the-scenes, yet it’s up to your discretion to use it with a client.
Life Insurance Values
This tool is going to be useful for nearly every calculator, so it’s important to understand it wisely. With Life Insurance Values, you can import your policy information. Up to 6 permanent policies can be uploaded, and 4 term policies. Values from this tool can then be pulled into any other calculator.
The importing process will vary depending on the source, however we do have instructions for Lafayette Life Insurance, and other companies will follow. You can also copy and paste your values, however this takes a little more time.
We don’t recommend showing this to a client, as it’s the “back-end,” and they’ll benefit more from seeing the insurance values pulled into other calculators.
The Notes tool isn’t just beneficial for you–it can be a game changer for your client. As you work through an illustration with them, you can take notes using this function. Including down payments, monthly payments or premiums, interest rates, and any other information that will help them better understand the tables.
Say for example you’re showing them the difference between a 15-year mortgage and a 30-year mortgage. Having the numbers noted on the side can help them locate where that information is on the table.
It takes time to understand how to read the calculators, give your clients a leg-up with the notes function. If you’ve been to a Truth Training, you likely know how helpful it is to follow along when you can see the notes on-screen.
Getting the Most from Truth Concepts
If you aren’t regularly using the Tools provided with Truth Concepts, you’re missing out on functionality. Knowing what each tool does, and learning how to use them in your practice, can save you time and help you get your point across better.
We hope you give some of these ideas a try. To learn more, remember that with your TC 360 membership you receive a ticket to Truth Training, as well as Truth Concepts Academy, and a monthly online webinar where your questions can be answered in real time. Start your free 10-day trial below.