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Wanting a second opinion from someone that doesn't have an inherent conflict of interest - independence is the single greatest asset that a fee-only insurance advisor brings to the table, and because such an advisor is only compensated directly for the advice given and not based on the decisions the consumer makes, there is not an inherent conflict of interest - those conflicts are evident with anyone that is compensated on anything other than a fee-only basis for the advice given.

Determining whether or not life insurance is needed, and if so the amount and type required - not surprisingly, the entire life insurance industry is geared up to sell the largest amount of the most expensive type of coverage possible, and a fee-only insurance advisor can help consumers figure out the type and amount of coverage needed for their unique situation. Many consumers are significantly underinsured; some don't need insurance at all; and there are many others that have insurance needs ranging from estate planning to business succession to charitable giving to special needs trusts. Fee-only insurance advisors are accustomed to working with attorneys and other financial professionals to develop and oversee the implementation of optimal solutions.

Buying a cash value life insurance policy - Immediate savings equal to 80-90% of the first-year premium can usually be achieved. On a present value basis, the total value of working with a fee-only insurance advisor can often add value that is in excess of five annual premiums.

Converting a term life insurance policy into a permanent policy - a fee-only insurance advisor can evaluate whether or not this makes financial sense, putting the consumer's best interests forward with both the potential converted policy and other available alternatives.

Buying a guaranteed universal life insurance policy - There are numerous pitfalls in this marketplace that must be navigated. Many inappropriate designs are sold every day, and a fee-only insurance advisor can make consumers acutely aware of significant caveats before purchasing one of these policies - because any exit strategy is disastrous financially.

Evaluating whether or not to replace an existing life insurance policy - Fee-only insurance advisors can help consumers make sure that the existing policy has its best foot forward - and can then compare that to a wide of universe alternatives, each of which is designed to maximize consumer value rather than agent commissions.

Evaluating whether or not to keep an existing life insurance policy that is no longer needed - Fee-only insurance advisors can evaluate life insurance as an investment, taking into account the health of the insured, the tax ramifications associated with surrender, and the opportunities available if the cash value and future premiums were invested elsewhere. Furthermore, many consumers leave money on the table by failing to exit optimally from their existing policies, and a fee-only insurance advisor can help avoid these unnecessary losses.

Optimizing the management of existing life insurance policies - Inforce management of policies is often abysmal, due to agents being compensated very little or not at all for servicing policies and due to the interests of the consumer often being opposed to the interests of the agent/company. A fee-only insurance advisor can help a consumer figure out how frequently premiums should be paid, how dividends should be utilized, whether or not premiums should be continued, and the true cost of borrowing from a policy and whether or not loans should be taken or paid off.

Evaluating any life insurance scheme that seems too good to be true - Life insurance illustrations are notorious for containing "projected" elements that look great on paper but may have little chance of coming to fruition, and a fee-only insurance advisor can help a consumer understand that the illustration is not the product.

Owning or considering the purchase of a variable universal life insurance policy - virtually anyone that owns or is considering buying a VUL policy is in need of help from a fee-only insurance advisor. Countless consumers are oblivious to the fact that their existing policies are ticking time bombs, and corrective action such as increasing the premium, lowering the death benefit, and/or changing the investment allocation can help salvage a policy - or in many cases the policy may not be worth salvaging.

Contemplating the sale of a life insurance policy in the life settlement market - a fee-only insurance advisor can help consumers recognize the true intrinsic value of these policies and can point out the pros and cons associated with these arrangements.

Buying a new deferred annuity or evaluating an existing deferred annuity - an alarmingly high percentage of annuity sales are completely inappropriate, and a fee-only insurance advisor can help a consumer avoid costly mistakes and determine exit strategies from poor annuities if appropriate. Variable annuities, and especially those with guaranteed living benefit options, are particularly complex, and consumers have little or no chance of understanding these policies without the help of a fee-only insurance advisor.

Contemplating the purchase of an immediate annuity or longevity insurance - there are products available that reduce agent compensation, and a fee-only insurance advisor can help consumers optimize value, as well as helping them navigate decisions regarding inflation protection and the effective investment appeal of products designed to tackle the risk of living too long.

Evaluating which option to select from a defined benefit plan at retirement - options abound, including single life, joint and various survivor percentages, and various certain periods. A fee-only insurance advisor can take a consumer's health and financial situation into account to formulate an optimal strategy for pension benefits, often in conjunction with maximizing Social Security benefit decisions.

Evaluating long-term care insurance options, including hybrid policies - a feeonly insurance advisor can help a consumer determine if it makes sense to purchase long-term care insurance as part of a hybrid policy, as standalone coverage, or not at all.

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Scott J. Witt, FSA, MAAA has over 18 years of experience as an Actuary in the Insurance Industry. He maintains the highest actuarial designations, FSA (Fellow of the Society of Actuaries) and MAAA (Member of the American Academy of Actuaries).

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