I’m looking at my phone right now because when I told my son that I was speaking in front of this amazing group, he said, “Ugh. For how long?”

I said, “It’s a whole hour session.”

He said, “Who would want to hear you speak for an hour?”

So I’m going to take a picture of everyone. Wave to my son. OK. Good.

We got that out of the way. And thank you for being here. What an honor to be here speaking today at Top of the Table to the best of the best.

It’s really amazing to me. But before I go on, I want to tell you why I’m here. I’m here because I learned from some of the best in the industry. I learned from some of the greats, John Savage, Ben Feldman, Sid Friedman. And, as they taught me, they asked me to share. And today I’m here to share with all of you. And share is what I ask you to do. I’d like you to learn that sharing Kool-Aid and I’d like you to share also.

Sharing is an amazing thing. I see Scotty Brennan right in front of me. Scotty Brennan taught me a long time ago and that sharing ideas is unlike giving money, Scotty, if I give you a dollar and you give me a dollar, at the end of the day we still only have a buck, right? But when I give you an idea and you give me an idea, at the end of the day we each have two ideas. How many people are in this room? I thought there would be like two. But there are a lot of people. Think of the number of ideas that are sitting here. Think of the amount of sharing that could go on. Think about the number of clients we could help with all these ideas. It’s really quite amazing. It’s quite amazing when you think about it. So think about it. Write down some ideas that maybe I’ll share with you today. Think about your own and share them with someone else. Keep repeating. Isn’t that cool?

I also want to tell you that I’m not a professional speaker. Far from it. I’m not even really a good speaker. But I do love to share ideas and I do have some ideas that have created some revenue over the years. So, if stand here at the podium too much, if I look at my notes too much, if I’m not as kind of cool and confident as all those speakers on the main stage today, please forgive me. But I am going to do everything I can to leave you with an attitude that you need to succeed. I’m going to leave you with a thought process that you need to achieve. I’m going to leave you with some ideas that could turn into real sales. And with that, you have to say, let’s go Cubs. So. Moving on to our business.

We heard a lot about change. And I didn’t know what they were going to talk about today and, clearly, they didn’t ask me what I was going to talk about because we’re going to talk about change. And the best statement I know about change is up on the screen right there. If the rate of change on the outside is not greater than the rate of change on the inside, the end is near. The question is, what externally has changed in the insurance business? Think about all the change. Interest rates? AG38? The tax law? How about Trump? PE form ownership of our clients? PE ownership of insurance companies? Product change? Underwriting? Our clients’ net worth? Has there been compliance changes? FIMRA changes? Mortality rate changes? Commissions? Commissions disclosure? The cost of doing business. Has that changed? Clients’ expectations? Technology? Internet sales? And how about the Department of Labor?

What does that say? If the rate of change on the outside is not greater than the rate of change on the inside, the end is near. But while that was going on, what’s changed inside your practices? Are you doing the same things you were doing before? What about the structure of your practice? The strategy? The staffing? The value proposition? What about your sales talk? Product mix? Prospecting methods? Markets? Best practices? Your knowledge? Your pace of doing things? The technology you use? Social media? Some of the above? All of the above? Maybe none of the above.

Are you capable of making change? Do you have the courage? Are you able to reinvent yourself? It’s hard. I’ll tell you, if you can’t reinvent yourself, success is much less likely. And if change on the outside is greater than change on the inside, the end is near. I can thank someone in the front row for the picture on this. That is me. And believe me I have worse pictures of me than that. I weighed 315 and I wanted to be here a little longer. So I thought I should change.

What have you changed in the last five years in your practice? Are you willing to change? Can you change? Let me tell you, the market has changed. Has the place where you make money changed? Have you followed the money? I started in the business in 1987. We worked and marketed to doctors, small manufacturers, screw machine manufacturers, floor traders on the Chicago Board of Trade and the Options Exchange. I sold to printers and car dealers, high rise general contractors. These were my people out there. Life was good.

But today, look at today. Doctors today are on salary at hospitals. There are few small manufacturers left. There are no screw machine shops left in the United States. There are no more locals or traders on the Board of Trade or the Merc. Printers are few and far between. Car dealers have been rolled up. If I didn’t change, I surely wouldn’t be here addressing this amazing audience. Let alone be a Top of the Table member for the last 18 years.

Today we work for hedge fund managers, private equity firms, system engineers. We work for proprietary traders, web optimizers, 3D printing manufacturers. We have accountants and some of them make a couple million dollars a year and lawyers who make $5 million to $10 million a year. That never happened before. We work for farmers whose land now costs $10,000 or $15,000 an acre and the John Deere dealers who service them.

Let’s look at your market. I ask you: Look at your market. Have you successfully followed the money? Do you have to change? If there is or isn’t an estate tax, is there potential change? But you need to look at the rest of your business to successfully navigate change in this world. Have I gotten your attention? Is this something worth talking about? I guess it’s a pretty hot topic since the first three speakers today all talked about change.

Let’s start with estate tax and the never-ending potential change in estate tax. Who out there thinks there will be an estate tax? Who thinks there won’t? Who thinks there will, then there won’t and then there will and then there won’t? So on. But let me give you some ideas of why estate tax will probably stay around and some reasons why some people think it’s good public policy. And you need this information to have a reasonable conversation with a client. Because estate tax could be gone tomorrow and you still need to have a reasonable conversation with the client about estate tax. Because, guess what, at least half of you thought it would be coming back.

To prepare for speaking to one of your clients about this, we have made some talking points. According to Forbes magazine, the wealthiest 400 Americans are worth $2.2 trillion. And let me tell you, I have a lot of clients on that list. They’re not even close. If there was not an estate tax, this group would save their 40 percent estate tax. That means 400 people would save $880 billion or $2.2 billion apiece. Good public policy? You tell me.

What would you give up to save these people their estate tax? Funds for the military? National defense? Child care? Roads and bridges? Is saving Paris Hilton and the Koch children’s inheritance more important than paying for the government? How are we going to pay for Irma and the storms? If we stop estate taxes, is it really good public policy? I’m not making a political point here. I’m talking about a conversation you need to be able to have with your clients. However, you know the estate tax that they say is 40 percent, could really only be 15 percent because we get that thing called a “stepped-up basis.”

Most small businesses have low basis. So, if you have 40 percent estate tax and you get rid of the 25 percent capital gains tax, were at a 15 percent tax. All of this is about saving the richest people in the country 15 percent. Is this good use of our Congress’s time? Is it a true priority? And, by the way, we all know enough to know that we could plan around a lot of this. So, the estate tax rate is actually even lower than this. Again I ask you: Is estate tax good public policy?

We’ve heard the possibility of having this scenario. No estate tax and no stepped-up basis, but capital gain taxes at death. Again this saves 40 percent estate taxes and replaces with capital gains tax at death. It’s a 15 percent estate tax. But, if we have elimination of stepped-up basis at death, who does that hurt? If we have stepped-up basis at death and we eliminate that, who would it hurt? If someone has a liquid portfolio that’s traded, they usually have a pretty high basis. But if someone owns a family business or a firm, they probably have no or little basis in that. So again, who are we hurting with getting rid of estate tax? We might be hurting the people we’re trying to help more than we’re helping.

Without estate tax, without a stepped-up basis, it’s a difficult calculation. We’ve had that carried-over basis before. It’s easy, it’s simple and it makes sense to have a stepped-up basis.

Also, think about the middle class for a moment. The middle class has most of their money sitting in qualified funds. Guess what doesn’t qualify for a stepped-up basis. Not only doesn’t qualify for a stepped-up basis, but we haven’t even paid income tax yet on that. So, once again, the wealthy people are getting stepped-up basis on low basis assets they owned like real estate and businesses, but the general public is not getting that. So what’s going to happen? Is it good public policy? The President said there won’t be a tax cut for the wealthy. I guess we’ll see.

But there are some other issues. Charities will receive less money. If charities receive less money, they will provide fewer services, which is what charities do. So then there are only two choices. There will either be fewer services or the government will have stand in. And who’s going to pay for that service? Is it going to come out of your income?

What if gains are triggered at a gift, which we’ve heard is a potential also? If gains are triggered at a gift, what does that do? People might be hesitant about making a gift and triggering gains. So what does that do? It concentrates money in fewer people’s hands when we’re trying to concentrate money in more people’s hands because that will increase spending and GDP.

And we tax in America. The tax system taxes paychecks of Americans who get up and work every day for their money. Isn’t tax on his or her money that he or she will inherit more fair than taxing your earnings? We’re going to tell the factory worker who makes $50,000 a year that we’re going to tax the earnings? But again, we’re not going to tax the $100 million that Paris Hilton gets. Is it good public policy or bad public policy? What do Americans really think? Well, ALU has polled Americans on this. They used the Republican pollster so they couldn’t be accused of kind of skewing the news. And guess what. Almost everyone was in favor of an estate tax versus taxing income. And it is a zero sum gain. Just because we change taxes doesn’t mean that spending changes.

You should also know a little bit about estate taxes. This is a horrible slide. I’m sorry, but it talks about the estate tax rate and the number an amount of exemptions. How many years are there where there was zero estate tax? There was one in the last hundred. Do your clients play Russian roulette on a one in a hundred bet? I don’t think mine do. You can get copies of all these slides. Here’s the history of what happens. A long time ago, there were a few times the estate taxes got repealed. And then guess what happened. They came back. Andrew Carnegie recommended a heavy estate tax in 1889. He was one of the wealthiest men ever. It’s interesting who doesn’t mind paying estate taxes and interesting who does. There have been some repeals, that’s 1902. That’s 1870. And guess what, there have wars and we needed money and they brought it back.

But when you look past them, we’ve had one year of repeal. And you look what happened to the exemption. In 1981, it was raised to $225,000. Six hundred thousand in 1986, to where it is today, more than $11 million for a couple. You should know this because it’s important to have this knowledge when you’re having a conversation with a client.

You should know that it’s easier to tax dead people than live people. It’s just really is. And the government needs the money. So, if that’s the case and you still get the objection, “They’re going to get rid of estate tax.” And by the way, they might. You might say, “Divide your mortality, mister 60-year-old who’s going to live to 100, by four. Well 60 minus 100 is 40. Divided by four is 10. You’ll have to live through 10 changes in administration. Guess what happened when the Republicans didn’t get their way when there was a Democratic President. They wanted to change everything. And guess what’s going to happen in four or eight years or 12 years when there’s a Democratic-controlled Congress and President. They’re going to want to change things.”

I’ll tell you what I personally believe. If the income tax system is fair, and it stays fair for a generation, then we should eliminate the estate tax. But I believe that we could all agree that the income tax system in this country favors the rich, has been bought and paid for by the rich, and has created massive estates. That’s just how it happened. Just think of some of the income tax issues that favor the rich, 1031 exchanges on real estate. Why can we exchange real estate, but not other property, without paying taxes? Depreciating on appreciating assets. The ability to transfer intellectual property offshore and lease it back for a deduction. The deduction for interest expenses for business and real estate. You know, farm subsidies and so many more.

If we make the income tax system fair and we keep it there for a generation or more, I don’t believe we have a need for estate tax and this is personal. But as long as the income tax system is a little broken, then this does give a reset. And I share this with you because you need to be able to have a reasonable conversation with clients.

The key is communication of estate tax. Because estate tax can be repealed. It might be repealed. So what do you do? You have to communicate and you have to stay flexible. Our clients are demanding that we are flexible in our products and our solutions. We must create products and solutions that are flexible. We must focus on cash accumulation and the investment value of life insurance, not just life insurance for death benefit and estate taxes but as an asset class.

Some examples of this that you should all be talking to your clients about, and I’m sure many of you are, are high cash value policies that have an exit strategy built in, return of premium policies that have an exit built in, max-funded IUL, BUL, whole life. Guess why. Because they have an exit built in. We show an alternative illustration in most cases, lowering the death benefit as much as possible at some point so we can show an income stream coming out. It shows flexibility and clients like this.

Consider life insurance as a qualified plan. Understand some of the new policy split options that are available in survivorship policies. A new one that just came out says we’ll split the policy into two individual policies if any of the following happens: you get divorced, the estate tax is repealed, the unlimited marital deduction is cut in half, the amount of the exemption for federal income tax is reduced by 50 percent, the federal estate taxes go below 25 percent. All of this shows flexibility and it answers the clients’ objection before they ask the question. Isn’t that the idea: Answer the objection before they ask the question? What I personally learned is a client without an objection usually says yes. And that’s a pretty good thing.

Regarding life insurance as an asset class, we compare illustrations and illustrative rates of return on the top. I’ll just use an IUL for an example. We’ll compare that illustrative rate of return on the top of an illustration to the actual capture of the IRR in the policy in year 25, on a 6 percent illustration that we’re capturing 5.8 percent. What are our expenses? We’ll talk about that. And then we’ll compare it to what they’re paying their money manager. We’ll compare it to what they’re paying in taxes.

In that case, if we have an illustration that shows an illustrative rate of 6 percent and we have a capture of 5.8 percent on the IRR of our policy in year 25, that means there’s 20 basis points of expenses that pay for taxes, cost of insurance, commissions. We have no other assets with a lower cost than that. So, when talking about assets, life insurance as an asset class. It’s something really important. Life insurance as an accumulation vehicle. If you don’t understand and haven’t worked in the private placement marketplace, you need to.

I’ve been wrong for the last 10 years when saying this is the next great thing. But I’m going to be right eventually. Kind of like when I kept saying the Cubs were going to win the World Series. I was right eventually. And private placement has grown significantly over the last couple of years. It’s at a quantum trend. If you haven’t looked at the growth in the private placement market you need to, because it’s a great accumulation vehicle.

You need to understand how to lower the death benefit and to pay up whole life insurance so that you have more income coming out of your policies. And the phrase “non-correlated” is very powerful. Coverage is predictable and it’s non-correlated. If the market goes down 50 percent tomorrow, my whole life policy is still increasing cash value and, guess what, clients like that.

We use a piece titled “the power of long-term holding periods” when talking about potential returns in the future. The piece shows the likelihood of achieving a rate of return over a long period of time within IUL. And the math behind it shows 93 percent of all returns fall between 6 percent and 9 percent in an IUL with a floor of 1 percent and a cap of 11 percent. One hundred percent fall between five and 11. Now I don’t know about you, but 100 percent sounds pretty good to me. And we’re not illustrating that much higher than the low end of that range. It’s something the clients understand and they like it. Clients want simple. Clients like to understand it. They’re not looking for fancy.

And we had some interesting clients allocate to life insurance recently. I share this with you because when I tell you the following list of people who’ve purchased the life insurance policies as a non-correlated asset, you might push back a little harder when your dentist client tells you that they should invest and buy term.

The following list of clients have bought life insurance as a family asset. These people think it’s a good idea. And I think you might think so too and be able to tell your clients. There is a private equity fund manager who has $8 billion under management and has never earned less than 17 percent in his fund. Allocated $8 million over 10 years to life insurance. A 40-year-old private equity manager who has an income of about $10 million a year. He has a net worth of $100 million. He wanted an additional stream of income at age 60 of $1 million and he wanted it to come from life insurance because of all of it’s quality.

A Republican director of the SEC and a member of Trump’s inner circle wanted it because of estate tax liquidity. A hedge fund manager of Blackrock. A vice chairman of a top 10 money center bank, and they didn’t use premium finance. A professor and financial author from the University of Chicago and a 55-year-old private equity manager with about a $10 billion net worth, who’s never purchased a life insurance policy in his life. He actually bought a major life insurance company before he owned his first life insurance policy.

So why did these financial rock stars, at this point in their life, purchase insurance? Well, we asked them. And here’s what they said: “It’s another tax effective bucket.”

“The policy has great cash value growth and low charges.”

I didn’t make this stuff up.

“There’s a guaranteed arbitrage between the AFR and the policy performance as long as I die before age 100.”

“I could finance the coverage at low rates and arbitrage while I retain the capital to invest.”

“Asset protection.”

“I believe I’m being paid in liquidity premium on my money.”

“My family will be better off because I did it.”

“The policy can’t go down in value and the rest of my assets can.”

“I love the predictability and the return.”

Remember, we’re in the “stay rich business” for many of our clients. If these guys thought it would be a good thing to allocate to life insurance, maybe you could push back a little bit more on one of your prospects when they say they don’t want to.

The other reason why they’re buying insurance is people hate to lose money. And this is a really powerful slide I believe. This slide shows the power of negative returns. We all know that if money goes down 50 percent, we have to make 100 percent on the remaining money to have it get back to where we are. But how long would it take you at a 10 percent return to get back? If your account goes down 50 percent, you’re going to have to earn 10 percent a year for 7.28 years to have your money get back to where it was. And then it will stop growing. When they talk about the “lost decade” don’t you think this is what they mean? So why do people buy life insurance? They buy life insurance because it’s safe. They buy life insurance because you don’t have these types of numbers. And they buy life insurance because it’s about the return of principle with reasonable growth.

Life insurance and estate planning go together. At the end of the day, life insurance is about discount. It’s about leverage and it’s about timing. That’s it. Using leverage in a non-recourse note to transfer money from your estate to a trust outside of your estate is the first thing you do. Positioning the highest return assets into the right trust, the next thing. Being able to structure assets to take advantage of discounts. Owning life insurance in a trust and charitable planning. That’s what we do.

Isn’t a GRAT or an installment sale using leverage and non-recourse notes to transfer money from your estate outside your estate? That’s all it is. Simple, easy and effective. Positioning the highest return assets into the right trust. Picking the assets with the highest chance to outperform your AFR rate and putting it in trust outside of your estate. Simple, easy and effective. Being able to structure assets and take advantage of discounts. It can be as simple as creating a flip, LLC or an S corporation and selling or gifting minority pieces of your assets into it. Simple, easy and effective.

And buying life insurance for liquidity to pay estate taxes and replace income. Isn’t it simple, easy and effective? I can’t imagine a better asset. And finally making charitable gifts with some of the remaining assets that one has in their estate at the end of the day. It’s simple, easy and effective. Don’t make it more complicated than this. People like simple. They don’t like complex. Ninety-five percent of all estate planning that we do is with just that. I’m telling you this because if estate taxes go away tomorrow, we have to do the exact same thing. Because they could come back.

Why do we have to do it now? Why do we have to get ahead of a situation that may happen in the future? Well, sometimes we have to bring the left hander in from the bullpen. And if you’re not a baseball fan, that means you’ve got to make a change. You have to make a change of pitcher here. What do we mean by that? Flexibility and planning allows us to make a change. It allows us to set the stage years in advance to a world in which we may or may not have an estate tax. And we may or may not have a stepped-up basis.

Imagine a world where we have life insurance in trust, a lot of it. Imagine a world that we have assets inside of our estate, because that’s what we use to live. And imagine that same world and that same person where we’ve done some planning and we have assets outside of the estate. With this planning in place, we could use the power of substituting assets in the legal languages within our irrevocable trusts to minimize income tax and maximize inheritance. Isn’t that what we do? And guess what, if we’ve done all of this and there’s no estate tax and there’s no income tax, we’ve just have more money. So that’s no bad either.

But the power of substitution is the key to flexible planning because it allows the powerholder to change his or her mind at any time. When the power is held and exercised in a non-fiduciary capacity, it doesn’t create a gift or estate inclusion or an incidence of ownership. The powerholder can be the trust grantor or someone else. In the slides, you can have this chart which talks about what’s better and where to own things in a stepped-up basis world and a not-stepped-up basis world and a carryover basis world. Because we could really have our cake and eat it too. Let’s say we want to get all the growth outside of our estate that we’re going to have a carryover basis world. What do we want? In a carryover basis world, we want to have high basis assets in our estate. Because we’re going to carry that over. Or we might want to have low basis assets in our estate because we’re not going to sell it. So if that’s the case, and you want to be able to be flexible, you want to have the growth outside your estate. You’re going to take your family business and you’re going to sell it to a trust outside of your estate that’s not subject to creditors or income taxes. You’re going to pay that inside of your estate. And you’re going to grow that business outside of your estate, because it’s a high growth asset.

And before death, if it suits our purposes, we could transfer that asset inside the estate to a high basis asset outside of our estate. And then, in a flip-flop world, we could do it the other way around. But the key is having the planning early, having it done in setting the stage. Setting the stage for victory allows us to use the ability to substitute assets, but we can’t wait until the end of the day to do that. That’s just one thing that we have to do. I say that because, if estate taxes go away, we’re still going to have these conversations.

Do I think they’re going to be as effective as if we had a 70 percent estate tax and a 70 percent income tax? No. But I don’t want to live in a world where there’s a 70 percent estate tax and there’s a 70 percent income tax, but I believe that these are conversations in which we could have set the stage and then put our clients 20, 30, 40 years into the future in a position where they want to be.

How many of you have worked in the premium finance marketplace? How many of you think it’s complicated? How many of you think it’s dangerous? Well today let me try to make premium finance simple. Because I see a lot of premium finance and we place a lot of premium finance.

Here’s what I know about premium finance. Premium finance only works when someone could pay the premium but chooses not to. People would make this choice to use premium finance under four situations only. The premiums are too high and you have gift tax problems, so you need to borrow the money so you have less gift tax exposure. We use premium finance often for that. Either premium finance or a loan-to-loan situation where it’s not direct premium finance but we could mitigate the amount of gift.

Two, the insured is 100 percent invested in investments that have a higher yield than the cost of the debt that we could obtain to buy our insurance. Pretty simple stuff, right? We could borrow the money for less than what we’re earning. This is the best reason to use commercial premium finance.

Three, the insureds believe there will be a prolonged, but let me make this clear, not permanent, arbitrage between the cost of the premium finance loan and the return on a well-structured policy. Remember, there will not be a situation in our lives where there will be a permanent, and I can’t define permanent, but a permanent arbitrage between loan rates and policy rates. Because we have this thing called “cost of insurance” that cuts into policy rates and returns. But there can be prolonged periods of time or some periods of time where you have a very positive arbitrage and people will use them.

And then the last type of client is the client who just finances everything. They made their fortune financing everything and they’re going to finance everything.

The rest of it is all noise. I’m telling you it’s all noise. If there’s a collateral problem, the client is not a good candidate for premium finance. If you have to ask for collateral, we believe you should ask for the high point of collateral upfront. Make your life easier so you don’t have to go back to him or her and resell this. We sell this all the time. Get a high point of collateral upfront. If it’s a real problem, think about what you’re doing. Make sure it’s right.

If the client is having difficulty getting premium to finance loans, like they’ve gone to the major players and they won’t give them a loan, maybe that’s a red flag. I get so many deals on my desk: “I went to Mellon and Northern Trust and First Fund and no one will give me a loan. Can you help us?”

“No, no we can’t.”

Because maybe if those people who lend money for a living don’t want to lend them money, maybe they shouldn’t. I don’t know.

If a client is afraid of leverage, don’t premium finance it. It’s OK. I’ve had so many clients say, “Howard, I spent my whole life being out of debt, you want to get me into debt.” I don’t want to get them into debt, but I want to show them the options available. And we’re going to make it simple.

Let me tell you what a reasonable outcome is, because we see kind of crazy, pie-in-the-sky things. We review a lot of insurance out there and a lot of programs. Here are some real numbers. If someone is borrowing $1 million on a premium finance program and they can make a 3 percent arbitrage between their loan rate and the policy rate, which is a pretty significant arbitrage, over 25 years, that 3 percent on the $1 million is about $1.1 million. If you could make that and that’s all you do, you could be $1.1 million ahead. But not premium financing. Is that important? To some clients it is, to some clients it’s not. And I don’t care which way they go.

The second part is if, instead of paying the premiums, you could pay $200,000 less of interest and you could retain that capital and make 6 percent more than your loan rate. Why? Because retained in your business and things like that. Over 25 years, that’s about another $1 million. So, on $1 million of borrowing, you might be able to make $2 million in 25 years of positive arbitrage. And there’s other good reasons to do that. But just in pure dollars. If you’re looking at something, partnering with someone or a client of yours has shown something where they’re gaining more than $2 million over 25 years on $1 million, these are red flag. Just look at it. I see a bunch of people in the audience who are pros at this. Call them. Ask them. Partner with them.

We think premium finance is a good thing, but there are horror stories out there. We just saw a situation where a client purchased a premium finance policy for someone and they were going to sell the policy a couple of years later. Kind of a bad start to a story. It’s not like “once upon a time.” Once upon a time they bought an insurance policy they thought they were going to sell for a profit. And guess what. They couldn’t. That’s the story here.

The client was $1.1 million underwater in his collateral and he wanted out. Guess what? He got out. Surrendered the policy. It was an IUL. It had a five-year bucket. Which meant it didn’t mature for another couple of years. They had a lot of embedded gain in that bucket that they haven’t captured yet because, if the market would have stayed where it is today and just gone flat out for the rest of the time, they would have made a lot of money, but they didn’t have the time to do that because they didn’t keep the policy in force long enough.

So what did the client do? They surrendered it. They walked away from the loan. The insurance company probably had cupcakes because they got to keep all those segments gains. And he fired the lawyer and the accountant and the insurance professional that did it. It’s a horror story, so be careful. Work with people who know what they’re doing.

On the other hand, we’ve successfully obtained more than $1 billion of premium finance death benefit for clients who have successfully paid off some of the debt from cash value, from outside assets. And we’ve even paid some death benefits that wouldn’t have been paid otherwise. So, I think premium finance is something as an idea. If there’s no estate tax, you should look at even more.

I love our business very much. And I see some things that are wrong with our business and you have to know these to kind of get over them. So just some gut checks here. I see a lot of one product solutions when maybe there should be more than one product that could be the right answer. And everything that I see in the marketplace is either right or wrong, when we really live in a gray area. Term insurance isn’t a bad word. A dividend rate isn’t a rate of return. There’s not enough stress testing being done. People are looking for gimmicks and they don’t understand the clients’ needs. We don’t spend the needed amount of time with our clients and we’re in the business succession business, so we make 50-year promises. But we don’t have business succession. I’m sure very few people in the audience fall into those categories, but I think it’s something you should consider.

I’m really proud to be in the insurance business. And I don’t think it’s that cool to be a hedge fund manager or a private equity manager, investment banker. They might make a bunch of money. But let me tell you what is cool: It’s saving a family from financial disaster. It’s showing up with a check when everyone else is showing up with a problem. And that’s a pretty cool thing.

If you’ve seen me speak before, you know that I collect habits of successful people. I’ve been doing this for about 20 years. And I credit the person who gave me my first list, but I can’t remember who it is. The first thing we know is memory is not necessarily a habit of successful producers. But I observe salespeople. These salespeople could be people in our room, they could be people who are doctors who built big books of business where other people haven’t. They could be lawyers.

A couple things. Great producers have grit like no one else. It’s their number one quality. They’re on a mission. They’re disciplined. They run marathons, not sprints. They start early. They’re advising. Great producers return calls quickly and especially the most important ones. They know the product, the competition, their market, inside and out and, if they don’t, they learn it. They thrive on new activity and not old. They know what other people don’t and if they don’t know it, they’ll learn it. They move quickly away from lost causes and no’s and OK answers. They don’t discover clients, they create them. Great producers are very well networked within their industry, within their community. They go beyond product and provide value. They aren’t consumed by what’s on their desk, they’re consumed by what’s not. They play hurt. They have bad moments and bad days.

Just remind yourself what great producers do. With a good attitude and great habits, the next 12 months could be and should be your best 12 months of your career. Here’s why I think that: People always owe someone and love someone. Tax rates and trends are on our side. I know some people think tax rates are high today, but in 1946 they were 94 percent, in the 70s they were 70 percent. You tell me if they’re high. Our IRR is better than any other product on a risk-adjusted basis. A product provides asset protection in addition to the planning that we do. Our clients use planning and the climate for planning is better than it’s ever been before. Interest rates are lower. Clients are saving money. They like the assets.

The people selling our product don’t really understand that they’re not trained like all of you are. They weren’t classically trained in the insurance business. They don’t understand what yield curve is. They don’t understand new money and old money portfolios. They don’t understand how the new high yields work. What happens if you miss a payment on a GUL? Look at who’s selling our products. FA’s at wire houses, CPA firms, part-time agents. When I started there were a million agents and now there’s less than 100,000 career agents from what I understand. We’re truly needed by clients and we have the easiest product to sell. How easy is it to sell a life-long term care hybrid? Everyone needs it. It’s simple. Give me a dollar, I’ll give you four dollars back in long term care. If you ever want your dollar back, I’ll give it back to you and, when you die, I’ll give you $1.50. Pretty easy sale, I would think. The COLI market has changed and if you want to be part of it, work in after-tax planning not COLI planning.

And then there’s the classic reasons for buying insurance. Family fairness. Kids in and out of the business. Tax-free withdrawals. Forced savings. Death benefits. There are all of those really special things that we do that other people don’t.

We’ve spoken about change, flexibility, taxes, structure, mindset. It’s going to be a great year. And there’s a bunch of questions you should be asking and I’m almost out of time. Insurance is sold to people who love someone or owe someone. I’ve never known an estate that could not benefit from insurance. Being richer is better than being poor. How many people wouldn’t buy insurance if they could when they’re sick? They all would. And I think it’s really important to talk about death to clients. Talk about questions like: Does your plan reflect your current values? Are your children going to talk after you’re gone? Have you planned for your children in and out of the business? Are there special needs people who you’re trying to protect?

Jim Monteverdi told me this: “Mr. Client, can I talk to you about a product that I’m working on? It’s in development. It’s not subject to creditors. There’s no tax recapture. It’s flexible. There’s no unknown commitments. It’s 100 percent liquid at mortality. It requires small cash flow. There’s no gift tax, income tax, capital gains tax or estate taxes. You could earn 300 to 500 basis points more than a fixed rate investment with similar risk. It shows your values. It solves problems immediately, privately and when it’s needed most. Does that sound like something we should schedule a time to discuss?”

Remember words matter. Pick them carefully and use them wisely. And, in one minute, I want to tell you this picture right here is the watch that’s on my wrist. It’s a nice watch but the story is better. I had a friend by the name of Woody Justice. Woody took me hunting. I’ll tell you how much I liked Woody, because Jews don’t hunt that much and he got me to like hunting. Woody was a jeweler. I saw a picture of this watch in a magazine and I said, “Woody, I want this watch. Can you get it for me?” It’s a really hard to find watch. It’s not that expensive of a watch, but it’s really hard to get.

He said, “When I get it, I’ll send it over to you.”

I was sitting at my desk one day and I got a call from Woody’s office. Woody had died. That day, sitting in his office. They didn’t know what to do.

I said to the manager of the firm, “I’ll be down tomorrow.”

I went to his office. It was very sad. This was a dear friend. People in the business were sad, but they didn’t know he had a lot of life insurance in force to take care of the business, to pay off all the debts. The bank was concerned until they found out they no longer had loans, mortgages were paid out. The kids had been talked to about coming back to the business. This business today just won the business of the decade in the little small town that it’s in. They employ100 people, and it’s not in a town where there’s 100 people working in a jewelry store. They have a couple other Pandora stores now. They’ve grown. And none of these people would have jobs if it wasn’t for life insurance.

I got back to my office and I had a box on my desk. The box had a note on it that said, “Howard, I know you wanted this watch and I was able to allocate one and thought I’d send it out to you. Thanks for all you do. Love, Woody.”

I cried when I got that phone call that Woody had died. I totally lost it when I opened this box. It did have an invoice in it which was paid promptly. But I’ll tell you, sometimes in our businesses we make rich people richer. And sometimes that’s our job. But we sell insurance for people like Woody Justice’s family and all the people who work at that jewelry store. And I’m really proud of that and you all should be too.