As a robust picture of a client's profile emerges, be sure to add all the appropriate forms of insurance coverage associated with the client, co-client, and any children.
Insurance policies can be accounted for within a financial plan via the Net Worth section of the Profile, which is where all of a client's assets and liabilities are entered. By default, the Net Worth is also the 4th step of the initial data entry process for newly created clients:
To add an insurance policy to a client's Net Worth section, click Add Account, hover over Insurance, and choose from the list of available options:
Options include Life, Disability, Long Term Care, Homeowner, Auto, and Umbrella insurance policies. This information will feed into the client's Retirement Analysis section, as well as the various tabs within the Insurance module. All insurance premiums will be added to the client's expenses in the cash flow section. It is important to ensure that you do not double-count insurance premiums when entering expenses on the Profile > Expenses screen.
Insurance policies that you are recommending to a client can be added directly to proposed plans within the Retirement > Analysis module. This allows for an easy comparison of scenarios with different policy options. For more information on adding insurance policies to the Retirement > Analysis module click here.
Enter a term life policy by selecting Add Account > Insurance. In the group life card, you can input the coverage and premium. Group life coverage and premiums will automatically end at the client's retirement.
Enter a term life policy by selecting Add Account > Insurance.
Specify the death benefit; coverage will last until the specified Policy ends date.
Specify the annual premium which will be included until the specified Premium ends date.
The Insured can be:
the client or co-client (in which case the death benefit will be paid out if the Insured dies prior to the Policy ends date)
'First to die' (in which case the death benefit will be paid out at the first death of one of the clients if prior to the Policy ends date)
'Last to die' (in which case the death benefit will be paid out if both clients die prior to the Policy ends date)
A child or grandchild (in which case the death benefit will not be paid out)
If the client's spouse is not the sole beneficiary of the insurance policy, indicate the percentage of the policy proceeds that should go to the spouse and be included within the plan in the Beneficiary % field.
In addition to the death benefit and premium information, input the client's current cash value and distributions from the account for future income purposes. The current cash value can be projected with growth using the "Cash value approach" dropdown menu. For more information on Cash Value Life Insurance read this article.
If the distribution is set to Tax free loan, input the amount of annual income under amount and the Starting/Ending year for that loan income.
Or, set the distribution to Full surrender and input the amount and starting year. When Full surrender is selected you will see a new field appear to enter cost basis for the policy. The cost basis will be added to premiums that take place before the starting year to determine the total basis. This total basis will be used to calculate the taxation of income inflows associated with surrendering the policy.
Set up an irrevocable life insurance trust easily. Set the owner to Irrevocable Life Insurance Trust in order to reflect insurance owned by the trust. Set the Beneficiary % field to 0% to reflect that insurance proceeds will not be going to the spouse and will be retained within the plan.
Enter information on Disability insurance by adding a Group or Individual Disability card. Enter information about the monthly benefit and premiums. These details will flow into the Insurance > Disability module for analysis.
Enter information on Long Term Care insurance by adding the Long Term Care card. Enter information about the daily benefit, premiums, benefit duration, and elimination.
Enter information on Hybrid Long Term Care insurance by adding the Hybrid Long Term Care card. Enter information about the daily benefit, premiums to see the impact on the client's plan. This insurance type will allow for the acceleration of the death benefits to pay for LTC expenses. The death benefit amount will be split between the number of years indicated as the ‘Acceleration period’, and will continue beyond the ‘Acceleration period’ for the duration specified as the ‘Extension period’.
For Example: If the Death Benefit is $200,000, the Acceleration period is 2 years, and the Extension period is 1 year, the policy will pay out $100,000 ($200,000 death benefit / 2 year acceleration period) for up to 3 total years (the 2 year acceleration period plus the 1 year extension period).
Once information about a client's Primary Home has been entered, add homeowner's insurance policies by clicking Add Account > Insurance > Homeowners.
you will only see Homeowner as an option if the client's Primary Home is set to Own and you have entered information about the Primary Home.
Use the Link tohome drop-down box to select with which property the insurance is associated if the client has multiple properties entered. The Annual premium will populate with the value inputted in the Property card.
Enter information about an auto insurance policy by clicking Add Account > Insurance > Auto.
In addition to the annual premium, enter information about the deductible, coverage limits for bodily injury per person ( Bodily injury pp), bodily injury per accident (Bodily injury pa), and property damage. Check the boxes to indicate if the policy includes comprehensive coverage or collision coverage.
The amount entered as the annual premium will be reflected in the Insurance premium section of the Expenses cash flow page.
Enter information about an umbrella policy by clicking Add Account > Insurance > Umbrella.
This tracks premiums and coverage amounts associated with such a policy.
Pro Tip
Existing insurance policies input under the Profile > Net Worth section can be excluded from Proposed Plans within the Retirement > Analysis 'Action Items':
Aggregating insurance policies is not currently an option in RightCapital. Some data Integrations provide the ability to import insurance policies, including Advisor 360 and Albridge.
For modeling whole life policy with an LTC rider, navigate to the Profile > Net Worth > add account > Insurance > Hybrid long term care policy. To recommend the future purchase of a hybrid long term care policy, visit the Retirement > Analysis > Action Items > Add new item > Insurance> Hybrid LTC.
Yes any insurance policy entered in the Profile > Net Worth section will flow to the insurance module under the "current insurance" section.
Contact Us
For additional assistance within RightCapital please contact our Support team.
Educational Webinars
RightCapital is committed to enabling your success. Each week, we cover essential planning modules and product updates.
RightCapital in Action
Check out our YouTube channel where we highlight Advisor Success Stories and share more Tips & Tricks!
