Because the federal government classifies marijuana under Schedule I of the Controlled Substances Act, its cultivation, possession, use, and distribution is illegal under federal law. Not all the states agree with the federal government.
11 states have legalized the recreational use of marijuana, 35 states have legalized medical marijuana programs, and many of the remaining states are considering doing one or both.
One of the biggest problems faced by those working in the cannabis industry–and insurance companies and agents working with those businesses–relates to money. Because cannabis businesses are considered illegal operations by the federal government, federally regulated banks won’t do business with them. A number of federal laws–including RICO and money laundering statutes–impose reporting restrictions and penalties on banks who don’t comply. Because these banks are concerned about repercussions by the federal government, they won’t open accounts for anyone in the cannabis industry.
Some local and county banks have been working with cannabis business in states that have legalized marijuana but the majority of these business deal strictly in cash, and face many challenges because they have a great deal of cash on hand. When a cannabis business can obtain insurance, the carrier will require specific and strict conditions to be met in connection with security … because of the crime exposure. Criminals targeting cannabis businesses are far more interested in finding cash than they are pot plants.
For more information about this topic, listen to today’s podcast, or check out any of the following resources:
To be an effective and successful salesperson, you need to know how your clients and prospects value whatever it is they’re buying. Why are they buying it–because they have to, or because they want to? How well do they understand it–both in terms of what it does, and what it doesn’t do? What are their expectations–not only about the product they’re buying, but about how you’ll be providing service?
Tossing a dollar amount at someone means nothing in the absence of context.
Over the years, I came up with a really good way to gauge how people valued their insurance. I started with a story, then offered my absolute best, top-of-the line, super-duper insurance policy. It didn’t matter what type of insurance I was talking about.
If you use the same concept, it won’t matter what type of product or service you sell, either.
The most important thing is to tell a story about an individual (not your client or prospect) with the same product or service your client is thinking about buying. Illustrate the negative consequences that might result if the individual didn’t buy the RIGHT product or service, or the right options and features.
An insurance salesperson would provide a scenario involving a claim, such as an auto accident, a house fire, or an explosion in a manufacturing plant. A car salesperson might provide a scenario involving a car breaking down, or a truck that didn’t have all the features a buyer might need.
Then, after this unnamed individual (who is NOT your client) experiences the horrible scenario, you ask your client what he or she would want their product or service to perform if they WERE the individual starring in your story.
When I was actively selling insurance, I’d quote the most comprehensive insurance policy with the highest limits of coverage. Yes, my clients were shocked when they asked the price and I told them what it was. But I’d explain:
This is the most comprehensive, top-of-the line insurance policy I can sell you. I certainly don’t want to offer you anything subpar. When I prepared the quote, I had no idea about what you wanted your insurance policy to do for you, or what YOU think is the best type of policy. Now that I do, all we need to discuss is what you DON’T want your policy to do and, together, we can design YOUR version of the “best” policy.
At this point in the negotiation, all I had to do was discuss the available policy features and options, and which ones the client/prospect felt were important and unimportant. Same thing with the amounts of coverage. Then, when we did start talking price, clients had a much better idea about what they were buying, what VALUE they placed on the product, and to what extent they were willing to pay out of their own pockets in the event of a claim.
When you mention price before your clients do, you’re handing them control of the conversation … and the interview. They choose the story they want to tell and, I guarantee you, they’re going to skip over the confusing chapters and get right to the one about “Price.” They’ll also skip the words they can’t pronounce, all the small print, and all the stuff that YOU know and they don’t. The framework of what gets discussed, and why, will be much narrower in scope than if you, the person with the knowledge and expertise about the product, tell the story
Clients seek the advice and services of insurance professionals because we have a whole lot more technical and hands-on experience about the subject of insurance than they do. If they think they can handle the purchase all by themselves, they buy online. So, when a client seeks you out, all you have to do is be a little creative to showcase that knowledge … and to provide the framework to ask them what they want, and tell them the whole story.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law to help Americans and U.S. businesses survive the COVID-19 pandemic. Although I’ve downloaded the 247-page bill, I haven’t read all of it yet. However, here are some of the major provisions that might affect you and your family.
The $1,200 and $500 each adult and child, respectively, will be receiving. First of all, not everyone will be receiving this money. The stimulus gives a tax credit to those who filed federal income tax returns in 2018 and/or 2019. So, if a person DID file a tax return in 2018 (or already this year), the tax credit will apply and money will be sent.
Secondly, the $1,200 and $500 amounts are based on the taxpayer’s adjusted gross income (AGI) shown on that 2018 or 2019 federal income tax return. The amount is a $1,200 tax credit per individual and, once the taxpayer’s income exceeds a specified amount, the tax credit is reduced. AGI thresholds are:
$75,000 for individual taxpayers
$112,500 for taxpayers filing as Head of Household
$150,000 for taxpayers who file jointly
My understanding is that the tax credit is reduced by 5% of so much of the AGI that exceeds the above thresholds. Once I read the enter law, I’ll have more info for you about that.
The $600 additional weekly unemployment benefit. The federal government is funding additional unemployment benefits … with limitations. The $600 weekly amount is paid over and above the amount paid by the state, but only in accordance with specific provisions. Some employees will only be eligible for the extra benefit for being unemployed between April 5 and July 31, 2020. Others will be eligible for benefits for a longer period.
The expansion of benefits will apply to the self-employed, independent contractors, people with a short work history, and a few other categories of workers. However, these individuals must meet requirements pertaining to COVID-19, including being diagnosed with coronavirus, being a caretaker for someone with the virus, or losing one’s job because of the pandemic. Other conditions also make a person eligible for unemployment benefits, as well.
Special provisions about retirement plans:
Rules for required minimum distributions (RMDs) have been waived for certain retirement plans in calendar year 2020
The 10% premature withdrawal penalty for certain qualified plans is waived for distributions from retirement accounts for taxpayers with issues related to COVID-19 (this applies to IRAs, 401(k)s, qualified trusts, qualified annuities, and some defined contribution plans)
Certain NON-COVID-19 Medicare telehealth services were expanded
The Affordable Care Act, also known as the ACA and Obamacare, included a provision that taxed most Americans who didn’t buy and keep in place a specific type of health insurance. The reasoning behind the tax was the expectation that if EVERYONE were insured, rates would go down.
Not everyone agreed with this perspective and litigation was filed against the federal government. The Supreme Court ruling a few years later declared the Individual Mandate, the provision requiring the tax, constitutional because Congress has the power to impose taxes on Americans.
Unfortunately, everyone didn’t buy insurance after the ACA and its tax penalty became law, and the rates didn’t go down, either. In fact, in many cases they went up. And kept going up. The ACA was revised in 2017 and the tax penalty was reduced to zero effective 2019.
This was good news to all the people who chose not to buy insurance, but opponents of the ACA filed more litigation to have the entire law declared unconstitutional. The end result of that legislation brought about a ruling by the Fifth Circuit Court of Appeals last December. The Court ruled that if the Individual Mandate no longer contained a tax, it was unconstitutional. Essentially, if a tax is $0, it can’t be billed, collected, or enforced–so it isn’t real. Sort of like the tree falling in the woods and no one hearing it.
Anyway, what this means is that your clients who didn’t have health insurance last year, won’t be paying a tax penalty when they file they federal income tax returns ins April. However, if they live in one of the six U.S. jurisdictions that has its own Individual Mandate at the state level, they might still be taxed on their state returns if they didn’t have state-mandated coverage. Those 6 jurisdicitons are California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont.
Right now, opponents of the ACA who want the entire law declared unconstitutional are in the process of reviewing all the ACA’s provisions before bringing their case back to the District Court. It’s expected that the District Court will take some time considering and will eventually strike that down.
The Taking the Mystery out of Insurance podcast is now live! The Welcome episode aired on March 22nd and the official first episode will air on April 21st. Between now and then I’ll be broadcasting trailer episodes to announce upcoming episodes.
On the podcast, my guests and I take the subject of insurance and break it down into simple language, sharing concepts that help insurance professionals and their clients avoid the pitfalls of confusion and misunderstanding. Each episode will include a Q&A section, were I answer insurance-related questions submitted by listeners.
You’ll be able to find the podcast on YouTube, Apple, Castos, Pocket Casts, Stitcher, Spotify, and Google Play.
Click here to send your feedback about the podcast, to suggest future topics, or to submit a Q&A request.