Traditional Life Does Fit Into Financial Plans, And Heres Why
Can producers make it in business today by selling traditional life insurance products?
The answer is a resounding yes.
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However, producers must first understand their clients needs for the crucial coverage these products provide. Then, they must expend the time and effort required to educate their clients on that need.
During the past decade, financial planning has centered on providing retirement income, not protection against premature death. Many life insurance agents focused on the 60-plus age group and the 401(k) plans held by the same. Life companies strengthened their broker-dealer affiliations, which resulted in astronomical growth in equities and variable annuities. And dot.com companies and tech stocks led the stock market to new heights.
With the “graying of America,” there is no doubt that retirement needs must be given proper attention. However, the tragedy of last September 11 emphasizes that serious attention must also be paid to the financial welfare of families and businesses in the event of premature death.
In fact, such welfare must be the priority. Three thousand people died as a result of 9/11. Most were relatively young, with families. Many were key executives of their organizations.
Therefore, the “need” for life insurance is not the question. September 11 has reminded us that people do die prematurely–from heart attack, cancer, accidents and other tragedies. The real issue is how to fund for those premature deaths once clients are convinced of the need to do so.
The type of life insurance to use for this, of course, depends on the clients needs, stage in life and economic status. Term insurance works for the short term, but premiums become prohibitive as people age and get closer to actuarial mortality.