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Ditch The Fear

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I hope you read the cover story in the Sept. 4 issue that was titled “Scaring Clients Doesn’t Work” by our own Linda Koco.

This was essentially a report from the front lines of the most important emerging area right now for the life insurance business–the area of retirement income planning. What the article addressed was how fear-mongering can be counterproductive in talking to clients about the need for thinking about how they are going to have sufficient income for what might be a very long retirement, and one that could actually be quite longer than they are anticipating.

This is a fine line for both companies and agents to walk. The truth is that a large swath of the public doesn’t want to pay attention to uncomfortable facts like this and they won’t listen to you unless you hit them over the head first with a 2×4.

But you also don’t want to go so far as to bring out the old stories about seniors being forced to eat canned cat food because they can’t afford anything else. (And even now, if you have a cat you know that a 3 ounce can of Fancy Feast at 63 cents is not exactly a bargain.)

So, how do you get people to listen–and even more importantly, to act–without scaring the daylights out of them and paralyzing them to boot?

The answer, in a word, is carefully.

To that end, I think it is worth reproducing a sidebar that went with that story which offered discussion points in dealing with clients and gave 10 questions that advisors could ask their retirement income clients. These 10 questions were culled from various marketing materials from The Guardian Insurance and Annuity Company in New York.

Here they are:

1. How much of your retirement income will come from guaranteed sources such as Social Security and a pension?

2. When will you begin receiving these benefits?

3. Do you need income now, or at a later date?

4. How would a rise in inflation affect your future income?

5. Do you have any assets with the potential to combat future inflation?

6. Would you feel more comfortable if we used a portion of your assets to provide guaranteed monthly payments for the rest of your life?

7. Is retaining control of your assets important to you?

8. Which spouse will be retiring first?

9. What is your income plan for the surviving spouse?

10. How can your income plan change if your circumstances change?

These questions all seem very reasonable and designed to get clients to start thinking about the future and how they intend to provide for it.

Additionally, they don’t seem intended to provoke fear or panic, unless of course the client is absolutely phobic about thinking about what life will be like down the road.

The life insurance industry and others have been very intently drumming home the accumulation message in the last few years and there are signs that that message is finally beginning to sink into the public’s consciousness.

Now it has to start a somewhat different rat-a-tat, namely, the income distribution message. Repetition and patience are necessary here, just as they were previously.

Steve Piontek



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