“If you do not sow in the spring you will not reap in the autumn.”
We’ve all heard that “April showers bring May flowers.” This expression is actually a good analogy for us to use with our senior clients right now. After the economic storms we’ve experienced during the past several months, this spring in particular is a good time for us to sit down with our clients to prepare for better times.
During these discussions, it is important to communicate to our clients that life insurance is one of the few financial products that is guaranteed–whatever money is put in will be secure, even in the most turbulent economic market. For our clients who have been battered by stock market declines, the security of life insurance may be more compelling than ever.
Remember this: We should remind clients that life insurance can be a highly versatile solution to many of their financial challenges. Of course, it provides them with the confidence and piece of mind that there will be income, capital gains and, when properly structured, estate-tax-free dollars for their loved ones and beneficiaries after they die.
Life insurance can also be a solid investment. In the past, many advisors and clients alike viewed life insurance as a weaker option claiming that insurance company guarantees of 4 percent increases in cash value were inferior to alternatives, including real estate and securities. Today, the same guaranteed 4 percent cash value increase might just be one of the best investments in a senior client’s portfolio. Do you know of any real estate or securities that have increased 4 percent in value during the last year?
We must also remind our senior clients that many life insurance policies have unique features that allow them to accumulate cash values that grow tax-deferred and can be used to supplement retirement income or fund an emergency or opportunity.
If a client already has life insurance as an asset class in their portfolio, revisit it to make sure the client is taking advantage of all that the policy has to offer. If it is a policy that is on a universal life or variable life chassis, make sure that it is being properly funded so that it delivers the intended results.
If a client does not have life insurance, now perhaps more than ever is the best time to advise that they consider it. It is important to remind our senior clients that people in their 50s, 60s or even 70s can qualify for life insurance at good or even prime rates.