To paraphrase an old ad slogan, Brian H. Ashe, CLU, knows life insurance. He’s a past president of the Million Dollar Round Table and president of Brian Ashe and Associates Ltd., an insurance sales organization in Lisle, Ill.
To paraphrase an old ad slogan, Brian H. Ashe, CLU, knows life insurance. He’s a past president of the Million Dollar Round Table and president of Brian Ashe and Associates Ltd., an insurance sales organization in Lisle, Ill. He’s also a frequent speaker and writer on financial planning issues, having started in the insurance and investment business in 1969.
So if anyone knows about life insurance, it’s Ashe. That’s why Senior Market Advisor asked him about the product and how it pertains to seniors (75 percent of his practice is made up of people over age 55).
Here’s what he had to say.
SMA: What life insurance products are proving popular with seniors and boomers?
Brian H. Ashe: Permanent life insurance, whether it’s whole life or universal life or universal life with no-lapse guarantees. All of those products are proving to be attractive to seniors because they believe that their needs are permanent and term insurance usually has a termination point when the premiums you’ve been paying at the relatively low rate suddenly start increasing. I don’t think seniors are fond of being exposed to those types of increases in the years in which they are not making any income.
SMA: What sales techniques would you use to sell to seniors?
Ashe: Seniors have a better perception of risk. If you know you are not going to live forever and you know that investments don’t always give you great returns–and if you know many of the things in life are unexpected–you are more sensitive to risk. There are two primary risks that they have to pay attention to: longevity risk, because they have to make sure they have enough money to last as long as they do, and investment risk.
We know from an investment risk [standpoint] that since the Depression, every six, eight or 10 years we have reversals in the value of our holdings. So if I were a senior and I knew that there was a chance that either I or my spouse could live for another 30 years, and that means there has to be enough money to pay living expenses, increased medical costs, increased long-term care and exposure to inflation over 30 years, then I must to find a way to handle both that longevity risk and the investment risk and life insurance happens to be the ideal product to do that because at the moment of death there is a whole bunch of income and often estate tax-free dollars that helps to refill the bucket.
So the approach to speaking with seniors is to go over the increased risk that seniors are now exposed to by the fact that they live longer and since they are not making income anymore, they are exposed on investment risk on what they were able to accumulate during the first 40 or 50 years of their lives.