Most of us are well aware of the risks of inflation and losing money in a bad market. However, most couples face two other significant risks to their lifestyles during retirement. One of those risks is the threat of needing long-term health care. The other is the threat of one spouse significantly outliving the other, and the income loss affecting the surviving spouse.
One of the best ways to address these two risks together is with life insurance. The insurance industry is moving more and more in the direction of providing long-term care benefits that are connected to life insurance, whether it’s an accelerated death benefit for long-term care needs, or an asset-based long-term care plan that leverages the death benefit into a much greater long-term care benefit. These benefits can provide our clients with tremendous protection against these two risks.
I also believe it is important to show clients that life insurance is an alternative asset class in their portfolio. While it may or may not be a cash asset, depending on the product chassis you use, it is a valuable insurance asset that can provide for long-term care and/or survivor needs. We should always be communicating life insurance as an alternative asset in their portfolio to help address these risks, and client reviews should include this insurance asset.
My experience has been an eye-opener. While I previously realized many of my clients do have a need for life insurance, the need is much more significant than I originally thought. Furthermore, when used properly, life insurance can provide a significant enhancement to the services you provide for your clients. When implemented successfully, it can help transform your business.
This product addresses two major risks in retirement.
Jim Brogan is president and founder of Brogan Financial in Knoxville, Tenn. He was named Senior Market Advisor’s 2011 Advisor of the Year.