People tend to think about life insurance in simple terms — you buy it because, well, you are going to die one day, and just in case that day comes sooner than you’d like, you should be prepared. As a result, clients often relate life insurance to a death benefit, but as we in the industry know, it can be much more.
In recent years, there has been a lot of innovation and change in the life insurance industry. Today, life insurance can do more than ever to help preserve the lifestyles of both policyholders and beneficiaries, with death benefit and living benefit options that can address a variety of financial needs, including:
- Income replacement
- Paying college tuition
- Providing tax-advantaged retirement income
- Offering financial protection in the case of a disability or critical illness
- Diversifying investment portfolios
- Transferring wealth efficiently, and in a way that is tax-advantaged
- Planning for business continuation
The flexibility of many life insurance products — coupled with the financial security they can provide — may contribute to a feeling of empowerment among life insurance policyholders. As an example, Lincoln Financial Group’s recent “Measuring Optimism, Outlook and Direction (M.O.O.D.) of America” study finds that 68 percent of life insurance owners feel somewhat or very prepared for retirement, compared to only 44 percent of those who do not own life insurance.