I started my company in the summer of 2001, and since that time I have always measured my growth by the amount of assets I manage. This includes both assets under management (AUM) through my RIA firm as well as fixed annuities. I speak at agent conferences around the country, and many of the advisors I speak with also focus almost exclusively on assets captured.

However, several years ago I began to realize I was overlooking a very critical need for my clients; and by not servicing this need, I was not only missing out from additional profit centers, but I was also allowing other advisors a potential foot in the door.

I was focusing almost entirely on the investment, income and estate planning needs of my clients. While I feel very confident that I’m doing everything I can to help manage the investment risks of my clients’ portfolios, I was missing two critical risks:

  1. The risk of one spouse significantly outliving the other.
  2. The risk of long-term care.

I believe that the insurance industry has done a fantastic job in meeting these needs. Of particular interest to my clients are asset-based hybrid products which combine many of the benefits of both life insurance and long-term care insurance.

I like the idea of asset-based products because they continue to be an asset on the client’s balance sheet. While it is primarily an insurance asset, some of these hybrid products provide a cash asset as well. But, either way, if the client holds onto the policy, it can provide some kind of benefit either for long-term care, at death, or both.

Peace of mind

I am aware that much of the focus in the life insurance industry focuses on estate planning and wealth transfer. However, I have found that serving the needs of the surviving spouse provides tremendous peace of mind for my clients, and by using accelerated benefit riders I can help supplement long-term care needs as well.

When I work with clients who are primarily concerned about long-term-care risks, I use a product that multiplies the death benefit for long-term care. While this type of product will usually provide for a lower death benefit than with traditional insurance, it often provides a much higher limit for long-term-care needs.

If you do not write a good bit of life and asset-based long-term care business, I recommend you begin reviewing your client files with these critical risks in minds. How much income will be lost when one spouse dies? Have they covered the risk of long-term care? If so, does it provide enough coverage? What if the long-term-care premium increases dramatically?

By identifying these risks, you’ll not only serve your clients much more effectively, but you’ll increase the number of profit centers in your business.

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