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September 25, 2017 at 06:14 AM
When it comes to talking to your clients about life insurance, there’s no doubt most would rather focus on maximizing their lives today versus thinking about protecting their financial future, if the unexpected happens. For example, a recent consumer survey by Voya Financial found that almost half (45%) of Americans were willing to sacrifice their financial security if it meant keeping their smartphones, cars and vacations.
It’s clear people today are very much interested in living in the now — but that doesn’t make owning life insurance any less important when it comes to protecting their loved ones. Plus, life insurance is an important piece of any holistic financial plan. So how do you broach what is often a dreaded conversation and get your clients to pay attention? Perhaps it’s time to flip the script. While death benefit protection is the foundation of any life insurance policy, focusing on the additional living benefits can make for a much more upbeat and positive conversation. Plus, it’s a message that appears to be resonating with more and more Americans.
(Related: Making the Nest Egg Last: Best Products for Senior Clients)
For example, indexed universal life (IUL) insurance is one of the fastest growing products in the industry, with sales increasing 9% annually since 2013, according to LIMRA. What makes this product so attractive? The flexibility and versatility it can offer clients. And perhaps the biggest selling point is the ability to generate cash value inside the IUL policy that can be used in a number of ways.
Admittedly, an IUL policy is not right for everyone. But given this recent sales trend, if you’re not offering this solution to your clients, perhaps it’s worth another look. More than likely, your clients understand life insurance death benefits can help protect their loved ones from being put in a precarious financial position. But most probably don’t realize how an IUL policy can help them — the insured — while they’re still alive. Here’s a list of five possible living benefits to highlight during your next conversation, so your clients can decide if an IUL policy is right for them.
1. Source of Cash for Financial Emergencies
If your client has a financial emergency, they could withdraw or borrow cash values from their IUL policy to meet it. In fact, they could use policy cash values for a wide variety of financial needs, including home repairs, college expenses, business operations and debt repayment. They could even use it to pay for damage from storms or natural disasters for anything that isn’t covered by property and casualty insurance — like we recently saw with hurricanes Harvey and Irma.
2. Supplemental Retirement Income
When retired, your client could withdraw or borrow policy cash values to supplement income they receive from other sources, such as Social Security and pension benefits.
(Image: Thinkstock)
