As a life insurance agent, it’s easy to understand the importance of having an end-of-life plan in place. But for most people, it takes some kind of life-changing event before the thought of needing an estate plan or life insurance ever comes to mind. My company, Trust & Will, conducted a survey and found that found that 66.5% of people between the ages of 30 to 70 were either entirely unfamiliar with estate planning or understood only the basics.
About 41% of baby boomers — who are all at least 56 — have yet to even create a will or living trust.
Many of your prospects who are having children lack wills.
So do many prospects who are having grandchildren.
Why is this a problem for you and your clients?
Because the reality is, the increasing number of people who pass away without the necessary preparations in place, such as a proper estate plan and life insurance, leads to more and more families facing undue distress.
COVID-19 has increased the risk that boomer generation grandparents will go suddenly, without leaving any indications of what kind of end-of-life care they wanted, what they wanted to go to their favorites causes, how they wanted to allocate assets to children — and what they wanted to pass on to their grandchildren.
COVID-19 may have given you a new chance to get boomer generation prospects’ attention, and to urge them to think about end-of-life and estate planning.
Consumers who are grandparents may be at or near retirement age.
They may have live far away from some or all of their children and grandchildren, and COVID-19 may be further reducing opportunities for physical contact with their families.
Of course, a majority of COVID-19 cases have not been fatal, even for older people. But it’s natural for consumers who are grandparents to be thinking about to protect their legacies, and none of us know what tomorrow will bring.
That’s why the procrastination surrounding end-of-life planning has to stop.
Having an estate plan and life insurance plan in place can protect consumers from the unknown, and it can also give those consumers greater peace of mind.
1. To Protect Their Families
The easiest way to show clients in their 50s and 60s how important it is to prioritize end-of-life planning is to highlight the benefits that come with doing so, as opposed to focusing on death and dying.
For example, the greatest benefit that comes with having an end-of-life plan (which includes an estate plan and a life insurance policy) is the ability to protect the clients’ children and grandchildren.
Oftentimes, if clients don’t consider themselves traditionally “wealthy,” they assume that having an estate plan is unnecessary. Unfortunately, this misconception leads to people passing away without a will, thus forcing their families into lengthy probate proceedings that could have been avoided.
Help clients understand that an estate plan isn’t just about money and the transferring of wealth. Baby boomers who are not wealthy need an estate plan to:
- Make arrangements for family keepsakes and other personal items.
- Prepare for long-term health care needs.
- Designate guardians for minor children and dependent grandchildren.
- Distribute assets.
- Clarify funeral arrangements and final wishes.
- Accommodate the possibility that the current inheritance tax rules could change.
Additionally, your clients can use a life insurance policy to pay not only for end-of-life expenses, but also to make payments on a mortgage for a surviving spouse or to set aside for a grandchild’s college education.
2. To Have Control and Peace of Mind
While protecting families is always a top priority for any life insurance agent’s clients, an estate plan and life insurance policy can also help individuals feel as though they have greater control over their legacies even after they’re gone. This sense of control gives people that much-needed peace of mind especially during such unprecedented times. So which key documents should you encourage someone to create so that they can secure that feeling of control and peace of mind? Prioritize the following:
- Will or trust.
- Durable power of attorney.
- Healthcare power of attorney.
- Living will or health care directives.
- HIPAA authorization.
- Guardianship designation (if you have children).
- Life insurance plan.
Keep in mind: an estate plan and life insurance are not synonymous, but instead, parallel issues under the end-of-life planning umbrella. life insurance gets paid out upon death to whomever is listed as the beneficiary on the policy and a person’s life insurance is often a big asset to account for in his or her estate plan. Both work in conjunction to ensure that a person’s final wishes are adequately met.
3. To Update or Amend Their Existing Plans
Is your client a baby boomer who already has an estate plan or life insurance policy in place? Let them know that now is the time now to update or amend their plans.
While a number of significant life events typically occur earlier on in a person’s life (i.e. getting married, having kids, or buying a home) there are plenty that can arise between the ages of 56 and 76. These include receiving inheritance, acquiring new assets, getting re-married, having grandchildren, moving states, and more; all of which are appropriate reasons to re-evaluate an estate plan.
Perhaps your client’s primary beneficiary passes away before them or they decide they want to donate a large sum of money to charity later on in life — these types of wishes need to be reflected in an estate plan sooner rather than later in order to avoid negative repercussions.
The fact of the matter is, no one likes to think about their own or a loved one’s death. However, as the world continues working together to overcome the current pandemic, it’s important that life insurance agents take the time to help their clients safeguard their families and legacies by prioritizing end-of-life planning.
Patrick Hicks is head of legal at Trust & Will, an online estate planning service.