How to Approach Life Insurance and Financial Risk Spectrum with Your Clients
The above graphic from AIG demonstrates a broad overview of a consumer’s financial risk spectrum over the course of their life. This is a great conversation starter to use with your clients when discussing how they can benefit with Term Life Insurance.
As you can see on the left side, during an individual’s pre-retirement years there are three big risks that get smaller over time: income replacement, mortgage payoff and college expenses for children. Pre-retirement, consumers are typically young, raising a family and beginning to build their personal assets – think homes, retirement funds, and savings accounts. The great concern in this phase of life is that the head-of-household, or spouse, could die prematurely. Life insurance will protect the consumer’s family should this happen.
Replenish the Bucket
Having life insurance provides the financial support loved ones may need in the event of death. For instance, consumers who have young children who need money for education, or a spouse who may need income to pay off the mortgage, and/or other debts accumulated as a couple. Life insurance is a way to “replenish the bucket for the surviving spouse”, said Enrique Torres, Empower’s Life Product Specialist.
Post Retirement years
On the right side of the graphic we can see post-retirement years (typically between 65-85 years old) with three big risk factors getting larger over time: health care costs, a reduction in income on social security and financial risks. As consumers age, a great concern becomes exhausting retirement savings and potentially burdening family members. For instance, expensive medical bills or an unexpected economic risk could derail their retirement. Once again, permanent life insurance offers protection should this happen.
Permanent Life Policy
One of the benefits of a permanent life policy is the ability to build up cash value over time. The cash value within a policy is, in basic terms, the balance remaining after a portion of a premium payment is applied to insurance costs. It is this feature that provides a few different uses for life insurance in retirement and could provide, or at least compliment, an individual’s retirement income.
From left to right of the above graphic, the most affordable solution that covers consumers through each risk and phase of life, is life insurance.
To learn more about Life Insurance, watch the Life & Financial Tools Webinar in the Webinar Video Archive. Agents must be logged into the Agent Portal to view. This video will help novice agents accelerate their life and financial business.
Empower Brokerage is dedicated to helping you produce a prosperous 2019-2020 season. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.