Back to Basics for Life Sales

Why a movement back to the basics? In some cases, clients are now, perhaps again, concerned with cash flow. Others are re-focused on basic transactional planning to maintain sales, rather than long-term multifaceted planning; although these may still be in progress, many producers see these cases as stalled and are moving to quicker, simpler sales. While every producer’s circumstances are unique, there appears to be a general sense that tried and true basic planning approaches have come full circle and are now back in vogue for meeting clients needs today.

Policy Review – For those clients with existing policies, a periodic review may be in order for a variety of reasons ranging from adequacy of coverage to whether existing coverage can be improved through policy features or saving policy costs. Policy reviews are a tried and true approach to opening up conversations with clients.

Term Coverage – When clients are looking to protect a surviving family, cover the loss of a key person or even lock in coverage until more cash flow is available, term offers a lower cost entry into life insurance. It’s one that may remain in place or mark a temporary hold on insurability until permanent coverage is appropriate.

With widespread employment insecurity, now is an especially good time to review coverage with clients and discuss filling gaps with affordable term life insurance. Even if your client is confident his or her job is secure, having a separate term policy in place, in addition to employer group coverage, can make sense to more adequately protect a family’s future.

Cash Value Accumulation – No matter what today’s economic circumstances may be, clients will still look into the future and try to accumulate funds for retirement while protecting their families. Cash value accumulation products still have a place for the right client.

Moreover, when clients are concerned about their overall portfolio, most insurance carriers remain investment grade, maintain strong liquidity ratios and offer a safe haven for a portion of client assets.

A Closer Look at the 1040 – This is a long standing approach for producers to open up a dialog with clients. Reviewing 1040s with clients is an effective way to help them understand and address unresolved financial matters. These issues can range from discussing a client’s dependents and learning of concerns for a special needs child or funding college tuition, to discovering a client’s charitable passion or desire to protect a mortgage.

Long Term Care Coverage – With our aging population, this form of coverage that now has a permanent place in the insurance landscape. Clients wishing to maximize their premium dollars might consider marrying life insurance and long term care coverage together in the form of a rider. This may be especially attractive to insureds who do not want to pay premiums for traditional long term care insurance they may never need. Should the need arise, a rider approach accelerates the life insurance policy death benefit to help pay for long term care expenses. But, if long term care is never needed, the full death benefit is paid to the beneficiaries. If you don’t need it, you don’t lose it. As with all policies, rider selection is critical. Here, “ease of use” is key, particularly if an older, impaired, client might be the individual making the claim.

Leveraging Life Premium Dollars – For decades, producers have shown clients ways where they could leverage their premium dollars through the death benefits offered by life insurance. This ranges from leveraging annual exclusion gifts to planning around a client’s generation skipping transfer tax exemption or credit shelter trust. With proper planning, clients can leverage a portion of their assets to help their overall wealth transfer.

Not all of these concepts will appeal to any every client or producer, but one or two may fit many situations. In time, other approaches will rotate to the forefront. If you are in the business long enough, however, you will find that proven planning basics always re-surface. In many ways, there is nothing new under the sun.

Mark Teitelbaum, JD, LL.M., CLU, ChFC (mark.teitelbaum@axa-equitable.com) is vice president, advanced markets, for AXA Distributors, LLC. AXA Equitable Life Insurance Company is the parent company of AXA Distributors, LLC.