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Be a Mind Reader of Client Financial Concerns

Posted by Bill Jackson J.D. CLU on Wed, Jun 10, 2020 @ 12:30 PM

Have you seen the news lately? It looks like the market has rebounded nicely but will it hold? Who can tell. Clients and prospects who stayed the course are to be complimented as the most savvy because they did not bail and lock in substantial losses without recovery. However, if we could read the minds of these good stewards of their retirement assets, many of them would be saying…


I was fortunate this time, but I need downside protection going forward.

After economic downturns it is surprising how short the public’s memory is. Old market habits come back strong. Now is the time to share a new approach with clients and prospects.

Typical pre-retirement and retirement age prospects have 4 types of assets other than their home and real property.

  • Assets earmarked for retirement income
  • Assets for accumulation
  • Liquid assets or cash that can be used in emergencies
  • Assets to provide a legacy for their children or charity

Many prospects have just lumped all their funds into one do-all option, the market. As financial professionals we know that we can provide targeted differentiated asset options that more effectively meet client needs. Let’s look at 4 examples of how a targeted approach with insurance products may be able to help. 

  • The Fixed Index Annuity (FIA) Income Story- Almost 30 years ago Bengen, a noted expert, said you need to limit retirement distributions from a portfolio to 4% to have a decent chance for lifetime income. More recently, Morningstar has reduced this number to 2.8% due to the low interest rate environment. It takes a lot of capital to achieve livable income at these rates. A modern FIA with a Guaranteed Lifetime Income Benefit Rider, an income rider or benefit (sometimes called Guaranteed Lifetime Withdrawal benefits, or GLWB) is an additional feature available with some annuities and generally optional and come with additional costs. Income benefits are designed to provide income options above and beyond the standard annuitization or free withdrawal features in annuities. Offering a stated guaranteed roll up rate or even a performance based rollup coupled with distribution rates in the 5% -6% range could cover the retirement income need efficiently, possibly with less money on a guaranteed basis not a Monte Carlo chance. This can free up assets for accumulation to offset inflationary pressures.
  • Accumulation with Less Risk- Perhaps there is a way to incorporate guarantees by using an insurance product. Modern FIA accumulation products with short lock-in periods, no fees and reasonable liquidity could be that alternative. They provide principal protection with guarantees backed by the financial strength and claims-paying ability of the issuing company, compared to a typical bond portfolio. Many of these products offer uncapped strategies using algorithms designed by some of the very top shelf of money management firms in the industry. The result is strong upside potential without the downside risk.
  • The Asset-Based LTC Solution- What if clients could have their cake and eat it too? Instead of being stale and earning little, why not leverage that $100,000 to $200,000 into an insurance product that could potentially double that amount in event of a LTC need, and if not used for that purpose, a great enhanced tax free legacy for the kids. In addition to a death benefit, LTC living benefits on a life insurance policy can be derived for most products should a qualifying event occur. As your clients' personal situations change; i.e., marriage, birth of a child or job promotion, so will their life insurance needs. Care should be taken to ensure this product is suitable for their long-term life insurance needs. They should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with characteristics of the insured such as sex, health and age, and has additional charges for riders that customize a policy to fit their individual needs.
  • Life Insurance is the Legacy Tool- With the impact of the SECURE Act on the stretch of annuity death benefits, life insurance is an even more impactful tool. IRS required minimum distributions (RMD) or other monies in qualified accounts can be channeled into a product that can provide tax deferral, potential liquidity, and a death benefit that is income tax free. In other words, hypothetically if a 65-year-old male dies tomorrow, the legacy could be 37 times the amount spent in the first year. If he lives to life expectancy, the legacy would still be 1.5 times to total premiums paid and it would be tax free.1

Don’t wait, do not hesitate. There are powerful client concerns that prospects have for the future even if they have recovered somewhat from recent market volatility. By asking the right questions regarding financial guarantees, financial professionals can pierce that veil of possibly unspoken concerns and offer solutions that truly fit with client needs and their risk profile.

For more details about positioning life insurance as the legacy tool and to get an illustration on a specific client you're working with, click below to schedule a call with Bill Jackson, the author of this post:

Schedule a Call

Tags: IUL (indexed universal life insurance)



This content is for informational and educational purposes only and is not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered as investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action.

1Guarantees and benefits are based on the claims-paying ability of the insurance company. Additionally, most life insurance policies require health underwriting and, in some cases, financial underwriting.

This material is intended for educational purposes only and is not intended to serve as the basis for any investment or purchasing decision.  For financial professional use only.  Not to be used for consumer solicitation purposes.


Insurance and annuity products: Are not deposits. Are not guaranteed by a bank or its affiliates.  May decrease in value. Are not insured by the FDIC or any other federal government agency.  Tax-deferred interest accumulation offers no additional value if the annuity is used to fund an IRA under current tax law; additionally, tax deferral may not be available if the owner of the annuity is not a natural person such as a corporation or certain types of trusts.


Partners Advantage – A Gallagher Company and their representatives do not give tax or legal advice.  Accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. Encourage your clients to consult their tax advisor or attorney.


Discussions of the various planning strategies and issues are based on our understanding of the applicable federal income, gift, and estate tax laws in effect at the time of publication. However, these laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Partners Advantage – A Gallagher Company’s interpretations.