The majority of our new clients have life insurance and annuities when we meet them. People are often surprised to learn they are not paying the lowest premiums and they’re also surprised by how much innovation has occurred since they last bought coverage. The addition of living benefits is a great example of a fundamental change to life insurance coverage that is here to stay. On the annuity front, people have no idea that annuities today guarantee their principal will never be lost and some annuities even have Long Term Care riders for small rider fees.
People working with insurance professionals enjoy these four advantages:
- Guidance through the process.
- Automatic reviews.
- Inside baseball.
One of the most difficult industries to successfully navigate on your own is the life insurance and annuity industry. These products come out of the actuarial science world, which makes them understandably difficult for most non-professionals. What makes them impossible to master without professional assistance is the rate of change going on within the industry. There are hundreds of insurance companies fighting for market share by creating unique and innovative products. These companies have some of the brightest and most well educated people constantly improving the products they bring to the markets. Unless you make it your business to get educated and stay educated, you will always do better working with a professional. There is nothing simple anymore about buying life insurance or annuities. Even term insurance! It appears to be a commodity but it is not. Every company’s product is different and there are some very significant differences amongst the carriers.
For example, unless you have studied the issue of conversion deadlines and living benefits, it is impossible to compare apples to apples for a specific policy you may be considering. The living benefits from one company may cover chronic and terminal illness, but not critical illnesses. That could mean the difference between a stroke being covered by your policy, or not. The two products might be identical in price but one covers critical illnesses and the other does not. I recently helped a couple in California. When I met them, they were unaware that living benefits could allow them to take advances against the face amount of a policy. They were unaware that accelerated benefits are a part of many life insurance policies at no additional cost. When agents sell only price, these things are overlooked. Part of our value is to help people determine exactly what they need and want, and then work backwards to find the best product to match those needs.
Inside Baseball – what you really need to know.
No more medical exam! With apply and buy, get up to $5,000,000 of coverage online, in one virtual meeting. There are no doctor records, blood or urine tests, or medical exams that slow down the process. Meetings with agents can be online or in person. The rates for these policies are priced the same as fully underwritten ones. There is no additional cost to apply and buy. Permanent, whole life, universal life or term to 100 can be applied for and issued in an hour.
More and more term policies do not allow convertibility in all years even though life insurance buyers want long conversion periods. This could be unnecessary risk for most people. Before accepting a policy that cancels the conversion option before the end of the term period, we recommend comparing the rate to policies with a conversion option in all years. Only you can determine if one or two percent of premium is worth cutting out important riders and applications. Our job is to give you the right information to help you make the best possible decisions. Why do conversions matter in a term life insurance policy?
A Custom Guide.
Think of a life insurance policy like a brand new Smartphone right out of the box. The phone will have the ability to make calls and do a few other basic things like take photos and go online. I guarantee that your Smartphone and mine do totally different things in addition to those embedded basics. Your phone probably does not have quote engines for life insurance, a NASA photograph app and Tax Facts. Life insurance policies are customized the same way. Basically, they provide a death benefit and some build up equity. But, like the smart phone, that is where the similarities end. My policy includes living benefits, it builds up guaranteed cash values and it pays the death proceeds in guaranteed, equal installments over time. I have different planning goals and objectives than my clients and my life insurance policies and annuities will reflect them.
There are endless examples that make these same points. There is great value in working with insurance professionals who are committed to staying on the cutting edge of the industry. Our new clients have previous life insurance and annuity coverage that we improve from our experience and from our “inside baseball” knowledge of the industry. For example, life insurance companies often retire products because something about them is too good in today’s market. That can be really good information to know and share with our clients. Most people are not aware of how rapidly innovation is occurring and how quickly it is out-dating their current policies.
Jumbo Life Insurance Policies – better pricing matters.
High net worth consumers and ultra high net worth consumers are more likely to buy permanent life insurance to solve liquidity problems upon death and to generate tax free distributions from privately funded pension plans. By far, permanent life insurance is the most economical way to purchase insurance for long term needs. In addition to the superior net cost, it is versatile and flexible. For people buying jumbo life insurance policies, you benefit by being aware of the advantages that were specially designed for jumbo life insurance policies.
“I’m all set” is one of the most common beliefs people have about their insurance coverage. Most of the time, they’re not.
A Regular Review is the Key.
A good life insurance professional is encouraging their clients to review their policies to learn about worthy suggestions and recommendations. A good agent will bring ideas and concepts that might enhance the coverage for their clients. If you are not getting this service currently, you will with us. Please call at 561-771-4647 or email me at TB@LifeCyclePlanners to get started. We offer a complementary conversation about anything on your mind concerning your insurance coverage, succession plan or retirement plan.
Also published on Medium.