3 Insurance Tricks You Should Be Using For Your Clients

(2 Minute Read)

Being a good advisor to your clients means being able to pull some useful tricks out of your sleeve. When it comes to managing your senior clients’ insurance, these are three tricks you’ll be happy you have.

Convertible Term Life Policies

Term life insurance policies are more or less a safety net than permanent life insurance policies. Because term life policies require for the insured to pass away within the given life of the policy, convertible term life policies are the best-case scenario for seniors. Death is never certain, and it’s hard to tell how long we each get in life, but having a policy that can be converted to a permanent life insurance policy can ensure that the death benefit carries until the policy holder passes. It’s often difficult for clients to justify the cost of a term policy knowing that the policy offers no ROI, but with the convertible option, it can become a policy that works in their best interests. Plus, convertible term life policies allow the holder to convert to permanent policies without having to prove that they are in good health.

Irrevocable Life Insurance Trust

You know about trust funds, but are you aware of ILITs? Irrevocable Life Insurance Trusts are holding devices, essentially removing the life insurance policy from your estate. When the owner passes, the money from the insurance policy goes directly into the trust where it can be administered to your client’s beneficiaries. By doing this, the death benefit doesn’t become taxed like it would if it was administered wholly and directly to the beneficiaries.

Life Settlements

One trick that many advisors don’t realize they have is the opportunity to sell a life insurance policy through a life settlement. In many cases, life insurance policies become either unneeded or unwanted, whether it’s due to a lack of beneficiaries or that the premiums become a burden for an underperforming policy. Life settlements are the sale of a life insurance policy in the secondary market, just like selling a home. In life settlements, the policy is sold for an amount greater than the policy’s surrender value. This often allows seniors to add to their retirement funds, provide their advisors with additional liquidity to help manage their wealth, or simply offer your clients additional cash to do the things they’ve always wanted to: travel, buy a new home, or pay for their grandkids’ college.

Life settlements work best with permanent life insurance, so convertible term life policies are great options for life settlements as well. In addition, policies can be sold out of ILITs, which is perfect for policies that are no longer wanted, needed, or have become cost prohibitive.

If you have a client that might benefit from a life insurance policy, check out our Qualification Calculator to see if they qualify today!

Download our free resource, Serving Senior Clients, for more information about how you can unlock a powerful new source of financial liquidity for your clients today.

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