Why do friends, neighbors and prospects often find themselves in financial difficulty? They find themselves reacting instead of being proactive. Some of these problems could have been solved by purchasing insurance products earlier. You are in this sector, so it is up to you to present a convincing case.
11 problems that could arise on the road
Let’s look at 11 situations where early action involving buying insurance could have avoided the problem.
1. Your friend has spent everything he has earned in the past 30 years. As retirement approaches, they realize that they are unprepared.
Early action: Annuities have an accumulation phase and a distribution phase. They could have started putting money aside early, a little at a time each month. They could have increased their savings by getting bonuses and salary increases. They would have a nice nest egg.
2. Your client owns a business with aging associates. Everyone will die one day. When this happens, their spouse and heirs will want their share of the wealth tied up in the business.
Early action: The objective is to sustain the activity. If the business had purchased key person insurance from the start, it would be willing to buy out the deceased partner’s share of the life insurance proceeds.
3. Your friend has had term insurance for years to “save money”. They felt they were getting the same coverage without the higher price associated with whole life insurance. Now they have discovered that “term” describes a period that is ending. They face much higher premiums.
Early action: If they had purchased whole life insurance, their premiums would have been fixed for their lifetime and they would have accumulated cash value.
4. Your client’s company lost a good hire. It’s a competitive job market. Salary isn’t the only thing a potential new employee considers.
Early action: If the company had a good benefits plan, it would indicate that the company really cares about its employees.
5. Your friend has realized that his aging parents can’t take care of themselves. For decades, their parents told them, “Don’t worry about us. We can take care of ourselves. The sentiment was well-meaning, but they were wrong. They need help.
Early action: If your friend had looked into long-term care insurance for his parents years ago, the premiums wouldn’t have been so high and he would have had coverage available when his parents needed to move into an assisted living facility. .
6. Your client is having difficulty hiring employees to fill vacant positions. They view employees as independent contractors, expecting to hire as needed. The pandemic has changed all that.
Early action: If your client had recruited full-time or part-time employees and provided them with a good benefits plan, he would likely have improved employee retention and been able to attract new employees through the benefits offered.
7. Your friend discovered his work for life… no. They are facing downsizing. It may take them a while to find their next position.
Early action: If they purchased whole life insurance early (and contributed to their retirement plan), they could have access to emergency cash available in the form of loans.
8. Your client discovered that not all health insurance is the same. Why are they letting these people put these commercials on TV! All these seniors look so happy to have made the call!
Early action: It doesn’t have to be so soon! If they called their insurance agent “before calling the number on the screen,” they might have gotten a better idea of the pros and cons of different health insurance coverage options.
9. Your friend has realized Social Security and his 401(k) won’t cover his expenses. Hasn’t someone told them before that Social Security is only part of your retirement income? It’s not meant to be your entire retirement income!
Early action: If your friend sat down with you to discuss financial planning, they would have had an idea of how much they should save for retirement and how to get started.
10. Your client discovered while on vacation that his health insurance stops at the border. Unfortunately, they were on a boat in the Mediterranean at the time. Apparently, “I’m on Medicare” aren’t the magic words they were thinking.
Early action: If your client had informed you in advance of his vacation plans, you could have helped him find medical insurance that would cover him while he was away.
11. Your friend passed away, leaving the family with a mortgage on the house. It’s a two-income household, but they were spending every dollar just to make ends meet.
Early action: If they had purchased life insurance when they got married, they would have received a lump sum payment that could have paid off the mortgage. This would reduce stress on surviving family members.
You’ve heard sayings about the wisdom of buying insurance early. Maybe friends and clients need to be reminded why they might need it.
Bryce Sander is president of Perceptive Business Solutions Inc. He provides HNW customer acquisition training for the financial services industry. His book, “Captivate the wealthy investor” can be found on Amazon.