Insurance for the Uninsurable: How Annuities Help Fill the Gap

Insurance for the Uninsurable: How Annuities Help Fill the Gap

With so many uninsured Americans out there, I always think there’s a great opportunity to sell protection-based products. My rational brain reminds me that not everyone is insurable. But don’t let that stop you.

Too often, planners give up when they can’t secure life or long-term care insurance for their clients. Don’t forget to look at other insurance-based options. Annuities can provide some of the protection your clients need when insurance coverage cannot be secured through underwriting.

Here are three ways our products help to fill the gap:

  1. Many income riders provide ancillary benefits, including death benefits and long-term care coverage. Of course, there is an additional cost for these optional features. But, even with the additional cost, these riders could be a good option for people who could not otherwise enjoy the protection of a death benefit or long-term care coverage due to their health conditions.
  1. We’ve previously explained how you can use annuities to not only pass along family wealth, but also pass along family values. When you attach your planning to your client’s values and not just their wealth, you create a stickiness that can’t be beat by any competitor. You might not create as large of an estate as you’d be able to with life insurance, but you can help the family control the disbursement of wealth. In the end, proper estate planning is getting the right asset to the right person at the right time.
  1. Remember, long term care is more of a cash flow issue than a capital issue. Many income riders have an enhanced feature – for some additional cost – to increase the benefit base or payout rate for long-term care events. Again, it’s not going to be as good as a traditional or asset-based long-term care plan. However, it will provide improved cash flow.


Winning Strategy

Because annuities provide valuable benefits in a cost-effective manner, they can be a vital part of your clients’ overall protection plans. When they can’t secure the insurance coverage they need through underwriting, look to annuities to fill some of the gap.


Winning Strategies

Craving More?

As our population continues to age, risks increase due to longevity. And, longevity is the greatest multiplier of all the retirement risks. We were joined by Tim Ash to tackle these risks and offer solutions.

Watch the Replay

About the Author

Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. You can get his latest book, “Winning Strategies: The New Rules of Retirement Planning,” on Amazon.