At the end of 2017, I shared some meaningful statistics about the impact our industry/business has on so many lives. It prompted me to pause and start asking more questions about why we’re really in this business. To be truthful, I’ve been frustrated by the anemic growth the industry has experienced in protection products.
I’d like to start with a couple of questions: Is every family and business you serve ready for one of life’s moments that could strike at any time? Have you proactively put a risk management strategy in place for each of your clients?
I ask that you read this very closely as I hope it inspires you to act.
Toward the tail-end of last year, I reached out to our friends at Protective Life. I asked them a question they hadn’t been asked before (much to my surprise): “How many death claims have been delivered because of our long-standing relationship?”
It took about 90 days to get the information sorted and assembled, but I just received a file from them and goosebumps ensued – as did a feeling of connection and pride to our work and this industry. I couldn’t believe that over the course of our relationship with Protective Life, we have delivered 453 claim checks to beneficiaries totaling more than $152 million – $152,582,605, to be exact. And that’s with just one of the carriers we work with.
What was sobering for me was looking at the names on the list, knowing that someone cared enough about their family, their business or their favorite charity to own insurance. I thought of the lives that were impacted. It also led me to notice the names of the advisors who helped place that coverage. They had the courage to have the conversation. I tried to envision those conversations, as well as the tears and words that were exchanged when the advisor delivered the claim check.
I know what it’s like, as I’ve delivered several of those checks myself. Trust me, people aren’t talking about their asset allocation, rebalancing and tax management in those moments.
I’m trying to figure out why more advisors don’t have conversations around planning for the moments in life we’re all going to deal with. It just seems the focus today is on AUM growth – life insurance and other protection products can wait for another time. All advisors are going to have clients who pass away, become disabled, need long-term health care or live longer than expected. So why aren’t these conversations taking place with each and every client?
I know insurance is a very personal thing to discuss, and there are a lot of moving parts. I also know the process of acquiring coverage isn’t straight-through and simple. But that’s where we come in.
We are your risk management partner/consultant. We will be here to help you design, implement, place and service your clients’ policies. You don’t have to get your hands dirty; we do the heavy lifting. You just need to bring your heart and courage to the planning table.
I will end my diatribe by saying “thank you” for giving us the opportunity to serve you and your clients. Go out and make it happen! You will be making a difference in someone’s life.
One of our key programs at Ash Brokerage is our Life Audit. This program looks at currently in-force life insurance policies and performs a stress test to see if the policy is still performing to meet the client’s needs.
When we first introduced this program, we were inundated with requests on policies that, in the advisors’ words, were blowing up. Most of these were interest-sensitive universal life policies or variable universal life policies that had not performed according to the original illustration that was presented to the client.
Let me be clear: Nothing was wrong with any of these products. They were solid policies sold by, mostly, reputable insurance agents and financial advisors. The problem is they were sold with unrealistic long-range interest rates or woefully underfunded premiums and ignored for long periods of time.
This UL implosion has led most advisors to run 180 degrees in the other direction and continually ask for more guarantees, sometimes lifetime guarantees, in order to protect their clients. Guaranteed UL isn’t a new concept, but in the past 15 years it has been the highest sold universal life product in the industry.
Many of these sales are appropriate, as older clients are using insurance to take care of potential estate taxes or leaving a legacy to their families or a favorite charity – I love to see that type of planning and appreciate the positioning of the guaranteed product.
However, many illustration requests we receive are for younger individuals who, by positioning them into a GUL, are being blocked by the many other benefits that a life insurance policy can provide.
If you were buying a car and the dealer said it was guaranteed to last three years or 36,000 miles, whichever comes first, you would be hesitant to purchase it. While three/36,000 may be the max warranty, most dealerships tout their brands’ reliability and often show their vehicles still performing at 200,000-plus miles. You want to buy a vehicle based on what it can do, not what it’s guaranteed to do.
In “Apollo 13,” Gene Kranz told his team “I don’t care what anything was designed to do, I care about what it can do.” It’s the same with life insurance. Sure, the basic benefit of life insurance is if you pass away, it will pay a tax-free benefit to your beneficiaries. But what else can it do?
A properly designed permanent life insurance policy can do a lot for your client. However, if you’re only asking for that “max guarantee,” you may be limiting their options and hurting your own credibility.
© 2018 Ash Brokerage LLC.