“HAVE A HAPPYDEPENDENTSDAY”!
by: Mark D. Milbrod, CLU, CLTC
No, that’s not a typo. That’s what I meant. Independence Day is upon us, but with all the freedoms that we celebrate, it is fitting to talk about the freedoms that we can provide for our families, our heirs, our Dependents.
There is nothing worse than witnessing a catastrophic event that can wipe out all that we have worked for our whole lives. Too many times, we see this happen to our clients, friends and others and it all comes down to poor planning. We live in a time where there is so much discussion about outliving retirement funds, what to do in the event of a long term care event, etc. As advisors, we have the ability to discuss a myriad of products and planning techniques with our clients to assure that they have done the proper planning to protect themselves (or their Dependents), against unforeseen life events.
What can we do to fill in the gaps? The short answer…A LOT.
Life Insurance – of course, the simple answer is Life Insurance. This has always been there to help Dependents get back on their feet. It can provide so many things; continued income, college educations, provides life long income for survivors, estate liquidity and the list goes on.
Long Term Care Insurance – providing a policy that will help offset the costs associated with a health care event requiring nursing home or home health care needs. This can be accomplished on an individual basis or under a Blended-Life design.
Disability Income Insurance – providing the replacement of one’s income with benefits should that person be unable to provide income due to some type of health impairment.
Income Annuities – for some clients, we can provide them/surviving spouse with an income that they can never outlive.
The above list is the more traditional approach for Dependent planning. But in today’s marketplace, we can go many steps further…
Living Benefits have become the popular trend in our industry and if you are not taking advantage of them, it’s going to cost you potential clients. Living Benefits enhance the traditional planning methods outlined above and ease the burdens on their Dependents. Here are some of the Living Benefits that you should be implementing with your clients:
Long Term Care Riders– LTCR’s can be added to Life Insurance policies and will allow your clients to access their death benefits should they have a life event requiring Long Term care needs. Although they come with different access definitions (e.g. indemnity v. reimbursement), the end result is the same, an ability to use a life insurance policy as a means to ease the burden on Dependents. They are even available on a rated basis for those that could normally not qualify for an individual LTC policy. Now, when a client objects to buying life insurance because “they won’t benefit from it,” in this case they can. This is a powerful tool to use and a great innovation to a standard life insurance policy.
Chronic Illness Riders –similar to the Long Term Care Riders, these benefits allow early access to death benefits for permanent types of illnesses. Once again, easing the strain on Dependents.
Guaranteed Income Riders– through the use of new annuity product designs, these riders can guarantee income to annuitants based upon the high watermark values of a contract. This allows individuals to receive a higher guaranteed income, regardless of market conditions that can deplete values prior to retirement.
Disability – for those of you in the term marketplace, there is a policy available to pay premiums and possibly convert a policy to something permanent in the event of a permanent disability.
Living Benefits have taken the traditional approach to selling our products and taken them to a new level. These benefits are designed with an underlying theme for you to bring to your clients…easing the burden on their Dependents.
So, as we celebrate our country’s independence with our families, eating our hot dogs, hamburgers and watching fireworks, let’s think for a moment about how we assist our clients in protecting what is most important to them and…
HAVE A HAPPYDEPENDENTSDAY!