LIFE
4 WAYS TO OPEN CLIENTS’ EYES TO THE POWER OF CASH VALUE
TOP BARRIERS TO LIFE INSURANCE
to spend time when their parents need them most.
The ING U.S. Insurance Revealed study discovered the top reasons why people do not have life insurance. Close to one-quarter of respondents aged 25-34 said they were too young to worry about life insurance. Yet, starting early builds the cash value of the policy and locks in the cost of insurance at a time when age and medical condition typically deserve the best possible prices.
The Time to Engage is Now!
What do you believe is the primary reason people do not have life insurance? Total
Ages 25-34
51% 42% Other financial priorities, such as debt or mortgage Total
Total
Ages 25-34
14% 23% Too young to worry about getting life insurance
Ages 25-34
12% 10%
Total
Ages 25-34
6% 5%
Unsure what type or how much to get
No dependents
ING U.S. Insurance Revealed findings are from an online survey conducted by Praxis Research Partners in July 2012. Respondents were 1,006 adults over the age of 25 with an annual household income of $50,000 or greater. Data were weighted to make the results representative of the U.S. population.
lowers the actual out-of-pocket costs of college tuition.
OPPORTUNITY NO. 4: Supporting Aging Parents
It’s an all-too-common scenario: an aging parent is suddenly in failing health and calling for a lifeline. In some cases, parents may rely on adult children for financial help if medical costs become unmanageable. In other cases, the chil28
dren may need to take significant time off from work to assist their parent. Here, too, the cash value in a life insurance policy can play an important role. A withdrawal of cash value can ease the financial pressure of big medical bills – without resorting to tapping into savings or retirement accounts. Also, by using the cash value to supplement employment income, a son or daughter can ease their work schedule
InsuranceNewsNet Magazine » December 2012
The key to unlocking these benefits is for the policy owner to start planning and putting money into their policy early on. For financial professionals, this means engaging your clients, particularly the younger ones who might not be thinking about life insurance at all. It can take a decade or more to generate significant cash value, so it’s important for the owner to start building the cash value of the policy early on. Starting early has another important advantage: it locks in the cost of insurance at a time when age and medical condition typically deserve the best possible prices. The ING U.S. survey found that 23 percent of respondents age 25 to 34 said they were too young to worry about life insurance. Clients who use life insurance in this way must be careful to stay on top of how their policy is evolving. Interest rates will vary from year to year, as will the performance of various sub-accounts if it is a variable life policy. So, a projection of future cash value made in one year might be dramatically different when calculated just a few years later. To ease this process, some carriers offer a concierge-style service that illustrates how the policy is performing based on interest rates and the actions the policyholder has made, such as premiums paid in or account values taken out through loans and withdrawals. Financial professionals can help open their clients’ eyes to the opportunities that life insurance offers beyond its essential death benefit protection. Unbeknown to many, life insurance can actually play a key role in retirement and college planning, supporting aging parents or even launching a business. Kurt Fasen is senior vice president and head of ING U.S. insurance sales support for the individual life insurance, employee benefits and annuity businesses. He may be contacted at Kurt.Fasen@ innfeedback.com.