Financial Fitness

The spokesperson’s message for LIAM 2017 is about maintaining financial fitness, starting with life insurance.

By Marvin Feldman, CLU, ChFC, RFC

Danica Patrick is once again the spokesperson for Life Insurance Awareness Month (LIAM), which takes place in September. But instead of concentrating on protecting against risk, her message will be about financial fitness.

Why do we think this is important? Let’s review some of the consumer research from the 2017 Life Happens/ LIMRA Barometer Study:

• The most common financial concern of consumers today is the ability to afford a comfortable retirement. Does this fit into our marketing plans? Absolutely! And life insurance is the foundation where this planning needs to start to protect and replace income if the consumer dies too soon.

• People see the need for life insurance, particularly for parents of young children. Eight in 10 say that a married person with one or more young children needs life insurance. We will discuss why they don’t buy later in this article.

• What people say and what they do are two different things. Seventy percent say they need life insurance, but only 59 percent own life insurance. And only four out of 10 people who own life insurance own individual policies. Are you seeing a “disconnect” here?

• People who own life insurance are more interested in other financial products. The research shows that individuals who own both individual and group life insurance own between four and five additional insurance products, and between two and three types of product warranties. Once you make the person a client, you have the ability to go back and talk with them about their other financial concerns. Give them what they want and then show them what they need.

• Retirement is now a top-five reason for owning life insurance; over half of life insurance owners cite saving for retirement as a reason to own the product. Permanent life insurance is superb for a life insurance retirement plan. If the product is properly structured, it can provide tax deferred growth with tax free income.

• Over 20 percent of life insurance owners say they do not have enough coverage, and 39 percent of respondents in the research wish their spouses or partners had more life insurance. So, here is the question. Are you calling on these people? Better yet, are you following up with your own clients? If the answer is no, why not? These people are ready to buy.

Does the consumer recognize they may have financial problems if the primary wage earner were to die? The results of the research show that sixty-nine percent would have trouble paying living expenses in two years or less if they were to lose their primary wage earner. Talk about financial fitness! Could there be a better fit than using life insurance to replace the lost income, and, per our research, those who own life insurance only have enough to cover three years of income. LIMRA suggests people own seven times their income in life insurance, plus final expenses, plus outstanding debt. I don’t think this is anywhere near enough. With today’s low interest rates, 15-20 times income is probably more accurate.

• Millennials overestimate the cost of life insurance by as much as five times the actual cost, and that is one of the reasons they don’t buy our products. Another reason is they have other financial priorities. Really! If they have other financial priorities, how is their family going to pay for these if they have no financial resources or life insurance?

• All this leads back to LIAM and Danica Patrick. Her message is all about maintaining financial fitness, proper financial planning, starting with a base of life insurance to protect income and assets and perhaps leave a legacy for family and community. Go to www.lifehappenspro.org to check out the resources available to you for 2017.

Marvin H. Feldman, CLU, ChFC, RFC, is principal of the Feldman Financial Group in Clearwater, Fla. He is president and CEO of Life Happens and a member of NAIFA-Pinellas.You may contact him at 727-723-9020.