Most people, regardless of age, say that term life insurance is best-suited for them because their needs aren’t permanent. They believe that when they die, their finances will be under control. When they are “older,” their debts will be paid off, their children raised, the value of their real estate higher and easy to sell, they will get an inheritance from their parents, and the stock market over the long run will produce good returns. And these are reasonable assumptions.
However, real life experience shows that during most financial lifetimes, there is very little fundamental change. Basic needs just seem to morph into similar – but renamed – basic needs, and are usually permanent. For example, caring for children becomes college and then caring for aging parents and then their own medical costs. Plus, the Employee Benefits Research Institute reports that about 75 percent of households with consumers between the ages of 55 and 64 have $56,000 or less, aside from the equity in their homes, set aside for retirement.
To manage risk of these basic financial needs, share the facts of real life with your clients and encourage them to consider that permanent life insurance really does make the most sense. In what ways do you encourage these thoughts with your clients?
