In “Is Your Marketing Message Missing the Mark?” I observed that agents in the middle market who use estate planning as a pathway to sales were wasting their time. That’s because the merely well-to-do don’t prioritize estate planning enough to make it an intuitive entry point for a life insurance discussion. That could change if, as I’ve suggested, estate planners broadened their definition of an “estate plan,” but that’s for another day. I still see agents clinging to the same estate planning-based marketing, so I thought I might restate my arguments.
Broadcast on the Right Frequency
In the referenced article and many others, I discuss the classic financial lifecycle stages of accumulation, conservation and distribution. Depending on their age, circumstances and other factors, merely well-to-do couples are laser-focused on accumulation, meaning building net worth, or conservation, meaning securing their own well-being for the rest of their joint lives. They see no need to plan for distribution because they consider providing for the surviving spouse a part of conservation and not distribution. The children will eventually get what they get, with no federal estate tax and a stepped-up basis for applicable assets, and will do with it what they will. The point is that, absent concern for a child’s special needs, for example, the couple’s planning is done. The buck stops there!
Therefore, unless asked, agents who speak to these clients about distribution and generational legacy planning as a bridge for a life insurance discussion are tilting at windmills. Worse, they’re showing that they don’t understand what these clients feel they’re up against regarding the guidance and resources they need to build their asset base and then plan for and finance an ever more expensive “old age.” And, interest in distribution will only fade further as the experts keep moving the goalposts with their predictions of longer life expectancies, which is another reason estate planners must change their business model.
It’s still about visualization and optionality.
There’s plenty of need and rationale for life insurance in accumulation and conservation planning, especially when considering these stages as a continuum. That means there are plenty of opportunities to sell it. But, it takes a knowledgeable and well-resourced financial planning-oriented agent to illuminate those needs in terms that clients can understand and act on. As I’ve written in “Life Insurance Planning for the Merely Well-to-Do,” it’s about visualization and optionality. The agent’s role is to help clients visualize their future needs and concerns and then show them how permanent life insurance, purchased relatively early on, can expand and eventually lower the cost of their options for meeting those needs and addressing those concerns.
While I’m gratified to see more and more postings on the value of cash-value life insurance as a lifetime planning tool, I sense that these articles are focused on the income tax benefits of life insurance, benefits that are arguably less meaningful and even less demonstrable to well-informed, merely well-to-do clients after the enactment of the One Big Beautiful Bill Act.
Uncertainty is Creating Opportunity
I’ve been at this game for a long time and, whether as an advisor or a client facing all those complexities and expensive choices that I write about, I believe life insurance is as vital a component of long-term planning as it’s ever been. Why? Just look at what’s happening in politics, the workplace, health care and public and private benefits and then consider how permanent life insurance can provide security, certainty and flexibility in the decades ahead. It’s now up to agents to mine in the shaft where the gold is. Once they do that, they’ll be pleased to find that not only will they sell more life insurance, but they’ll also have a more productive platform for networking with estate planners. Try it, you’ll see.
#Shifting #Focus #Estate #Planning #Lifetime