As you heard last month, WAP recently joined forces with Brokers Alliance to make life insurance products more accessible for WAP agent cross-selling. Now that you have access to Brokers Alliance products and expertise, let’s chat about how you can use those products to your advantage.
As health insurance pros, you often help retirees or near-retirees to make decisions about Social Security benefits and Medicare. In the course of these conversations, you’ve probably noticed that this audience has three major fears: outliving retirement savings, escalating health costs and paying for long-term care.
Fortunately, you can now leverage your access to Brokers Alliance to help your clients with a broader spectrum of financial planning challenges. Below are a three ideas to address their three greatest fears.
#1: Suggest life insurance as a source of income for surviving spouses
If your clients are concerned about outliving their money, life insurance may be a solution. According to the Social Security Administration, 74 percent of the elderly who are singled or widowed, rely on Social Security benefits for 90 percent of their income. Without an additional source of income, a surviving spouse may suffer financially as well as emotionally. Consider as an example: both spouses of a retired couple are collecting Social Security benefits. When one spouse dies, their benefit ends, significantly reducing the household income. The couple formerly met their monthly household expenses based on the combined monthly benefit. Many monthly expenses are not reduced when one spouse dies. Yes, the grocery bill will decrease, but it still costs the same to heat and cool the home. If there is an outstanding mortgage, the mortgage payment doesn’t decrease. Items like home repairs, auto repair, and homeowner insurance most likely aren’t reduced.
With a death benefit from a life insurance policy, the surviving spouse could more easily make ends meet. And, the death benefit is usually tax-free. Regrettably, 47 percent of Americans have no life insurance. As you advise clients about Medicare supplement products, ask about life insurance. Many carriers offer simplified issue life insurance products specifically for this market. Clients often become interested in life insurance protection when presented with the facts.
#2 Compete against health carriers by offering independent, multi-faceted services
If your clients are concerned about escalating healthcare costs, educate them on why its important to work with an independent agent, like yourself to receive unbiased advice and the widest array of product and rate options. Carriers are going directly to consumers to sell their Medicare supplement products. In 2013, 44 percent of insurers use direct to consumer sales channel. Last year, more than half of carriers, 55 percent, competed with financial professionals for Medicare supplement sales.
A financial professional can stem this tide by attracting clients to the practice by offering broader services to clients, including education in choosing the best option for their situation and access to multiple products. Especially for first time Medicare applicants, enrolling in Medicare and selecting a supplemental product or choosing Medicare Advantage can be confusing and troubling. For the inexperienced, it is difficult to decide between Medigap or Medicare Advantage. Beyond that, consumers often lack confidence choosing the product and carrier. Building client confidence through education often creates trust and openness to other services.
#3 Offer long-term care planning advice
If your clients are concerned about paying for long-term care, you can offer some advice in that area as well. You’ve probably read about the Department of Labor’s (DOL) Fiduciary Rule, the most impactful legislation for financial professionals since the 80s. Professionals who receive compensation to advise clients about retirement accounts are now subject to the Best Interest standard. However, one of the objectives of the DOL is to provide pre-retirees and retirees more encompassing guidance that includes conversations about the need for long-term care planning. If life insurance and annuities are your area of expertise, you may be in the best position to suggest long-term care planning. Today’s LTCi products are priced to avoid future rate increases, in fact, a Society of Actuary study, Think Tank for Long-Term Care Insurance, concluded that 90 percent of long-term care insurance products priced today are unlikely to need a rate increase. In addition, many life insurance products now offer long-term care riders, which present an affordable alternative to a stand-along long-term care insurance policy.
The affiliation of Western Asset Protection and Brokers Alliance gives advisors a unique opportunity to offer clients a more complete package. Whether your focus is life and annuity products or Medicare supplements and long-term care insurance, the guidance you can offer clients now encompasses both. Call Western Asset Protection at 800-955-5390 for more information about offering even more to your clients.
Also, make sure to download our free 2017 AEP Overview and Planning Guide for Agents to get your renewal season started on the right foot.
