Build Your Book by Serving Affluent Clients’ Life Insurance Needs

life-insuranceLife insurance is the chameleon product of the financial planning industry. Mention life insurance and 68 percent of people immediately think of payment for final expenses. However, it’s important to remember that life insurance can be used for so much more than the basics.

Product guarantees and tax-favored status make life insurance a powerful financial tool. If you’d like to increase the value you bring to client relationships, and increase your income and the value of your practice then read on to learn a few unexpected ways affluent clients can make use of life insurance.

1. Business strategy: Savvy business owners often seek ways to leverage business assets. Life insurance can be a powerful asset to a business, particularly when a large sum of capital is needed in the future. Consider this scenario: a small business owner, wants to ensure the business continues to be successful and provide income to heirs. Keeping the management team and other key employees with the company may require financial incentives. A guaranteed life insurance product on the life of the business owner, with the company named as owner and beneficiary will provide a large sum of capital, often tax-free, to fund bonuses for key employees to stay with the firm for a stipulated number of years. A variation on a key-person policy, using life insurance in this way positions the firm to continue.

2. Business succession: When an inheritance plan calls for the family business to be passed to specific children, the business owner may be looking for a way to equalize the inheritance of the children not inheriting the business. A life insurance policy can be used to provide an amount equivalent to the value of the business and without the tax implications of inheriting a business.

3. Tax mitigation: Life insurance can be used to mitigate income tax. Clients with estates of $5.45 million (in 2016) or more may be concerned about the estate tax that will be inherited along with estate assets. A life insurance policy can be purchased for the amount of estimated estate tax. The death benefit has the added advantage of being income-tax free and generally not considered part of the estate when held in trust.

These are only three examples of how the innovative use of life insurance benefits the affluent client. If your expertise is in other insurance arenas, you don’t have to be versed in the products, ownership or beneficiary structures needed to use life insurance. Brokers Central will provide the needed expertise. Your role is to listen for the opportunity and to understand that life insurance is incredibly flexible and versatile. Talk to Brokers Central about the client’s situations and we’ll guide you through the ways life insurance may help.

Brokers Central sweetens the pot with financial rewards and incentives beyond carrier commission. Our VIVA 2016 program rewards your life sales with a 5 or 7 day all-expense paid trip to any location in the United States, even Alaska and Hawaii starting with placed premium of only $135,000. Recommending life insurance solutions to affluent clients increases the value of your expertise and advice, puts more money in your pocket, and rewards you and a guest with a vacation of your choice. Call Brokers Central today, at 845-495-5000, to learn more about how our experience and expertise will help you offer even more value to your clients.

Paul is the Vice President of Sales at Brokers Central, with more than 20 years of financial services experience under his belt, most recently as a Regional Marketing Specialist for Prudential Insurance. View Paul’s bioContact Paul.