The Retirement Gap

The Retirement Gap

As much time as we focus on product in this forum, it seems appropriate to turn our attention to other variables in the calculus that is working with insurance clients.  This year, case sizes are smaller, along with the premiums and, unfortunately, most producers’ incomes.  Clients are facing a similar struggle, in that their incomes are smaller, and they have to make their dollars go farther.

The cause?  Certainly, there are more than one.  Today, however, we focus on one: the fact that the public is starting to understand just how challenging retirement is going to be, and their subsequent struggle solving that particular riddle.  What riddle? If a picture is worth a thousand words, perhaps a good infographic like this one from Lincoln Financial is worth a million?  Not enough information for you?  How about this piece from ING?  They both tell an important story.

The message is clear: our clients are not saving enough, and they are starting to believe that the safety nets that have been in place, such as pensions, employer sponsored plans and social security, are not going to fill the gap.  Layer on top the increased tax rates and the possibility of higher rates in the future, and the stage is set for the one industry that can really step in and help them bridge the gap: the insurance industry.

The challenge is how to help clients understand the problem in the most real terms: their own.  Specifically, just how big a gap are they facing?  Make it personal, and it becomes all the more real.  Maybe real enough to motivate them to take action. Taking it from the theoretical and fact based argument represented by the materials from Lincoln and ING above and placing it squarely in your client’s living room is the next step.

How, exactly, to go about that?  There are a number of ways, and they range from the most simple cocktail napkin calculation to a full fledged financial plan. The best way? The one that actually gets the client off their backside and inspires them to take action. Here’s an example: the Retirement Path Roadmap from Aviva.  Or perhaps the Retirement Extra from ING?  The methodology is startlingly simple: quantify the problem with a simple presentation, and suggest a solution for solving the problem.  A portion of that solution, for a host of reasons, could, or maybe even should, be a life insurance policy.

Why?  Simple, really.  Control.  Tax deferral.  Tax free income.  Lifetime income.  Self completion via death benefits.  Clients need the protection aspect more than ever because of the very gap we are talking about, and they demand that their dollars work harder than ever.  No longer is it enough to fund something that only solves one aspect of the problem.  Our industry and products offer the exact things that are being taken away from our clients in other parts of their financial lives.

What it takes is a new vocabulary, or for some, simply dusting off one that they have not used in quite some time.  The bottom line is that making that transition back to selling cash value products is challenging, and it takes some re-training.  If your goal is to have your insurance practice return to the levels of success you have enjoyed over the last decade selling based on low guaranteed prices, it is probably time for us to have a conversation.  Give us a call at (888) 540-1212 or email us today.

Getting Back To Even Life Expectancies: The New Normal In Life Case Design