How to underwrite your future

Like many MDRT members, you may have spent decades creating plans that protect your clients’ businesses and financial security when they’re no longer working full time. Yet when it comes to ensuring you and your family’s finances and future, especially when it’s about your retirement and transitioning your business, you struggle with it — if not outright procrastinate.

I understand. I’ve been retired since 2017. I was a 19-year MDRT member and a Top of the Table qualifier. My father, Robert P. Heestand, was an 11-year MDRT member. I’ve experienced four successions with a family-owned employee benefits business in Portland, Oregon, all internal with employees of the business. I’ve learned a tremendous amount from this, including that we all need to take a look at succession, or business continuity, planning. As the late MDRT great Ben Feldman often said at Annual Meetings, “Let’s underwrite a bit of the future.” And that’s what business continuity planning is.

Buying out the boss

Lawyers, accountants or mergers and acquisitions experts don’t necessarily understand components to success in our business. What’s great for us is that we can underwrite the future and build our route to success with what’s familiar for us — life insurance and a key employee.

To “underwrite a bit of the future” requires education, though. You, as the life insurance pro, are the only part of the planning team who consistently preaches this. The lawyer is mostly oriented to keeping out of or resolving legal troubles. The accountant is mostly focused on this year’s financials for tax and other angles. The mergers and acquisitions expert is looking for a deal that’s going to go in the next 24 months. 

Thinking long term

You, on the other hand, are looking at the long term. You never sell a life insurance policy or other product with the view that you’re going to see it used in the next year or two. You sincerely hope it never comes to that. Yet, you know that ultimately every valid in-force life insurance policy at the date of death results in a paid claim. You are the professional ideally situated to carry this message to the process of succession planning. 

If you want retirement security, look inward. There is often that one special employee who shows promise. This person can be your retirement security. That key employee is often a great option for your business continuity planning.

This is a different message than every other retirement prospect you talk to. Typically, the business owner invests nearly everything into the business and the other assets are side investments. This is a reality that you can use to your advantage, once you understand it.

In future MDRT Blog posts, I’ll discuss more about how you can successfully transition a business.

William J. Heestand, CLU, of Austin, Texas, has been busy in his retirement. He recently wrote a book, “The Ownership Ladder,” to share the mindset and life expertise to help potential intrapreneurs achieve the life they dream about while their owner boss gets what they want. Connect with him on LinkedIn to learn how employees can buy out the boss in a win-win deal for both. Read his story of taking over the family business in “Taking over your family business isn’t always easy.” 

Learn more about building the future you want through succession planning

• Read the “Business continuity decision tree”
• Watch “7 key things you should know when buying a financial services practice”
• Watch “Planning for success before you’re out of options”