Sometimes clients don’t understand the price for success is taxes, which their family would need to pay on the estate after the client dies. Not understanding this and not knowing if they have enough money for retirement can make it difficult for clients to act on your financial advice, explained 15-year MDRT member Brad Brain, CFP, CLU, in his 2018 MDRT Annual Meeting presentation.
Outline options
First, let clients know how their retirement will be funded. Then you can explain options about how clients can pass on assets to heirs. For example, clients can save money to give to their heirs to pay taxes, or they can arrange for the estate to sell assets when they die, said Brain, a Top of the Table member from Fort St. John, British Columbia, Canada. Neither of those options may work for some families if, for example, not enough money is set aside to pay taxes, or the heirs don’t want to sell the assets.
Explain the benefits of life insurance
“Often the best way is to use an insurance strategy,” Brain said. “You can get tax-sheltered growth and a tax-free transfer to the ones you care most about. An insurance strategy is going to be the most predictable and most efficient method to achieve the intended result.
“How life insurance keeps family fortunes” video
“Mathematically, the choice is clear. With insurance, you are paying pennies for dollars,” Brain said.
You can read Brain’s full meeting presentation “Life insurance in retirement.” (MDRT member exclusive, available in 10 languages.) Or watch the presentation:
If you’re looking for more ideas from MDRT members worldwide about how to explain to prospects and clients why insurance and financial planning matters, visit MDRT’s YouTube playlist “Why insurance matters.”
