Jeff Reed's Weekly Rant

Summer is almost here, and I am looking for ideas that will make my second half even better than the first. I'll bet you are as well. Here's an idea that can help, and maybe even help add that 13th month of revenue I talked about a few weeks back.

I have run in to a few cases lately in the older ages where we could not issue the face amount the client requested for income replacement purposes. The question is how did we end up there?

Most of us get it - your insurance capacity decreases as you age - but our clients are completely in the dark on this. So much so, in fact, that they are willing to bet they can self insure by the time they retire, not understanding what it means if they do not quite hit the mark.

Consider a male age 45 making $150,000 per year as he ages. Insurance Capacity for income replacement at age:

45 = $2,700,000
55 = $1,950,000
65 = $1,200,000
75 = $0!!!!!

Of course, this is a bit of an over simplification, but the point is clear - if the client is still working late in life, buying enough insurance to replace that income is going to be a problem.

So what do we do as the client's adviser? Make sure they understand the future impact of today's decisions. A great way to do that is with ING's Insurance Capacity Calculator and the resulting Insurability Reserve presentation.

Click Here For The Insurance Capacity Calculator

It introduces the client to the idea that both their insurance policies and their insurability are assets that should be managed just like any other. Frankly, its just good planning. We should be talking to our clients about it before it is a problem, rather than explaining why they can't buy any more insurance. Trust me, that was not a happy call for me to make, and I am sure the agent and client were less than thrilled as well.

I'm willing to bet that this presentation will result in higher face amounts on initial sales as well as additional coverage purchased at annual reviews. It changes the game a bit when the client hears they can't buy more insurance later. Life insurance takes on a greater value in their eyes.

Oh, and one more thing - Try sending a presentation with each policy you deliver. You never know what will happen when a client sees they qualify for more insurance....they might just buy it!

Have a great weekend. I'll rant and rave again next week.