You’ve probably spoken with clients about using life insurance to protect their loved ones from financial burden, paying for their funerals or leaving a legacy. But have you discussed how it can help them mitigate the risk of longevity in retirement?
Today’s life insurance offers clients greater flexibility than just the traditional death benefit. They can provide solutions to clients’ concerns about outliving retirement and not having enough money.
Accelerated Benefit Riders
Accelerated benefit riders, or living benefit riders, can allow clients to access the death benefit while they’re still living. They can provide an extra financial resource should a client experience a qualifying event such as a covered critical, chronic or terminal illness. An accelerated benefit rider could provide income for a wife whose husband moves into a nursing home, for example. The life insurance company deducts the accelerated benefits payment from the death benefit it ultimately pays the beneficiary.
Universal or whole life policies that have a cash value offer the potential for tax-free income to help retirees fill their income gap if needed.
Consumers Buying Life Insurance for Retirement Income
The benefits of using life insurance for retirement income are not lost on consumers. The Insurance Barometer Study, an annual consumer survey by LIMRA and Life Happens, measures the top five reasons people buy life insurance. In most years, the top five has stayed the same, but in the 2017 survey, a new reason moved into the No. 5 spot — 52% of those surveyed said they bought life insurance to supplement their retirement income. And in 2020, it moved up to the No. 4 spot, with 57% of those surveyed saying they bought it to supplement retirement income.
But because consumers still largely buy life insurance to protect loved ones from financial burden and to leave an inheritance, how do you illustrate how life insurance can be used in retirement for income for themselves?
Contact an SMS marketing consultant on the Life team to answer this question and more. Call us at 1.877.888.0166.