Many agents working with seniors are missing the opportunity to show clients how to maximize their legacy to heirs by not asking simple wealth transfer questions; and when it comes to wealth transfer, few solutions work as simply or as well as single-premium life (SPL) insurance. It is estimated that over $40 trillion in accumulated assets will pass to heirs by the year 2052. Tapping into this trillion-dollar market initially can be accomplished by reviewing your existing long term care, Medicare Supplement and annuity clients to identify prospects for wealth transfer planning. Secondly, make sure you ask questions of all your new senior prospects before leaving the appointment. If you do this consistently, you will uncover cross-sale opportunities for single-premium life beneficial to their heirs and to your annual income.
Who Is an SPL Prospect?
- Individuals who are in or near retirement (between the ages of 65 and 85)
- They have identified assets they’ll never need for retirement and earmarked them for heirs
- They are concerned about how income taxes, final expenses and probate could impact their beneficiaries.
A single-premium life policy can be an excellent solution for those interested in passing assets via an income tax-free death benefit to their heirs. Additionally, clients that have set aside some “leave-behind” assets for beneficiaries, but are concerned about not having enough to care for their own potential health care needs, could also find SPL an appropriate answer.
Some single-premium life policies provide accelerated benefits for long-term care expenses. This feature can give policyholders the confidence to set some money aside for loved ones, knowing that they have access if the need arises. Additionally, some single-premium life plans can also offer a return of premium, providing additional peace of mind.
When you’ve finished up an annuity application or just delivered a Medicare Supplement, do not leave before you ask the client, “Do you have any financial assets already set aside for your heirs?”
If they do, those assets are usually liquid and found in CDs, annuities, money market accounts, etc. They are assets that will never be needed during their retirement years so they could consider leveraging these monies by simply moving them into an SPL product. This results in an immediate and significant increase in the value of the asset via the death benefit, plus it’s all now passed income tax-free to heirs. Can you imagine how many thousands of seniors who are unaware of a simple tool that allows their heirs to avoid taxable gains they would ultimately inherit?
The product is easy to explain and clients “get it” right away. There is no exam required and you may be surprised as to just how many in this age group easily qualify medically for the product.
While an annuity may be a good choice for clients still needing to grow assets, don’t pass up a great opportunity to take an interest in your client’s entire situation; ask the right questions, listen to their answers and never make assumptions. You never know who might have $25,000 or $250,000 just waiting to be put toward the right product.