By Ray Ohlson
I had my usual Sunday morning, watching some of the news shows to get an update as to what's going on. Much of the same was in those various reports. I think most people believe that something has to be done in the areas of expenses, deficit spending and revenues. Even though there is a great deal of posturing going on, I believe that America will get its house in order. But sadly, it might be a little too late. There are serious worries for Americans, including their children and grandchildren. Let's take a look at some of the challenges:
First, there is the area of retirement income. Everyone in the market has taken a hit over the last 30 days. Yes, history says the market will return. While I am in agreement, I am not sure when that might be. I am afraid that we may be entering that period known as "the new normal" when it comes to economic growth. So, Americans are going to have to develop their own “Personal Pension Plan” to guarantee that they will have an income they can't outlive to supplement entitlement benefits (Social Security and Medicare), along with their defined benefit plans if available. We can help people "one at a time" by developing these plans. We have the tools, products and expertise to assist our clients with the development of safe money strategies.
What about the areas of long-term care, chronic illnesses and the raw cost of care? This is a problem area that will affect all Americans; it is an area that could cause huge problems in our country's quest for economic recovery. What can we, as advisors, do to hasten the economic recovery for our clients today and into the future?
We have plenty of tools such as long-term care insurance, hybrid products as well as life and annuity products with accelerated benefits should they be needed. These products will allow many Americans to stay in their homes and not be reduced to pauper status or a drag on our country and families. All we need to do is broach the subject and get the conversation going. Remember, if a person is paying out of pocket and running through their finances, there is the area of Medicaid/elder care planning. We are often able to get the client qualified for Medicaid while saving money for a healthy spouse and caregivers. Now with new products there can even be funds "protected" for children as well. And, the same holds true for people eligible for veterans benefits. And, there is a huge network of qualified attorneys with elder care experience to assist you.
What about survivor benefits? How will your married clients get by at the death of a spouse? On top of the normal final expenses and future income need, they must deal with the loss of the smaller social security check. The old concept that they can get along without that check is proving to be very false. Taking “one client at a time,” you can show them how to replace that lost check. Our industry has the tools and the systems. Plus some of the products have 5 percent free withdrawals, return of premium provisions, chronic illness riders and a large death benefit.
Now, let's talk about wealth transfer and legacy planning. Many of your clients have money to be passed down in a less than favorable place. While annuities and bank products are good for accumulation and income, they are not the best place for wealth transfer. What can you do “one client at a time”? Utilize the single premium life products that cure many ills - many are simplified issue. In short, why not turn the $100,000 annuity into a $200,000 death benefit with all the bells and whistles of an annuity?
Legacy planning is another part of wealth transfer. But the difference is that legacy planning handles both dreams and needs. Take for example an individual having a nest egg to pass down to kids for educational needs such as college. There was a recent article in The Indianapolis Star that stated college expenses up in Indiana over 300 percent in the last two decades. How will many attend school? In the past, home equity loans were a great vehicle as “housing prices were sure to rise and my job is secure." Find any flaws in that?
Let me go back to the title of this commentary, "Economic Recovery, One Client At A Time." Think about the incomes we can create. Will that help our economy? Will the money be spent on goods and services? Will it lessen people's dependency on government benefits? And what about leveraging up nest eggs through life insurance and providing tax free death benefits? While the "tax free" nature might not excite politicians, it will excite and please beneficiaries. Those dollars can be spent on higher education, provide a more trained workforce, reduce unemployment and build a better America. So, while we can't go vote in the house or senate chambers, we can help our clients and help America at the same time. How lucky are we to be in a business where we can provide economic recovery "one client at a time"? Let's all get back to work.
Raymond J. Ohlson, CLU, CRC is president and CEO of The Ohlson Group, www.ohlsongroup.com.
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