Market Adjustments – Protecting the Downside

Protect the downside and lock in their health
These turbulent times are causing many to rethink their retirement plan.  Some have realized they may need to work longer or part-time during retirement.  I continue to be introduced to more seniors in need of replacing their term insurance policies that are expiring or becoming prohibitively expensive. With less assets and higher expenses, it may be time to increase their life insurance safety net.  Adding some additional coverage now can add flexibility and better protect their spouse from running out of money in retirement.
Client Ages 50-60
For those in the home stretch of retirement perhaps they consider adding quality term insurance? This will increase their coverage and protect them from the loss of existing group coverage if they change employment or when they retire. Most clients realize if they die early in retirement their surviving spouse loses social security income.  For some, their pension income might be lost or reduced which could expose them to a lower lifestyle for their remaining years and drastically change their retirement experience.  A quality term policy adds flexibility allowing a client to extend coverage in the future if they need it longer than initially anticipated.  Some may extend it for only a few more years and others may desire to have the coverage in force until they die.  
Quality Term Pricing
Client Ages 60-70
Clients may not be ready to have the long-term care conversation but with less assets and more risk of having a smooth retirement due to economic and market forces, a long-term care event can be even more devastating.  More clients are falling down the social ladder and they may want to rethink having long-term care insurance in place. 
There are a few unique products available in the marketplace.  A second-to-die life insurance policy insures both spouses and allows the client to access the death benefit if they need care and qualify.  One of the products provides a lifetime long-term care benefit for those wishing to protect against an extensive care situation.  The other provides care benefits for the surviving spouse or if both individuals need care at the same time.  The remaining death benefit is paid to their heirs offering an attractive IRR. 
Lifetime Benefit Option
Surviving Spouse – Dual Claim Option
Clients Age 70+
Rising interest rates are exciting for those looking for better safe returns.  The problem with bonds in a rising interest rate environment is potential deterioration in value.  Fixed and indexed annuities can protect the principal and provide a better return than available in similar risk products. 
If your client needs a fixed or indexed annuity, make sure you shop the market.  There are false assumptions that a product is better if it doesn’t pay a commission.  This can certainly be true at times, but often with today’s limited availability of commission-free products, the commission products may still be better.  Remember commissions are just one cost in the product distribution chain. 
A recently published NAPFA article, “Choosing the right income annuity for your client”, provides insight when comparing the different products.

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