Life insurance plays essential role in planning Obama isn't a victim of the economic situation

JUL 15, 2012
By  MFXFeeder
Carriers betting on life insurance to replace annuities miss the best part of their story (“Carriers bet on life insurance in place of annuities,” June 18). Planners need to be told the story of how life insurance increases assets under management, assists with meeting client expectations and produces referrals. Saying that planners don't see themselves as life agents and that they miss the instant gratification of a quick sale misdirects the focus on why life insurance does, in fact, play an important role in the planning process. Think about the fact that “death creates debts.” Only life insurance provides money on time, untaxed and untouched by anyone but the beneficiaries. If financial advisers, especially fee-based planners, look at the “cost of dying,” they find that expenses, taxes and any other needs for money come from the most liquid assets. If these assets are part of a fee-based plan, it becomes apparent at a client's death that the assets under management decrease. Premiums are all about leverage. A planner needs to ask: Where will the money come from at the client's death — the accounts they manage, other sources, or can they shift the risk to the insurance company? Why not place the liquidity needs at the door of the insurance company? The insurance “sale” is a process and not a transaction. This means that it does take time, but think about the advantages. Every life application has beneficiaries. Are they the same as on the accounts managed or are they people unknown to the planner? The life insurance fact-finding process creates referrals just by the process. Who receives the money they manage at the client's death is answered as part of the process. The article “Succession planning still an advisory hurdle” in that same issue mentioned a survey of 400 advisory firms by InvestmentNews in which 7% said that they have succession plans. Life insurance is critical to the generational transition of a closely held business in the event of an unexpected death. Life insurance provides liquidity at death and may be designed to provide cash for retirement. The business of planning is all about preservation and distribution of assets to meet client expectations. Life insurance should resonate as a solution for liquidity at death. In the end, the planner needs to know which assets are to be preserved and which ones will be liquidated at death. Al Marano Regional vice president of life brokerage One Resource Group Corp. Roanoke, Ind. I am extremely disappointed in the partisan article “Forces beyond his control imperil Obama” (June 11). This leftist banter should be limited to the opinion section. The article suggests that the economy is beyond President Barack Obama's control and that he is just a victim in this whole process. There is no mention of his first two years when he had both the House and Senate in the majority. I didn't think that InvestmentNews was like the rest of the left-leaning mainstream media. I am hoping this is just a blip on the screen and that you will try to be fair and unbiased. John J. Manuel Principal and senior portfolio -manager Castle Wealth Management West Palm Beach, Fla.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave