An interview with Lisa Todd, Head of Life and Disability Insurance Distribution, MassMutual Strategic Distributors.
With the stock market so volatile and inflation at a 40-year high, many clients are uneasy and uncertain. What should advisors do now to address investor anxiety?
A good advisor is a good listener. If you are listening carefully, you’ll hear clients saying — or at least suggesting — that they now are just as interested in protecting their portfolio and their retirement income as they are in seeing their investments grow. Helping clients by providing the protection they are seeking can go a long way to easing their anxiety.
How can advisors help clients protect their savings and investments during these anxious times?
If they don’t already do so, advisors can utilize a holistic approach to planning by integrating insurance with other financial assets. Insurance, and particularly whole life insurance, may not be the first asset that advisors think of as an alternative category, but whole life insurance is totally uncorrelated to equities and provides stability and peace of mind because its cash values do not fluctuate with the equity market
s. Whole life offers the protection that so many investors are now looking for.
How can a whole life policy’s cash value be helpful?
In addition to the life insurance protection a whole life policy provides a family during the working years, its cash value can be used in a variety of helpful ways. At retirement, a whole life policy’s cash value can provide supplemental tax-advantaged income during market dips giving the portfolio time to recover. For business owners, cash value can provide access to liquidity that otherwise might be difficult or expensive to come by. In these ways, whole life keeps investments in place to ride out a downturn and provides clients with more choice.
Insurance may not be an advisor’s sweet spot. How should they approach discussing the ways insurance can complement investments?
Many resources are available to help. Firms of all types have insurance experts ready to provide guidance and information. Wholesalers, including those from MassMutual Strategic Distributors, can illustrate how whole life can be optimally designed as a solution to address a client’s specific needs. We also have online tools, including our Simplify software, that effectively illustrate how insurance manages a spectrum of risks across one’s lifetime and addresses situational challenges, such as the impact of accessing cash value. It is a tool that can make insurance more understandable to the client and helps to underscore the value of an advisor’s service. The insurance specialist manages the insurance element every step of the way and supports the advisor in the way the advisor prefers.
What are some of the features of whole life insurance that advisors often overlook?
One is that whole life locks in a client’s insurability. Whatever happens, someone covered by a whole life policy remains insured no matter what happens to the client’s health after the policy is secured. Second, whole life can offer a variety of options that may meet a particular client’s needs. For example, a whole life policy that includes a long-term care rider can offer a benefit — and a sense of security — that a client may have wanted but never thought was affordable. Finally, a whole life policy whose beneficiaries are family members provides an unparalleled opportunity for advisors to build relationships with a younger generation, who are likely to view the life insurance coverage favorably, and may welcome an advisor’s assistance in the future.
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Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MAO 1111) and its subsidiaries, C.M. Life Insurance Co. and MML Bay State Life Insurance Co. (Enfield, CT 06082).
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