What Can Insurance Agents Do During Stock Market Declines?

1. What's happening, and why?

Your firm's research analysts or trusted firm partners likely have provided works of analysis that you can share with clients. Get in touch. Sound the clients out about their concerns and share the information the analysts have provided.

2. What the Client Owns

Years ago, I had a client who called and said: "I'm very concerned about what's going on in the stock market." I tactfully replied: "I don't understand why. You don't own any stock." His portfolio was in bonds and other fixed-income investments. The lesson: Some of your clients might not understand what they own. Time for a refresher.

3. Products and Features That Protect Against Downturns

Where do principal guarantees fit into the picture? The value in the client's fixed annuity grows at a certain rate. Does a client own a policy where the client participates in the performance of the stock market to a certain extent, yet also has principal protection? Explain how the principal protection feature works.

4. Guarantees

This is a "hot potato" word, popular in the industry. In the world of insurance, the guarantee comes from the company, not the federal government. Since this is the case, clients with guarantees will want to know whether the issuers providing the guarantees are financially secure and stable. That's one of the things rating agencies rate. Tell clients about the ratings. That should put their mind at ease.

5. Variable Annuities

If you have sold these, there's likely a tradeoff between the potential for capital appreciation from stock market investments at the expense of a principal guarantee. The clients will want to know how they are doing. Let them know. If their money has been working for a long time, remind them where they started. Stress the long-term nature of the investment.

6. Next Steps

You are concerned about a client's spouse. Would a couple like these explanations repeated, with both spouses on the phone?

You are concerned about the couple's outside investments. Have they heard from their financial advisor?

If you handle investments and wealth management, you mention that investments and wealth management are another part of your practice. You have experience and knowledge here, too. You have planted a seed in your clients' minds.

In life we assign a high value to friends who are there when we need them. This is often during times of emotional stress. Friends remember who stepped up and who stood back. Clients do, too.

— Read How to Order Wine Like a Boss (Without Paying Like One), on ThinkAdvisor.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides high-net-worth client acquisition training for the financial services industry. His book, "Captivating the Wealthy Investor," can be found on Amazon.