Life Insurance Is the Cornerstone of a Sound Financial Plan

For most of us — even those of us involved, in some fashion, with financial services — discussing life insurance ranks right up there with talking about bunion surgery or debating the merits of a high fiber diet.

In other words, it's not that interesting, and there are a ton of things we'd rather be doing instead of wondering how much life insurance we need.

Yet, no product can do more than life insurance to bring your clients and their families peace of mind when it comes to protecting their financial future.

If you help clients with investments and retirement planning, but not with life insurance, you should consider teaming up with an agent or company that serves the advisor market, to ensure that clients are getting the help with life insurance that they need.

What Life Insurance Can Do

Having the right types of life insurance can help protect your clients' income and assets while they are still working and after they've retired.

While some people understand life insurance as a "necessary expense" others overlook the valuable role insurance plays in creating financial security.

Even if a client has a substantial emergency fund, the client should still consider having adequate insurance in place to supplement those funds.

In addition, life insurance can help the client create an instant legacy for the client's loved ones, provide money for final expenses and pay off the client's mortgage and other bills.

Benefits for the Living

Some types of insurance, including specially designed whole life and other permanent insurance products, such as indexed universal life (IUL), provide what are known as "living benefits."

When these policies are designed appropriately, they will give the client fantastic flexibility, use, and control of the client's wealth and help the client create a predictable income stream.

An example of a living benefit is the cash value in a policy that may be used to purchase big-ticket items, such as automobiles, cash-flowing businesses, even homes.

Many Americans continue to subscribe to what is sometimes called BTID, or "buy term and invest the difference." It's a theory that says it's better to buy term insurance instead of costlier permanent insurance like whole life or universal life.

You calculate the money you'll save and then invest that difference in stocks, mutual funds, or other equities.

BTID seems to be a sound enough theory.

However, in reality, only a fraction of people who take a buy-term-and-invest-the-difference approach ever invest the difference.

Cash-value whole life or indexed universal life insurance may be modified to enhance living benefits, and they are increasingly popular cash-management and financing tools.

Properly structured, these kinds of permanent insurance may help your clients to bypass banks and become their own source of financing.

For this reason, buying a permanent life insurance policy could be a sound decision, even for younger people.

Work With a Veteran

If want to help clients with protecting their assets as much as possible and who wants to help clients discover alternative ways to grow their money sensibly, with less risk, you should team up with the many firms that want to offer life insurance support programs for advisors like you.

Life insurance is a tool that the savviest investors leverage in creative ways to protect wealth, purchase cash-flowing assets, and leave legacies for their loved ones.

Brian Swerdlow is the founder and CEO of Anchor Financial Advisors, a retirement planning firm.