Life insurers see their cash-value life insurance policies as powerful Swiss Army knives that can help clients do everything from saving for college bills to supplementing retirement income.
But the insurance agents, securities sales representatives and financial advisors who help people buy life insurance tend to spend a lot more time talking about the death benefits.
Ernst & Young and LIMRA have published data supporting that conclusion in a summary of results from a survey of about 900 financial professionals who had at least three years of financial services sales experience.
About 89% of the financial professionals who participated said they emphasize death benefits and death benefit options during life insurance discussions. Only 51% said they often talk about cash-value withdrawals.
What It Means
Life insurers are having a hard time telling your clients that cash-value life insurance policies can help with retirement planning efforts and other life planning efforts, not just with protecting families against the risk of a parent's premature death.
Cash-Value Life
Term life policies protect an insured's beneficiaries against the death of the insured for a set price for a specified term. The policyholder may be able to extend the coverage for a higher price or convert the coverage to cash-value coverage.
Term life policies and their riders are designed to pay benefits when the insured dies or experiences specified triggering conditions, such as a terminal illness.
Typical cash-value policies are designed to stay in force until an age ranging from 90 to 121.
