Ask anyone over 25 years old what one of their major money concerns are, and they’ll likely base their answer on retirement, remaining financially sound and keeping their independence.

Whose retirement plans truly include depending on someone else to maintain a standard of living? The answer is an overwhelming “no one.”

We want to retire and live care-free. And we want to do so in our own homes, with our own money that we’ve worked hard to obtain for the last 40-50 years. We work for over half our lives so that we can accumulate enough funds to find peace at the end of the road, do the things we’ve always wanted, and not have to worry about money ever again.

Unfortunately, many fail to achieve the storybook ending they’ve always dreamed of, and it’s because they didn’t plan properly for financial independence. It’s fantastic that people are living longer. But because the retirement age remains the same, the need for more funds increased too.

Luckily, we have a few retirement options and strategies that can help you teach clients how to better their long-term financial plans. Cash value products provide clients with an approach aimed at cash accumulation (which is what you as an agent want to do for your clients, right?). These types of policies allow a policyholder to utilize the cash for supplemental retirement income.

When dealing with the building of cash value and tax-free distributions, four products are often used. They include:

  • Current Assumption Universal Life — Pays a sub account a fixed interest rate based on the performance of the insurance carrier’s general account.
  • Index Universal Life — Pays a rate of return based on the options contract that is purchased for a specific index (ex: S&P 500)
  • Variable Universal Life — Pays a rate of return based on the performance of the sub-account’s performance, similar to a 401k or Mutual Funds.
  • Whole Life — Pays a rate of return  in the form of a dividend based on the performance and profitability of the insurance company, similar to being a stockholder.

Then there are index products, which similarly act as retirement supplement. These policies can yield a greater potential for return than some fixed products.

When it comes to long-term insurance, the sooner an individual takes advantage of these policies, the better. After all, what will have more value: a policy that builds for 20 years, or one that builds for 40?

So where do you as the agent start?

After learning more about cash value and index products, let your clients know that you can help them craft better plans for their retirement. Start with one simple question: Do you want to ensure that you won’t have to lean on someone else for financial security? Once you receive your answer, the only question left is, would you like to start right now for optimal growth?

Two simple questions, two hopefully obvious answers.

Help your clients plan for financial independence by learning more about cash value and index products. For more information, call us at 1-800-823-4852 or email your Brokerage Director.