1. insurance they require. One of the benefits of all the
market fluctuation, is clients recognize what they
should have been doing all along. They have
developed a more sincere understanding of their
Whole life on the comeback trail financial planning needs."
Mark Noble / April 07, 2009
Whole life sales seems to be benefiting from the
current market turmoil. It's likely not a coincidence.
Unlike more common term life policies, whole life offers
growth potential on the premiums. In addition to life
coverage, investors get a steady rate of return on their
policy.
With a strong contingent of holdings in high interest,
T his downturn has proven that insurance companies
are not immune to market conditions, but some of
the old standby insurance products — most notably
long-term bonds held over from higher interest periods,
the performance on whole life has been steady — and
whole life — are seeing a resurgence in sales. even more importantly for many clients — guaranteed.
Advisors who offer comprehensive financial plans need Against a backdrop of double-digit losses in the equity
to find ways to generate revenue, and by many markets, whole life policies offer a relatively low-risk
accounts, investments are not fitting the bill right now for rate of return that looks quite good. Windeyer says the
clients. Insurance is a natural alternative use for new whole life policies he's been selling have been
client money. generating returns around 7% to 8%.
Protection products are an easier sell right now because "[Whole life] never went out of style with me, and I've
many clients have had their risk assumptions turned on been in this business for 15 years," he says. "Life
their head. In many cases, clients may be more insurance has specific situations where it is needed. If I
comfortable deploying money into protection rather than have clients with not a lot of RRSP room and a free
equities. cash flow, I will look at monthly premium payments on
life policies. Whole life is great product; in my opinion
"If you're a certified financial planner, it's your obligation the only reason it got a bad name in the past is it was
to cover off three bases. The first is protection — making sold to somebody who should have gotten term life
sure your client has adequate insurance coverage such based on their specific insurance needs."
as disability, life and long term care. Then, there is
managing savings, which is doing things like making
sure you're client is paying down debt. The third step is
investments," says Anthony Windeyer a Richmond, B.C.- Filed by Mark Noble,
based CFP with Coast Capital Insurance Services. mark.noble@advisor.rogers.com
"During the good times, people want to go to step three
before doing one and two."
Originally published on Advisor.ca
Windeyer says one of the key themes he's hearing from
fellow advisors is that there is a silver lining to this
downturn.
"It really seems to be that the more market fluctuations
we see, there is a back to basics movement," Windeyer
says. "It's a good time to make sure clients have all the
Contact your Advanced Case Consultant for additional support on planning with Whole Life