Old Insurance vs. New Insurance: Are Your Clients Missing Out?

As a financial advisor, you understand the value life insurance brings to a well-rounded financial plan. But are your clients still relying on “old insurance” that only provides a death benefit? If so, they may be missing out on the enhanced features offered by today’s “new insurance” products, which provide benefits clients can use during their lifetime.

The Evolution from "Old Insurance" to "New Insurance"

Traditional life insurance, or “old insurance,” was designed primarily to pay out after the policyholder's death. While the death benefit remains a cornerstone of life insurance, modern policies—what we call “new insurance”—offer innovative living benefits that can serve clients during their lifetime.

Living Benefit Riders are game-changers. They include:

• Chronic Illness and Critical Illness Riders: Provide access to policy funds if the client faces a severe health condition, such as cancer or a stroke.
• Long-Term Care Riders: Help cover the cost of extended care, a growing concern as healthcare expenses rise.

These riders are no longer optional luxuries—they’re critical features that align life insurance with today’s financial realities.

Why Policy Reviews Are a Must

Clients’ needs change, and so does the insurance market. Regular policy reviews can:

1. Uncover Gaps in Coverage: Ensure the coverage amount reflects the client’s current needs, such as increased income, dependents, or debts.
2. Identify Opportunities for Upgrades: Transition clients from “old insurance” to policies that offer living benefits, improving their financial flexibility.

For example, research shows that 70% of Americans over age 65 will need some form of long-term care during their lifetime. Policies with living benefits ensure clients won’t need to dip into retirement savings to cover those expenses.

Beyond Protection: Wealth Accumulation with Modern Insurance

Today’s insurance products are more than safety nets—they’re powerful tools for wealth accumulation:

• Indexed Universal Life (IUL): Offers tax-favored growth potential and tax-free income. This can be an alternative to a Roth IRA for clients who exceed contribution or income limits.
• Cash Value Life Insurance: Provides younger clients with a diversified savings option, supplementing retirement income while delivering financial security.

The Cost of Inaction

Most clients are unaware of the advances in life insurance. Many would consider upgrading if they knew about these benefits. Don’t let another advisor start this conversation with your clients first.

Take Action: Tools to Help You Engage Clients

We offer turnkey policy review materials and personalized support to help you:

• Start conversations about existing policies.
• Highlight the benefits of upgrading to modern products.
• Ensure your clients have the most appropriate coverage for their evolving needs.

With today’s “new insurance,” life insurance is no longer just about what happens when a client dies—it’s about how they can thrive while they live. Help your clients get the most out of their policies. Start the conversation today.