5 Year-End Financial Oversights That Could Lead to Life or Annuity Opportunities

As the year comes to a close, clients often overlook key financial tasks that could significantly impact their long-term security. Identifying these gaps is an excellent way for advisors to provide value while uncovering opportunities to discuss life insurance or annuities. Here are five common year-end oversights—and how addressing them can lead to a sale.

1. Reviewing Beneficiary Designations

Life changes such as marriage, divorce, or the birth of a child often occur throughout the year, but clients frequently forget to update their beneficiary designations.

• Opportunity: Offer a year-end beneficiary review to ensure policies align with clients’ current wishes. This can uncover gaps where a new life insurance policy might be necessary to provide additional protection or estate liquidity.

💡 Tip: Highlight how updated designations can help avoid probate delays and ensure their legacy is preserved.

2. Maximizing Retirement Contributions

Clients may not realize they haven’t maxed out their 401(k) or IRA contributions, or they may have additional funds to allocate.

• Opportunity: Introduce fixed or fixed-indexed annuities as an option for tax-deferred growth, especially if they’ve already maxed out traditional retirement accounts.

💡 Tip: Position annuities as a solution for clients seeking a guaranteed income stream or protection against market volatility.

3. Addressing Underinsured Needs

Clients often neglect to assess whether their current life insurance coverage is sufficient to meet their evolving needs.

• Opportunity: Offer a quick insurance gap analysis. If their coverage doesn’t account for new debt, higher living expenses, or future goals like college funding, suggest a policy upgrade or additional coverage.

💡 Tip: Explain how permanent life insurance policies can double as a savings tool through cash value accumulation.

4. Planning for Taxes on Required Minimum Distributions (RMDs)

For clients aged 73 or older, year-end RMDs from traditional retirement accounts can trigger tax burdens.

• Opportunity: Discuss using excess RMDs to fund a life insurance policy or annuity, particularly for wealth transfer strategies or creating tax-efficient income.

💡 Tip: Share how life insurance can offset estate taxes or provide a legacy for heirs, while annuities can offer guaranteed income.

5. Overlooking Long-Term Care (LTC) Planning

Clients often underestimate the importance of preparing for long-term care expenses, leaving their retirement savings vulnerable.

• Opportunity: Discuss hybrid life insurance policies with LTC riders or annuities with LTC benefits as a way to address this potential risk.

💡 Tip: Position these products as a proactive way to protect both their savings and their family’s financial security.

How to Start the Conversation

Year-end is the perfect time to offer reviews and planning services. Consider using these prompts to identify opportunities:

• “When was the last time you reviewed your beneficiary designations?”
• “Have you maxed out your retirement contributions for this year?”
• “Do you feel confident in your long-term care plan?”

By helping clients tackle these often-overlooked areas, you not only add value to their financial plans but also open the door to meaningful conversations about life insurance and annuities.

Ready to help your clients end the year financially prepared? Let’s make it happen!