I recently watched part of a television segment by a well-known personal finance expert discussing student loans. One thing in particular caught my attention:
American’s owe $1 trillion in student loan debt - $200 million more than what is owed in credit card debt.
I’ll wait here while you read that again.
As I listened to the program, my mind quickly turned and I thought of how many family and friends may be included in that statistic now - and may be again, in years to come when their children are college bound.
Unlike most debts, current federal law states that student loans cannot be dissolved or written off via bankruptcy and, if in default, are subject to garnishment and income tax seizure. A quick Google search presented an average student loan debt of $29,400 for the class of 2012 according to CNN Money.
This situation, along with several others is precisely the reason that we all as agents, advisors and consultants should participate in a full fact finding crusade. I feel we, as an industry, have a responsibility to our clients to not only insure, but also ensure their future. Financial insolvency can be a burden not only for your clients, but also for their heirs.
Annual policy reviews can bring issues such as college funding into focus.
· Life events like marriage, birth of a child or grandchild, career change or the purchase of a home can cause a person to need to adjust their priorities.
· Clients with annuities may be in a situation of having to take RMDs and not really needing the income. A strategy of leveraging those monies into a life insurance policy with tax-free death benefits may be a solid option.
· Many clients express the need for long-term care benefits but don’t want to purchase stand alone LTCi in case they never use it. By combining long-term care benefits with annuity or life products, you can offer your clients another option.
Do you have a committed policy review program in place? If so, great! If not, you should.