According to a recent study by Saybrus Brothers, Inc. only about half of adults who have a financial advisor and a plan have ever discussed adding life insurance to the plan.  Of that half who have spoken to their advisors, 15% said that the conversation took place over 10 years ago.  40% said that they had discussed life insurance in the last year.

With the volatility of today’s markets, Kevin Kimbrough, National Sales Manager for Saybrus Brothers , “they are missing an opportunity to fill a critical gap in some existing financial plans while at the same time differentiating themselves and expanding their practices. Additionally, there are benefits to including assets such as life insurance that are not tied to the financial markets and therefore not subject to the same volatility we are currently seeing."

The most fundamental role of life insurance is to protect families/heirs with a death benefit, and 81% of U.S. adults who have a financial advisor and have life insurance said the a primary reason they carried such policies was to protect their family and/or heirs. Only 17% cited wealth transfer as a primary reason they had life insurance and 15% cited the potential for cash accumulation, which is a key feature of many permanent life insurance policies.

"These statistics demonstrate that typical life insurance policyholders may not be aware of the many other uses for life insurance beyond family and heir protection," Kimbrough said. "They may be relying on IRAs or annuities for wealth transfer, which are designed for asset accumulation and retirement income but not for wealth transfer, especially from a tax perspective. Life insurance offers potential for tax-efficient cash accumulation, which can be accessed for a variety of reasons including supplemental retirement income or health care costs, as well as a tax-efficient vehicle to provide for heirs."

Maybe it’s time for the insurance person and the financial advisor to sit next to each other at the next networking event.