In A World Full Of Volatility, Give Your Client Certainty

Volatility is the word of the day. For so many years, economic news has followed a predictable trend—the markets are up, inflation is low, prices are stable, etc. There was comfort in that predictability. Sure, there were the occasional spikes in gas prices and rough days in the market, but our 401(k) statements generally looked good and we didn’t gasp when we went to the gas station to fill up. Those trouble-free days seem far away now. Since the beginning of the year, markets have sputtered, with occasional upward ticks more than offset by weeks in the red. Inflation is at 40-year highs and prices on everything from gas to plywood to milk seem to be on a persistent march upward. And our 401(k) statements? Well, we might be tempted to not look for a while.

This is not intended to be one of those “the end is near” manifestos. Things are rough right now, but things have been rough before. Volatility is nothing new. It just took a break for a while. What might seem new are the feelings that it engenders: Uncertainty, unease, fear. It has been a while since our clients experienced these feelings, so it is incumbent on us to help them navigate those feelings and offer potential solutions that can help mitigate their fears. This is the time for us to shine!

So how do we counter a world full of volatility? With some certainty. Even better, with some guarantees. With many aspects of our clients’ financial lives seeming out of their control, you can provide them with at least one thing that they’ll never have to worry about—a participating whole life policy. Whole life insurance provides certainty in premiums, certainty in cash values, certainty in death benefits and certainty in performance. Consider the following…

Certainty in premium. Whole life premiums are guaranteed. Your client can take comfort in knowing that the company cannot increase their premium or the cost of their coverage. Additionally, whole life policies come with non-forfeiture options that keep the policy inforce if your client cannot pay their premium. This is especially valuable for the client whose disposable income is being squeezed in ways that it hasn’t been before. And it is not a one-size-fits-all solution—most policies offer a number of options to meet different client needs:

  • Premiums can be paid from policy cash values.
  • Automatic premium loan—As the name suggests, a loan against the policy cash values is taken to pay the premium.
  • Extended term insurance—The policy cash value is used to purchase term insurance for the death benefit amount.
  • Reduced paid up—The policy cash value is used as a single premium to purchase a paid up policy.

Certainty in cash values. Whole life policies not only provide guaranteed cash values that the client can access at any time for any reason, they also provide guaranteed cash value growth every year. The schedule of guaranteed cash values and guaranteed cash value growth is written into the policy and is not subject to interest rate changes or the performance of a market index. If your client pays the premium, the guaranteed cash value grows every year. Zero is not your hero when you can have guaranteed growth!

Certainty in death benefits. Whole life death benefits are guaranteed. As long as your client pays the premium, the death benefit is guaranteed to stay in force regardless of changes in interest rates or the performance of a market index.

Certainty in performance. With premiums, cash values and death benefits all guaranteed, your client knows exactly what they will have today, tomorrow and every day. In fact, the only way your client’s policy can change is if the company pays a dividend, and then it changes for the better! If your client elects to have dividends purchase paid up additions, which many clients do, the result is an increase in the guaranteed cash value and the guaranteed death benefit. Those increases are guaranteed for life!

The guarantees in whole life provide your clients with certainty. They know their coverage will be there. They know what it will cost. They know what their cash value will be and they know that they can access it. Whole life can be a valuable part of any financial plan because of the certainty that it provides regardless of the volatility they might be experiencing in the rest of their financial world. Remember, life is uncertain, but whole life is guaranteed.

Luke Cosme is senior vice president, chief sales and marketing officer at Mutual Trust Insurance Company, A Pan-American Life Insurance Group Stock Company, where he manages the company's distribution and sales development and support efforts. Cosme joined Mutual Trust in February 2014 after serving for a decade as sales vice president at North American Company for Life and Health, where he was responsible for the recruitment and development of MGA relationships, sales strategies and case placement.

Cosme started his career at North American in 1997 after graduating from the University of Illinois at Urbana-Champaign, where he majored in economics. At North American, he held positions as sales director, financial institutions, and worked in client services before being promoted to sales vice president in 2004.

Cosme can be reached at Mutual Trust Insurance Company, 1200 Jorie Boulevard, Oak Brook, IL 60523. Telephone: 800-323-7320, ext. 5300. Email: cosmel@mutualtrust.com.