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:
Recently, while cleaning out some old boxes in my home office, I came across my old CD collection. Yes, that’s what I said; CDs. Those thin, circular, hard plastic-type objects that helped usher in the digital era. Prehistoric to today’s youth, these amazing discs were actually the predecessor’s to perhaps a more influential movement; the mix tape.
If you are either too young, or too old to know about this 90s phenomena the “mix tape”, I feel sorry for you. It was a convenient and clever way to tell someone how you felt. A way to express feelings and emotions or to celebrate certain events or parties with a custom and deliberate collection of songs. I still remember certain mix tapes or CDs that got me through some tough times in my life, like the breakup of my first girlfriend, or loss of the family pet; as well as some pretty exciting times like college house parties or fraternity trips.
What made mix tapes/CDs so great was that they were a collection of diverse songs, but that had a similar or common message or theme. And yes in today’s age of music programs and downloads you can have a software pick similar songs for you, but there was something special and unique and even fulfilling about listening to this specific CD that you created yourself. When I found my old collection of CDs, which easily totaled 200+, the first thing I did was look through my whole collection and go straight to my mixes and reminisce about the good, or bad, times that each one of them represented. As I did so, couldn’t help but think that we could use a bit more mix tapes or CDs today. Not only in our personal lives, but in our professions as well.
In today’s hectic and fast-paced world efficiencies and streamlined processes have become commonplace. However, are these same systems as efficient and effective for the client? In some cases they may be, but I think often times those systems cause a slight inconvenience or at the very least a decline in personal touches for your clients. So I believe we should all bring back that mix tape mentality. If you have 50 clients that want to retire in the next 5 years, could you find one product that adequately meets all of their needs? Yes, it’s possible. But don’t be just like your competitor and grab one proverbial “CD or Cassette” off the shelf and give them all the same one. Take the time to add a personal touch and meet their needs to the best of your ability. Show them not only that you have the knowledge, but that you care enough to put together a well thought-out plan to meet all of their needs. By doing this you not only are doing what is truly best for you clients, but are also differentiating yourself from your competitors. I’m convinced that if you do that, your business will grow. Efficiencies are a necessary part of your business, but you separate yourself from others by taking the extra step and adding those personal touches.
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.