People Want Certainty: Is Insurance Back?

With the recent volatility vin financial markets, there is a sudden rush to return to traditional—perhaps “safe”—investments. And it’s a good time to revisit your estate planning.

Investment portfolios have dropped significantly in 2022, and for many of us, our confidence in the financial markets remains uncertain. We know historically that “markets” have performed and provided us with a stable way to systematically invest, with assurance that over time, our assets will grow.

Hopefully, we are reallocating our investments to reflect our risk tolerance as well as our need for liquidity as we age and consider retirement.

There seems to be a renewed interest in certainty—in products like annuities and insurance, things that can provide guarantees to families and to retirement incomes, especially if the markets do not return to some level of stability. Investors have returned to annuities and T-bills for investment returns—trading volatility for certainty—a strategy that has not been seen since the 2008 financial crisis.

Interest in life insurance has also suddenly skyrocketed, with people understanding that a reduction in their assets means fewer assets for heirs should they die prematurely.

And it makes sense. With the news constantly reporting war, global and weather-related disasters, shootings, random killings, and escalating crime, we all have suddenly come face to face with events that force us to look at our mortality. As Jim Morrison said, “No one here gets out alive.”

When was the last time you actually reviewed and contemplated the economic needs of your family or business if you were to die tomorrow? What plans would you want to have in place if your ability to buy life insurance changed tomorrow?

Most people buy a term policy, “set and forget it.” But maybe a million dollars isn’t what it was years ago. Surely, it doesn’t last as long as it did. In fact, I’d argue that most of us are underinsured—by a lot.

The problem with these term insurance policies is that they are likely to expire long before you do. Often, policies don’t get updated or refinanced, and then, WHAM, you’re too old to requalify.

People who plan are always more successful than those who fail to plan or whose plan is simply “whatever.” What’s your plan?

Martin Levy, CLU/RHU, is the founder of Corporate Strategies, Inc./CorpStrat, located in Woodland Hills, California and a 30-year insurance industry veteran and Lifetime Member of the Million Dollar Round Table. Contact: 818.468.0862 Marty@CorpStrat.com