Financial Advisors - When Markets Are in Turmoil, New Evaluations are Vital
5 months ago

Financial Advisors - When Markets Are in Turmoil, New Evaluations are Vital

Dealing with stock market turmoil is often unsettling, especially if your clients plan for retirement. However, life insurance coverage can play a crucial role for anyone planning to retire. Periodically reviewing the life insurance policies of your clients can help you determine if everything is on track or if you need to adjust their policy. You will also need to review their policy due to various life events to ensure your clients will reach their long-term financial goals, even amid stock market volatility.

Here are a few reasons why financial advisors need to review the life insurance coverage of clients planning for retirement.

Family Status Changes

Getting recently married or the birth of a child are a few of the most common changes in family status. However, changes in family status can happen in other ways, such as being responsible for an elderly parent or relative. You will also need to reevaluate the life insurance coverage of clients that are just finished getting a divorce. Losing a spouse can also impact the need for life insurance, which is why it's always good to reach out to clients to discuss these changes.

Career Change

A career change can also make an impact on long-term financial goals. For example, a client may need additional coverage if they add another partner to their company to maintain business continuity during an emergency or death. Increasing their life insurance coverage is also essential if their income is much higher now than when they initially purchased life insurance. Keeping all of these things in mind is critical in finding the right amount of coverage for your clients.

Nearing Retirement

Not everyone realizes that life insurance can make a significant impact on retirement. A client that purchases guaranteed cash-value policies during their younger years is a great way to provide security for their entire family during retirement. Over time, these guaranteed cash values can turn into fully matured insurance policies while earning interest to help provide significant assets for reinvesting to fund retirement. Discussing the cash value of a life insurance policy with each client can help you determine the best choice to make amid stock market volatility.

Life Insurance Policy Appraisal

Getting a life insurance policy appraisal is important if your client is nearing retirement. A professional appraisal will help you and your client understand the value of your policy, as you will find out the cash value of a life insurance policy. You may find that a life settlement is beneficial to your client by helping them to avoid rising monthly premiums while also providing additional financial freedom.

Dealing With Stock Market Volatility

The stock market usually increases over time, but it also deals with numerous bear markets and unexpected market turmoil. Dealing with stock market volatility can be a challenge for many clients, especially if they are experiencing significant losses. Knowing how to communicate with your clients while helping them make the best financial decisions to reach their long-term financial goals is essential during long periods of market turmoil.

Here is an overview of tips on talking to your clients while experiencing stock market volatility.

Take Time to Listen

One of the first steps in helping clients plan for retirement is to be a good listener. Reaching out to your clients and listening to their concerns is vital during uncertain times in the stock market. You can often learn much more about your client by taking the time to listen to them.

Focus on the Long-Term

Another critical aspect of planning for retirement is to take the long-term view instead of solely focusing on the short term. Avoiding the temptation to sell during a bull market is essential to riding out market turmoil. Reminding clients about the importance of the long-term view can often make it much easier to deal with uncertainty in the stock market.

Review Their Plan

Periods of stock market volatility are a great time to reevaluate your plans with clients. These meetings allow you to check on the status of their portfolio to determine if you need to make any changes. Sometimes the best choice is to get rid of volatile assets, or it may be better to hold on for the long term while planning for retirement.

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