Give your high-net-worth clients better insurance advice

March 5, 2018 by Alex Noonan

An advisor uncovers insurance needs with his client.

about the author:

Alex Noonan

Technical writer

Joining Advicent as a partner support specialist in 2013, Alex provided high-quality support for partners within NaviPlan and Profiles. In 2015, he took that product knowledge to the learning development team as a technical writer, creating detailed documentation for partners with a practical focus on what they need to know. Alex received a BSBA from Drake University in Marketing/Advertising Creative in 2013.

In many conversations centered on insurance, clients will often be looking to solve issues such as keeping their loved ones financially secure or providing a safety net for expenses in the event of injury or illness. For high-net-worth (HNW) individuals, however, insurance needs may vary widely for each client.

HNW clients could potentially use insurance in less conventional ways, like retaining asset values or reducing estate taxation needs. These individuals may not be aware of such benefits, which can offer a unique opportunity for the inclusion of insurance policies in their financial plans which advisors can easily generate using NaviPlan®.

Leveraging scalable insurance planning

A level 2 plan in NaviPlan offers several insurance options based on the complexity of the client's specific scenario. Survivorship insurance offers analysis in the form of quick assessment, goal and expense, and income coverage. Disability insurance, however, offers goal and expense analysis and income coverage analysis.

Quick assessment

The quick assessment option is as simple as it sounds a quick snapshot of a survivor insurance need that can calculate any insurance requirements based on assets, incomes, and expenses. This mode is ideal for lower income clients, as its main purpose is to pinpoint shortfalls and improve them with the appropriate insurance policy.

Goal and expense

This functionality is a more complex offering that allows you to factor in multiple goals and expenses to calculate any insurance need in conjunction with asset withdrawal. This analysis mode allows for control over which assets can be used in the insurance scenario, the ability to adjust goal needs, and if there are any unique assumptions or incomes that may be added to the scenario for calculation.

Income coverage

Much like goal and expense, this is a complex mode that focuses on meeting income needs in the event of an insurance scenario. Much like goal and expense, you can factor in unique assumptions and adjust available assets; in this mode, however, you can have additional control over incomes compared to goal and expense.

For most HNW clients, the last two methods will be most appropriate. The method you end up using will vary depending on your client’s unique situation and your own personal approach to uncovering potential insurance needs.

Demonstrating your value

Insurance reporting provides clients insight into how much they might want to purchase in order to cover insurance needs. Reporting can be simple, such as showing a basic overview of where needs are coming from and a bottom line number, or as complex as a comprehensive breakdown of how insurance needs might change based on adjusted variables.

Insurance functionality within NaviPlan can provide clients with the information they need to know how insurance might save them from a potential financial disaster. It can also be used to secure HNW clients’ assets from taxation or unnecessary spending.

To learn how Advicent technology can empower advisors to better serve HNW clients, click here.