The Need for Needs-Based Planning

Over the last decade, insurance solutions have evolved, not only in product development but also in the lens from which we view insurance. In its most basic form, insurance addresses your client’s financial risk and works to develop a secure and unhindered path forward.

However, before insurance can do its job, it is your job to sit down with your client and ask some important questions – a needs-based assessment will help you determine what your client would face in the event of illness, disability or even premature death. This assessment or “analysis” will also help to establish your client’s estate goals and allow you, as their trusted advisor, to find better solutions based on your client’s unique set of circumstances.

There is just no getting around it. If you want your client to have the right insurance – insurance that will protect them and their family in the best and the worst of times – you will need to dig deep to really know your client…perhaps starting with these questions:

  • What are your family dynamics and account details? (including assets and liabilities)
  • What percentage of income does your family require to maintain your lifestyle?
  • Does this picture change when your children are no longer dependents?
  • Can you describe your ideal retirement?
  • What would happen to the family income if you were disabled or had a critical illness?
  • Do you have group benefits through work?
  • What do you want to see happen with your estate upon death?
  • Have you created a will and when was it last updated?
  • What comes to mind when you think of your tax situation?

A lot of questions, but they are important questions. A thorough needs-based assessment will give you the whole picture, an exclusive snapshot – a wide, panoramic view of your client’s income, assets, lifestyle, spending, risk and long-term goals. As an advisor, you need to get down to the nitty gritties to understand your client’s needs and see where the potential dangers lie.

The bonus? Yes, your client will sleep better knowing they have the coverage they need, but in participating in the assessment process, your client will also recognize the value of insurance and the meticulous process of providing coverage that is both detailed and specific to them.

PPI’s Toolkit Direct (login required) includes a new Insurance Needs Analysis applet that makes running a client’s needs simple from anywhere and on any device. What’s more, the Practice Assistant in Toolkit Direct has a bounty of resources to help you run a compliant practice including materials to support your needs based selling, such as a ‘reason why letter’ template.

If you would like further information on needs-based insurance, please contact your local PPI office.

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Needs Based Planning: It’s All About You!