{"id":13948,"date":"2024-08-14T07:13:00","date_gmt":"2024-08-14T12:13:00","guid":{"rendered":"https:\/\/www.figmarketing.com\/blog\/?p=13948"},"modified":"2025-03-20T13:13:01","modified_gmt":"2025-03-20T18:13:01","slug":"inflations-impact-on-life-insurance-2-tools-for-financial-professionals","status":"publish","type":"post","link":"https:\/\/www.figmarketing.com\/blog\/inflations-impact-on-life-insurance-2-tools-for-financial-professionals\/","title":{"rendered":"Inflation\u2019s Impact on Life Insurance: 2 Tools for Financial Professionals"},"content":{"rendered":"\n

Updated March 20, 2025, at 2:13 PM<\/em><\/p>\n\n\n\n

From the numbers above the gas pump to the price tag on eggs, evidence of inflation has long been visible in our daily lives, and the insurance industry is certainly no exception.<\/em><\/strong><\/p>\n\n\n\n\n\n\n\n

With auto insurance premiums increasing 6%<\/a><\/strong> in 2024 and rate hikes for home insurance predicted to reach anywhere between 6-23% in some states<\/a><\/strong>, inflation\u2019s impact is top of mind for many clients.<\/p>\n\n\n\n

Still, another area of insurance that clients may have never considered being impacted by inflation is their life insurance.<\/em><\/p>\n\n\n\n

Life Insurance Awareness Month<\/a><\/strong> every September brings an opportunity to initiate conversations with clients and prospects about inflation\u2014a topic that already has their attention\u2014while revealing potential opportunities for improvement they didn\u2019t know existed.<\/p>\n\n\n\n

First, let\u2019s examine how inflation is affecting retirement portfolios in general.<\/p>\n\n\n\n

The Data Around \u201cInflated\u201d Retirement Concerns<\/strong><\/h2>\n\n\n\n

Looking closely at the statistics, it can be observed that as inflation raises prices, there\u2019s a shift in the behavior of retirement savers.<\/p>\n\n\n

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There\u2019s much to be said about inflation\u2019s impact on a retirement portfolio, and while topics like estate planning and care planning are high on the client\u2019s list of concerns, another important asset to highlight in conversations\u2014which is also heavily intertwined with estate planning\u2014is life insurance.<\/p>\n\n\n\n

Related: Turn Stagnant Assets into Tax-Advantaged Care Planning Solutions<\/a><\/h4>\n\n\n\n

Inflation\u2019s Hidden Mark on Life Insurance<\/strong><\/h4>\n\n\n\n

When we talk about inflation\u2019s impact on life insurance, what we\u2019re addressing is the decrease in the purchasing power of the death benefit<\/a><\/strong>. To put it into perspective, a $1M face amount ten years ago is worth $825K in today\u2019s dollars.<\/p>\n\n\n\n

If you factor in a client\u2019s potential income growth alongside the diminished purchasing power of the death benefit, you get a coverage shortfall that could significantly affect the beneficiaries.<\/p>\n\n\n

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Considering life insurance is likely one of the most significant assets in a client\u2019s estate, financial professionals must ensure that it meets their needs throughout economic and life changes.<\/p>\n\n\n\n

How Financial Professionals Can \u201cDeflate\u201d Concerns<\/strong><\/h2>\n\n\n\n

Whether it\u2019s divorce, the birth of a child, a career shift, or a significant health change, there are many reasons why it\u2019s a good idea to regularly review in-force life insurance policies<\/strong> to ensure they still meet a client\u2019s goals.<\/p>\n\n\n\n

However, even if someone hasn\u2019t undergone any life changes in the previous year, inflation is reason enough to analyze their current life insurance policy for coverage gaps. By evaluating the face amount relative to current inflation rates, you can offer guidance for adjusting coverage as necessary or explore policy options designed to hedge against inflation, such as indexed universal life insurance or other solutions.<\/p>\n\n\n\n

It\u2019s true: Individual policy reviews can be time-consuming. The good news is that two tools can dramatically streamline the process for financial professionals.<\/strong><\/p>\n\n\n\n

Introducing the Life Insurance Inflation Calculator<\/strong><\/h4>\n\n\n\n

The new Life Insurance Inflation Calculator<\/strong> may be considered a financial professional\u2019s secret weapon in revealing the impact of inflation on a client\u2019s in-force policy. This quick, easy-to-use tool evaluates existing coverage and current income to identify protection gaps. After inputting a few details about a policy, you receive a straightforward output that can be presented to clients.<\/p>\n\n\n\n

Utilizing the Life Insurance Inflation Calculator in your policy reviews can strengthen relationships with current clients and open doors for referrals.<\/strong> For example, after seeing the results from the calculator tool, clients may very well bring the experience up in conversation with family and friends when the topic of inflation arises, prompting new prospects to seek your guidance.<\/p>\n\n\n\n

Leveraging the Comprehensive Analysis and Review Program<\/strong><\/h4>\n\n\n\n

After revealing a potential coverage gap using the Life Insurance Inflation Calculator, the Comprehensive Analysis and Review (CAR) program <\/strong>is a practical next step to implement.<\/p>\n\n\n\n

The program allows financial professionals to lean on a team of experts to handle all the heavy lifting associated with a life insurance policy review. The team can gather in-force illustrations with signed authorization and analyze its current performance against today’s marketplace. Then, a snapshot presentation with suggestions for suitable alternatives (if applicable) is provided for an easy conversation with clients.<\/p>\n\n\n\n

Related: <\/strong>Life Insurance Policy Reviews for Clients [CAR Overview]<\/strong><\/a><\/h4>\n\n\n\n

Jumping at Life Insurance Awareness Month Opportunities<\/strong><\/h4>\n\n\n\n

September offers financial professionals a unique opportunity to educate clients and prospects about the necessity of reviewing their coverage. Efforts can be as large as hosting a webinar or information luncheon about inflation or as simple as sending a personalized email to clients offering to conduct a free policy evaluation.<\/p>\n\n\n\n

If you\u2019d like to arm yourself with the Life Insurance Inflation Calculator, Comprehensive Analysis and Review program, or other tools to aid in these powerful conversations, contact our team today!<\/p>\n\n\n\n

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Sources From Graphic:<\/em><\/p>\n\n\n\n

3. https:\/\/www.forbes.com\/sites\/dandoonan\/2024\/04\/11\/americans-are-worried-about-retirement-savings-and-they-should-be\/<\/a>
4. https:\/\/www.schroders.com\/en-us\/us\/institutional\/media-center\/schroders-retirement-study-finds-inflation-taking-toll-on-retirees\/<\/a>
5. https:\/\/www.allianzlife.com\/about\/newsroom\/2024-Press-Releases\/Americans-Reducing-Retirement-Savings-and-Taking-on-Debt-Due-to-Inflation<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Inflation continues to be a worry for financial professionals and clients a like. Here’s how it’s affecting life insurance policies.<\/p>\n","protected":false},"author":84,"featured_media":13936,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[362],"tags":[392,579,677,108,210],"acf":[],"_links":{"self":[{"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/posts\/13948"}],"collection":[{"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/users\/84"}],"replies":[{"embeddable":true,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/comments?post=13948"}],"version-history":[{"count":18,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/posts\/13948\/revisions"}],"predecessor-version":[{"id":14467,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/posts\/13948\/revisions\/14467"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/media\/13936"}],"wp:attachment":[{"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/media?parent=13948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/categories?post=13948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.figmarketing.com\/blog\/wp-json\/wp\/v2\/tags?post=13948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}