InsuranceMortgagePropertiesInsurance planning: The missing piece of the puzzle for many financial advisors

14 July 20230

We’ve all heard it: “Insurance is not for now, it’s for the future.” Yet, too many overlook the importance of this essential financial tool. As a financial advisor, incorporating insurance strategies into our offerings not only adds a level of security for our clients, but also elevates our services as a comprehensive financial planning solution.

Understanding the role of insurance

Insurance, at its essence, is risk management. It protects against potential losses that can lead to financial disaster. This plays a crucial role in financial planning, a role that has become more relevant as we go through uncertain times, a volatile economy, and the unpredictable twists and turns of life.

The most obvious benefit of insurance is the financial protection it offers the insured’s family or business in the event of a crisis, such as an untimely death, illness, or a devastating natural disaster. However, insurance policies play an equally crucial role in retirement planning, wealth management, and estate planning.

Without life insurance, an unexpected death can leave a family grappling not only with emotional loss but also with a sudden financial burden. Similarly, without health insurance, medical emergencies can lead to financial ruin. For this reason, insurance is not just a “good to have,” but a necessity.

The value for financial advisors

For financial advisors, insurance serves a dual purpose. First, it adds a layer of security to the financial plans they design for clients, ensuring that their investments and futures are protected from unforeseen circumstances. Second, offering insurance policies can provide an additional revenue stream for advisors.

Financial advisors are often privy to the most intimate details of their clients’ financial lives. They have their finger on the pulse regarding a client’s risk appetite, financial goals, and family situation, and can then recommend the insurance policies that best suit his or her needs. This value-added service not only helps clients secure their future, but also deepens the relationship between advisor and client, leading to long-term retention and referrals.

Challenges and pitfalls

Despite its importance and potential benefits, there are challenges that advisors may face in this area. First, insurance is a complex product with a variety of plans and clauses. Advisors must continually update their knowledge and stay abreast of policy changes to ensure that they recommend the most appropriate coverage for their clients.

Second, insurance is often a difficult product to sell. Many customers see insurance as an unnecessary expense, in most Italians, especially if they are young and healthy. Educating customers about the meaning of insurance and convincing them of its importance can be a long and daunting, but necessary, task.
The nature of insurance commission structures can sometimes lead to potential conflicts of interest. Advisors must be careful to avoid recommendations driven by commissions rather than the best interest of the client.
It must be made clear to their clients, that insurance is not an expense, but an investment in security. Insurance must be part of any sound financial plan. It is the foundation on which financial security rests. Term life insurance is a fundamental part of financial planning. When it happens, it is good to know that your family’s financial future is not left to chance

Navigating the insurance landscape

It is critical for financial advisors to stay informed and continually educate themselves on the constant changes in various insurance products. Equally important is the ability to educate clients about the value of insurance coverage.

In an increasingly digitized world, online resources and virtual meeting platforms can help facilitate this process. Webinars, infographics, personalized emails and social media posts can be used to share valuable information about insurance policies and their benefits. Advisors can also partner with insurance companies that offer training and assistance, helping them navigate the complex insurance landscape.


In the grand scheme of financial planning, insurance strategies are not just an add-on, but an essential, not to say vital component that can safeguard a client’s financial future. They offer clients the peace of mind of knowing that they are protected from unforeseen financial loss. It is also a way for advisors to provide a more holistic approach to financial planning. Although the road can be strewn with challenges and pitfalls, with the right knowledge, skills and passion, financial advisors can bring immense value to their clients’ lives.

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