Dennis Martin, president of Individual Life and Financial Services at OneAmerica and Jay Jackson, President and CEO of Abacus Life, answer questions about financial security during this unstable economic climate and what people can do to protect themselves.
Dennis Martin
President, Individual Life and Financial Services at OneAmerica
How can people in this financial climate make the most of their money and be prepared for uncertainty in the future?
Though this type of uncertain financial climate increases the focus on finances, it doesn’t change the principles that should guide decisions. Just like in any climate, it’s important to look at your overall picture. Having a trusted financial professional who can help you build and understand your plan for the long term is perhaps the best way to navigate the uncertainty in the near term. Know your plan and the principles that are guiding you. Stay the course or adjust in measured ways with your financial professional.
What are some ways that people can invest their money wisely and safely during this time?
In my view, savings become even more important in times like these. It’s important to have short-term savings that can help cover cash needs in cases of income disruption. Doing so can ensure you don’t have to make rash decisions with respect to investments, as those are more long-term decisions. These times certainly test our investment risk tolerance. It seems as if we all like risk when it means higher return, but less so when we experience volatility or losses. Again, a trusted financial professional can help ensure you have a solid strategy that is aligned with your risk tolerance and short-term cash needs.
What are some of the benefits of getting life insurance and investing earlier in life?
Starting early puts time on your side. Life insurance is much cheaper and easier to acquire when you are young and healthy, so getting it earlier can lower your costs over the long run. In a similar way, starting to invest at a younger age takes advantage of the power of compounding, which can have a significant effect over time. In both cases, starting a financial security plan early in life creates a habit of accumulating versus consuming. Implementing these good behaviors during the healthy and prosperous times in our lives positions us to weather the uncertainties that we’re all sure to encounter along the way.
Financial education is very important, especially now. What are some ways that people who aren’t in the financial world get educated on these topics?
Education is always a top focus for OneAmerica, and we aim to provide resources that guide individuals through all phases of their financial life. Our website offers a lot of great tools and a way for people to gather information and get an initial understanding of what’s out there. In many cases, it will eventually be prudent to seek out a trusted financial professional, who can provide personal guidance and tailor a plan and course of action. I would encourage people to interview more than one professional to find someone who they can trust and who understands their situation. These days, this can be done virtually in many instances and, for those that prefer it, it can still be done in-person the old-fashioned way (subject to appropriate social distancing guidelines of course!).
Investing involves risk which includes the potential loss of principal. Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.
Jay Jackson
President and CEO, Abacus Life
How can people in this financial climate make the most of their money and be prepared for uncertainty in the future?
Thanks to incredible advances in medical sciences, preventative care, and better awareness of healthy living, Americans are living longer, healthier lives. But the negative corollary is that retirement savings haven’t expanded to cover the additional needed years of income, leaving more seniors financially unprepared to enjoy their longer lifespan.
The recent financial climate has created a vacuum of fear and uncertainty forcing all of us to rethink our financial allocations and cash reserves. The volatility in today’s market has our seniors questioning how long their hard-earned savings will last, reassessing where their future cash needs are going to come from.
What are some ways that people can invest their money wisely and safely during this time?
First and foremost, investors need to understand their financial options and liquidity needs. During this time, it is wise to dedicate yourself to understanding all of your financial options related to your investments (including your life insurance policy) and ensure they are suitable for both your immediate needs and long-term financial goals. Awareness that you own your life insurance and can sell that policy amongst financial advisors, broker dealers, and other financial professionals is unfortunately extremely low and should be a tool they use to help their clients address financial difficulties.
What are some of the benefits of life settlements as a senior trying to make the most of their money?
JJ: After homeownership, life insurance policies, including term life policies, are often a senior’s largest asset, but few realize their policy actually belongs to them and not to the insurance company. More than 90 percent of people often do not know they can actually sell their policy, or a portion of it, if there is a better use today for equity they’ve built, rather than after they pass. Capitalizing on the equity built in their life insurance policy is typically used for estate planning, charitable giving, pending medical costs, and long-term care expenses.
How can more older individuals and seniors become aware of the financial options that they have with their investments and assets?
JJ: Fortunately, over the last few years, the option to sell a life insurance policy has seen a surge of interest as more seniors’ grapple with an uncertain future. People need a better understanding of the financial alternatives and options available to them. All you have to do is simply contact your financial advisor or agent and ask, “What is the secondary market value of my life insurance policy?” Or contact Abacus Life and we can instantly quote an estimated market value in just a few seconds.
Everyone has the right to know their insurance policy is their property and can choose to do with it what they like. And whether life insurance companies like it or not, the fact is that selling a policy to recoup the current equity can be a far better option than continuing to pay increasingly high premiums or allowing the policy to lapse, which happens to a stunning 99 percent of term life policies.