Humans tend to focus on the present. This tendency to prioritize short-term goals over long-term ones doesn’t end at an insurance advisor’s door.

When presenting clients with several insurance options, you may have noticed they commonly choose the lowest- priced option, even if a higher-priced one is better in the long run. While you likely have experience explaining a policy’s long-term value to clients, a bigger issue occurs with short-term thinking: lack of connection with your clients’ beneficiaries.

Clients who have a trust, will, or life insurance policy are often not forthcoming with information to their beneficiaries. In many cases, family members aren’t even aware that they are beneficiaries. Whether clients feel reluctant to discuss financial matters with family or discomfort when thinking about end-of-life planning, this lack of communication can lead to conflict, confusion, and even lost wealth.

As an advisor, it’s your job to think long-term for your clients and your business. The good news is that organically building a bridge to your clients’ beneficiaries is easier with insurance technology.

Here’s how fostering communication among all parties benefits your clients, their beneficiaries, and your bottom line.

The Benefits for Insurance Clients & Beneficiaries

When clients and their beneficiaries are on the same page and connected to the insurance advisor, it gives clients the peace of mind that a plan is in place and will be handled according to their wishes.

Here are some of the benefits of keeping beneficiaries in the loop:

  • Eliminates confusion over what assets are being passed down, who gets what, etc.
  • Prevents future conflict among families by ironing out any issues before an event such as death occurs.
  • Reduces the risk of contributing to the unclaimed property issue by allowing beneficiaries to fully claim the assets given. (Read our blog on the $80 billion unclaimed property issue in the United States to learn more.)

Clients’ anxieties over what will happen to their families – and the assets they’re passing down to them – will be reduced when there is a relationship between beneficiaries and their advisor.  

The Benefits for Insurance Advisors

Bridging the gap to beneficiaries also provides several advantages to advisors. Doing so helps:

  • Build trust among your clients and their families. As you collaborate with the family, you act as a “financial quarterback” who creates and executes a successful, long-term plan. The more clients trust you, the more likely they will stay with you and buy additional products over time, and their family members may feel inclined to do the same.
  • Differentiate you as an advisor. For many potential clients, an advisor who is eager to be a resource to both them and their families to close the loop fully is a major plus that will set you apart from other advisors.
  • Keeps money in the clients' family by putting measures in place, such as who can access what and at what time. For instance, it can prevent beneficiaries from treating the money as a windfall and immediately cashing out with the advisor to spend it.

Ultimately, the most significant benefit for advisors is increased client retention and expansion. Advisors create loyal customers when they communicate and build trust. Retention is far more cost-effective than acquisition; on average, insurance agencies spend seven to nine times more to attract new customers rather than focusing on those they already have

By retaining your clients’ family members, you add generational loyalty to your client base, which grows your practice. More than 66% of children fire their family advisor due to a lack of collaboration and inclusion. However, fostering that direct relationship with family members early on improves the chances of keeping them as clients down the line.

Building a Bridge to Beneficiaries

Even though the benefits of bringing beneficiaries into the fold may be clear, getting clients on board is another matter.

It’s essential to appeal to the “strategic thinker” inside each of your clients. People who are working with an insurance advisor are already thinking long-term. However, they look to their advisor as a guide, and it is important that you fill in all the gaps. If they are putting in the time and money to financially plan, they should be advised to close the loop with those receiving the financial benefits.

One of the most effective ways of connecting clients and beneficiaries is through a secure insurtech platform. Platforms like Link by LegacyShield provide you and your clients with automated document sharing to beneficiaries. Insurance policies, files, documents, and more can all be shared at any time or automatically at preset life events or dates such as death or hospitalization.

That means that clients can still choose how and when they communicate with beneficiaries – whether it’s right away or later – but they can be confident that their advisor can reach out to the right people with the correct information.

With the power of digital technology, advisors can quickly provide peace of mind to clients and build a solid, multi-generational book of business.

To learn more about the importance of client collaboration, read our blog, “Why Insurance Agents Should Care About Collaboration.”

Krystal Lockwood

Written by Krystal Lockwood

Krystal has spent her entire career advising executives on how to grow their businesses with modern sales techniques and software solutions. As LegacyShield's Vice President of Sales, Krystal works with insurance and financial professionals to build their business and provide relevant value-added services to their practices.