Goal-based Insurance Strategies Can Help Strengthen Your Portfolio

By Carl Trevison and Stephen Bearce

Goal-based Insurance Strategies Can Help Strengthen Your Portfolio

Similar to your investments, your insurance needs and related strategies change over time. As part of a smart financial strategy, it’s critical to review and adjust coverage at different life stages to make sure that you’re protected.

“I refer to insurance as one of the cornerstones of an effective financial strategy,” says Peter Landry, Director of Wells Fargo Advisors Life Insurance. “You can have the best investment strategy, and you can have the best rate on your loans, but it’s also important to have the right type of protection in place. Insurance is an important asset protection tool for any good financial strategy.”

Landry outlines four basic life stages that should trigger a reassessment of your insurance strategies.

Life stage: Starting out

When you’re launching a career, your insurance needs tend to fall primarily into the category of income replacement: helping ensure that critical expenses like the mortgage and college tuition are paid if you pass away.

During this stage in life, as you’re dealing with multiple expenses and trying to build wealth, it’s important that your insurance strategies are properly aligned with your budget and timeline.

“You may want to consider term life insurance—a good, relatively affordable solution that covers you until you reach your peak earning years and when you might see an overall reduction in your expenses as well,” says Landry. He suggests a level premium term policy that’s maybe 20 or 30 years.

Life stage: Pre-retirement

At around 45 to 60 years old, it may be appropriate to think about leveraging life insurance to help with retirement planning. “Several individuals in this age range may have maxed out what they can contribute to a 401(k) on an annual basis,” Landry says. “They may not have options from an income perspective to contribute to an IRA either.” 

Individuals in this situation who have a need for life insurance may want to consider insurance strategies such as an indexed universal life product or a variable universal life product. Several of these products are designed to accumulate cash value in the early years of the policy.

Landry says this approach is not necessarily geared toward funding a particular death benefit, but rather toward accumulating cash inside of the policy.

“The life insurance helps provide for your protection needs, but when properly structured, cash value may be assessed as part of a supplemental income strategy. In the right situation, these strategies can deliver a lot of value so as you get into retirement, you can seek to maximize things like Social Security and IRA withdrawals—and use that life insurance cash value as a bridge strategy.”

Note: Investments in variable universal life are subject to market risk, including loss of principal. Cash value will fluctuate in value based on market performance. Cash value is accessed through policy loans and withdrawals, which reduce death benefit.

Extended care planning

The third life stage involves insurance strategies based around extended care needs, an area where carriers have gotten creative with solutions, says Landry. Options include traditional long-term care insurance, a hybrid policy that combines life insurance and long-term care insurance, and a life insurance product with a long-term care rider.

Landry says that while some people are hesitant to use long-term care insurance strategies, if positioned properly they can be an effective estate-planning tool.

“The knock on long-term care coverage is, ‘If I never need it then I don’t really get any value from it.’ But in many cases, you can marry it with a life insurance product solution. You have a life insurance product, and if you need long-term care, you can draw upon that policy,” Landry says. “It reduces the face amount of the policy, but you are able to cover your costs related to long-term care services, and if you never need long-term care, well, you have a life insurance policy that you can leverage for your estate planning purposes.”

Legacy planning

The last life stage is legacy planning: using life insurance strategies to create leverage—in a tax-efficient manner—so you can leave a gift to your recipient of choice, such as a family member or charitable organization. These solutions tend to be individually tailored.

“We have insurance specialists who work hand-in-glove with estate planning attorneys to put together life insurance solutions that can help meet legacy planning needs,” Landry says.

At every stage, Landry says, he and his team focus not on products, but on solutions and insurance strategies. “It’s not about, ‘You have to get an insurance product,’” Landry says. “It’s, ‘Let’s talk about the insurance that you have. Is it still meeting your needs as you move through life’s stages?’”

This information is for informational purposes only. It is not intended to represent any specific product recommendation. Speak with your financial professional regarding your specific situation.

Insurance products are offered through non-bank insurance agency affiliates of Wells Fargo & Company and are underwritten by unaffiliated insurance companies.

Variable insurance products are sold by prospectus. Please consider the investment objectives, risks, charges and expenses carefully before investing. The prospectus, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.


Unlike variable life insurance, indexed universal life (IUL) policies are typically structured so that they are not securities registered with the SEC. Nor are the sales in IULs regulated by the SEC or FINRA Regulation, Inc.

This article was written by/for Wells Fargo Advisors and provided courtesy of Carl M. Trevisan, Managing Director-Investments and Stephen M. Bearce, First Vice President- Investments in Alexandria, VA at 800-247-8602.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

© 2019 Wells Fargo Clearing Services, LLC. All rights reserved.

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