When it comes to financial planning, the best offense is a good defense. No matter how meticulous and detailed an accumulation plan may be, an individual or family can still be completely blindsided by a lack of risk management. As clients move past their accumulation years, risk management becomes even more critical to the defense of a solid financial plan.

Yet conversations about risk management can be difficult. They invariably include discussions of insurance-more specifically, permanent insurance-a topic that many clients shy away from.

Questions of mortality aside, many clients are reluctant to shell out the big bucks for a product that, at first glance, doesn't appear to offer much return on investment. But while selling insurance may have been perceived as an "add-on" to investments in the past, it is quickly becoming part of the ongoing financial planning review process.

In cases where clients resist the idea of insurance, some financial advisors may choose to have clients sign a declination letter, saying, effectively, "I made the recommendation. The client declined. Case closed." But the case shouldn't close there. All has not been said and done-particularly if you consider yourself a comprehensive financial planner or a wealth manager.

WHAT'S IN A NAME?

These days, instead of referring to ourselves as reps or brokers, many of us are branding ourselves as financial advisors, financial planners or wealth managers. These monikers connote a level of financial oversight that goes beyond the managing clients' investable assets.

Indeed, the industry shares an assumption that a wealth manager, for example, has developed a client advocacy process to monitor all of a client's financial needs and risks continually. If that wealth manager uses an insurance declination letter to document a client's refusal to purchase a product-or worse, to avoid having the insurance conversation altogether-he or she may be avoiding a key function of the wealth manager role. More important, he or she may be sending the wrong message-that insurance is an afterthought, an optional part of the financial plan, instead of the foundation upon which plans are built.

Sure, it's perfectly acceptable for a client to say no to buying insurance if it doesn't make sense today. But the wealth manager should reexamine the topic regularly in an effort to identify exactly when it might become a suitable purchase. And when both the time and the client are ripe, that conversation should include an overview of the benefits of permanent insurance.

THE NAYSAYERS

First, it's important to understand why permanent insurance has earned itself a bad reputation over the years, making it a product many clients are reluctant even to consider. One reason lies with the many media pundits who argue that permanent insurance is a bad investment. Truthfully, sometimes it's not appropriate or even suitable.

For clients who haven't fully funded their retirement plan or who could benefit from a Roth IRA, there are better (and less expensive) options than permanent insurance. It's also not a good idea for clients with bad debt.

Another stigma attached to permanent insurance is the fact that good policies can often go bad when clients stop funding them-or agents stop servicing them. And, frankly, some clients just don't want to take the time to understand what the product can do for them, so financial advisors may be tempted to introduce product options that are easier to sell.

But none of these issues is insurmountable; they can all be addressed by a progressive wealth manager who has his or her clients' best interests in mind. Most important, the manager must be backed by a team of experts who can help run policy illustrations and provide case design support to help ensure that the advisor recommends the most appropriate products to clients.

BUILDING THE PROCESS

Mark Catrabone of Nicotra, Catrabone, Catrabone and Associates in Erie, Pa., has built a financial planning review process for new and existing clients that calls for discussing life insurance, which he revisits on a regular basis. Personal experience has taught Catrabone how important it is to have some protection against worst-case scenarios: "If it were not for the life insurance my mother purchased on my father years ago, my entire family would be in a much different position than we are today."

Catrabone is the risk management contact for his firm. While his insurance process helps to identify a client's need for insurance, it's his individual, consultative approach that helps to ensure that each client has the most prudent coverage for his or her needs now and in the future. Catrabone makes sure his clients understand the benefits of this hard-to-discuss topic.