Most financial professionals have been told “the sale is made in the fact finder or discovery process.” This means when the advisor leaves the initial meeting, they should have a fairly good understanding of where the prospect’s actions are misaligned with their intentions. In addition, the prospect also recognizes and acknowledges this and both the advisor and the prospect are in agreement regarding next steps.
This is especially important in the case of fact finding for a risk-based product such as life insurance because the challenge is in creating a sense of urgency. However, this is also where many advisors fall short and fail to obtain a true “case open” because their discovery process is inadequate and does not create alignment.
When it comes to fact finding, you should always open each section of the fact finder with an open-ended, ambiguous question. For example, “What are your thoughts on life insurance?” By beginning the life insurance discussion with this approach, the advisor is able to immediately identify the prospect’s opinions, beliefs and thoughts regarding life insurance. Furthermore, the prospect is then more apt to begin talking openly and answer the advisor’s questions without having to be repeatedly prompted. This helps the advisor avoid the typical “name, rank, and serial number” interrogation approach to fact finding.
After your initial question “What are your thoughts about life insurance,” you should follow up with questions such as:
- “Tell me about your existing life insurance coverage.”
- “How much coverage do you have through work?”
- “Do you have any individual coverage outside of work?”
Once the prospect begins discussing their existing life insurance coverage, you should probe deeper by asking about the various features of the policies. For example,
“Is it temporary or permanent coverage?” If it’s temporary coverage, you would follow up by asking, “When does it expire?” This begins to plant “seeds” into the prospect’s mind in regards to the features of their existing policies and you will find many people are not aware of the details of their existing coverage. You would then follow this discussion with the question, “What do you want your life insurance to do for you family?” This helps set the stage for the discussion regarding whether the existing coverage is the right amount.
Your next primary question would be “How did you come up with the amount of life insurance you own? Did you use a formula? Did someone help you determine the number?” Most people have not been guided by a life insurance expert through the steps to determine the actual amount of coverage they need. This provides an enormous educational opportunity for the advisor. Most advisors or agents in the industry will “ball park” the number or use a general rule-of-thumb. One way to differentiate yourself from the competition is to take the time to walk the prospect through the actual process of determining the right amount of coverage.
The follow up statement to “How did you come up with that amount?” should be “The amount of coverage you own is not right or wrong until you compare it to what you would want to have happen if, God forbid, you didn’t make it home tonight.” This is a very important power phrase, so I will repeat it for you: “The amount of coverage you own is not right or wrong until you compare it to what you would want to have happen if, God forbid, you didn’t make it home tonight.” This enables you to set the stage as you segue into the process of determining the need.
Questioning Process Review
Let’s review the questions you ask when fact finding for Life Insurance:
“What are your thoughts about Life Insurance?”
“Tell me about your existing life insurance program?”
“What do you want your life insurance to do for your family?”
“How did you determine the amount of coverage you currently have?”
And don’t forget the Power Phrase: “The amount of coverage you have isn’t right or wrong until you compare it to what you would want to have happen if, God forbid, you didn’t make it home tonight.”
In conclusion, financial professionals who follow this process when fact finding for life insurance will put themselves in a much better position to create alignment between themselves and the prospect. They have created buy-in and ownership because they have not told the prospect what they “should” or “ought to do.” The financial professional has simply facilitated the process of finding out what’s most important to the prospect and then helping them take the necessary steps to align their actions with their intentions to create financial security.
For a more detailed analysis, look at the article How to Conduct a Capital Needs Analysis.
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