To build a stronger rapport and more trust with your clients, ask if they know what factors can affect the cost of their life insurance policy. If they can’t name them all, let them know what factors they’re missing and why these factors affect their premiums. For those who don’t, offer a brief lesson on risk and the underwriting process.
It Can Provide Them Living Benefits
An unfortunate stigma attached to life insurance is that of death.
Traditionally, people bought life insurance for its death benefits, and these benefits are why many still do. About 91 percent of people participating in Life Happens and LIMRA’s 2018 study reported a reason they have life insurance is to cover their burial and final expenses. But, life insurance offers several living benefits that your current or prospective clients might not realize.
Allianz Life Insurance Company of America’s 2018 Life Insurance Needs Survey found most U.S. adults (88 percent) know about the death benefit part of permanent life coverage. Simple enough. However, 51 percent of those surveyed were unsure if or didn’t think that cash value from the same kind of coverage could be used to supplement their retirement income or help pay for college, among other financial needs. And, 66 percent didn’t know or think that benefits paid from life policies aren’t subject to tax.
As you’re talking with clients, remember to put the life back into life insurance. Lay out and explain all of its possible living benefits. If you’re working with older adults with no kids, point out that they can use life insurance to generate cash flow in retirement. For young parents, make sure to mention that they could use it down the road to pay for their kids’ college tuition. In addition, cover the riders they can add to their policies that offer living benefits, such as accelerated benefit payouts if critical illness strikes.
They Should Seriously Consider Buying It NOW
Deep down, your prospects probably know this one, but it’s something they need to be reminded of. Why? When they’re making a budget and listing the items they believe their money needs to go toward, chances are, life insurance premiums may not make the cut.
There are several reasons people put off buying life insurance. Those who are young and healthy might look at the glass half full and blindly trust that they have more time. Others place items that will bring them instant or near future gratification higher on the list. At the bottom of it all, a number of people don’t make life insurance as much of a priority as it should be.
Forty-eight percent of participants in Life Happens and LIMRA’s 2018 study estimated they’d feel the financial impact of losing their household’s primary wage earner within six months, and 54 percent estimated they’d feel it within one year. Yet, when asked what financial priorities keep them from buying some or more of life insurance, 50 percent reported paying for additional living expenses, such as internet, cable, and cellphones, and 21 percent reported paying for day-to-day recreational activities, such as going out to eat, movies, or shopping.
As humans, it’s not grim to consider our days numbered, rather it’s wise and realistic. We’re all aware that our health can change in the blink of an eye and decline as we age. However, people still wait… and wait… to buy life insurance. Some do so unaware that putting off buying a policy until they’re older will likely end up costing them more, especially if they or a close family member suffers a critical illness during that time.
When it comes to marketing life insurance, remember that, while educating is key, just bringing it into the conversation is a major step. Sometimes, people just need that extra reminder of the urgency of the situation to shift their priorities and make the right move.
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