Life Insurance Awareness Month

Revisiting The Basics Of Protection

It’s time for an honest conversation about life insurance

by Brian Vestergaard

Mr. Vestergaard (is Vice President of Product & Marketing for LifeSecure Insurance Company, based in Brighton, Mich. LifeSecure is dedicated to helping you see insurance differently and delivering an exceptional insurance experience. The company offers accident, critical illness, hospital recovery, final expense, term life and long term care insurance products. LifeSecure is licensed in 49 states and the District of Columbia. 

 

You know that life insurance is designed to provide indispensable financial support when it’s needed the most. But do your clients?

They may view life insurance as an obligatory financial planning purchase, or “just another insurance product” that they ought to consider. Recognized as Life Insurance Awareness Month, September provides the perfect opportunity to help your clients understand the vital role that life insurance can play in protecting their financial future.

This year the timing is also right because industry data shows that more consumers are motivated to have life insurance conversations. Total individual life insurance and term life insurance policy sales both grew in 2020, and in the first quarter of 2021, posted the strongest quarter-over-quarter policy sales increase in decades, according to LIMRA.

Whether you’re an industry veteran or just breaking into life sales, starting with the basics can set the table for a discussion that educates your clients, as well as uncovers their concerns and coverage needs. Here are nine simple questions to help steer your conversation.

Put The “Awareness” In “Life Insurance Awareness Month”

Q: How has the unexpected death of a loved one impacted your family or circle of friends?

Most people have a personal experience, whether it’s with a family member or a friend, where an unexpected death caused financial hardship. Uncovering a personal story – or even sharing one of your own – will help them begin to see life insurance as an investment in their family, rather than just another insurance product.

Q: What do you hope life insurance can accomplish for you and/or your family?

The COVID-19 pandemic was a wake-up call for a many people to re-evaluate financial goals and consider life coverage, but only about one-third of Americans understand the basics of life insurance.[1] In fact, 41% said they want to work with an agent to help them purchase the right amount of coverage.[2] Hearing your clients’ goals and educating them about the importance of life insurance is a great place to start.

It’s About Protection, Not The Product

Q: What are your concerns about protecting your family in your absence?

Some clients may be further along in their buying journey than others and will be prepared to talk about key life events. Because when life changes, so do financial goals – marriage, birth or adoption, buying a home, and even changing jobs can drive families to seek coverage. Three in every four people agree that financially preparing for life’s unknowns is a way to show your loved ones that you care.[3] No matter their age, as your clients move through different phases of their lives, they’ll begin thinking about ways to keep loved ones safe from financial worries.

Q: How would financial support help your extended family if you were to pass away prematurely?

Single adults need life insurance too. They may have people who depend on them, like an aging parent or a sibling. They may own a business or have outstanding debts. Or they may not want to burden their friends and family with their final expenses, as average funeral and burial costs nearly $8,000, according to the National Funeral Directors Association. Even if it’s further down their list of priorities, it’s worth having a conversation about how life coverage can provide them with valuable protection now and in the future.

Q: If you or your spouse dies tomorrow, how would your family’s financial life change?

Nearly one in three families would face financial hardship within a month if a primary wage earner died. It’s a question no one wants to think about, but another way to personalize a very real risk...

Nearly one in three families would face financial hardship within a month if a primary wage earner died.[4] It’s a question no one wants to think about, but another way to personalize a very real risk. Figuring out how much money their family would have to pay for things like a mortgage, daily bills, medical expenses and other debts can drive home life insurance’s value in planning for the unexpected.

Clear Common Hurdles

Q: Does your workplace life insurance provide enough coverage?

About one-third of American workers think so,[5] but odds are workplace coverage isn’t enough (most experts recommend around 10 years of income replacement in coverage). Workplace coverage is also tied to employment, it may not be portable when changing jobs, and employers may decide to drop coverage altogether. In short, the downsides outweigh the positives. And just as the COVID-19 pandemic has more Americans considering life coverage, seven in 10 people who already have coverage say they’re likely to buy more.[6] Whether they have worksite coverage or an existing individual policy, your clients will want to learn about other options and compare costs.

Q: How much would you expect to pay for the financial protection that life insurance provides?

Chances are their answer will be higher than the actual cost of coverage. According to a recent study, more than half of Americans overestimate the cost of life insurance at more than three times the actual cost, when in reality coverage can usually be had for about the cost of a few cups of coffee a month.

Q: Do you know the secret to saving money and getting the coverage you want?

Here’s the secret: the younger they buy, the better. Nearly 40% of life purchasers wish they had bought their policies at a younger age[7] – an important lesson for younger clients. No one knows what tomorrow will bring or how one’s health may change. Getting coverage when they’re younger and healthier can lock in the coverage they want at affordable rates. The same can also be said for senior clients, as there are many life and final expense solutions available for older adults with an eye on their financial future.

Q: Why wait any longer?

Find out what’s holding your clients back – aside from price, you’ll probably encounter common consumer myths that life insurance is difficult to purchase or that products are too complicated. But the truth is buying life coverage has never been easier. Many of today’s products, like LifeSecure’s Final Expense and Term Life insurance, balance convenience and affordability. Think straightforward coverage, simplified underwriting (no medical exams!), a streamlined e-application process with less paperwork and fast policy decisions.

And that’s because consumers are demanding an easy process – nearly 50% of Americans say they are more likely to buy life insurance using simplified underwriting.[8] With greater accessibility and renewed interest in life coverage, there’s no better time for your clients to act than right now.

Given the events of the past year and a half, the value of life insurance has never been clearer. And while Life Insurance Awareness Month is a great starting point with some clients, it should also be said that conversations about life insurance are too important to limit to one month. Whether it’s September 1st, October 1st or the middle of May, don’t pass up an opportunity to start a life insurance conversation. As advocates, we all have a year-round responsibility to preach the importance of life solutions, and producers will be the ones leading the way in helping more families protect their loved ones.

 

 

 

[1] Understanding Life — The Impact of Consumer Knowledge on Life Insurance Ownership (2019), LIMRA
[2] Insurance Barometer Study, LIMRA and Life Happens, 2020
[3] Insure Your Love Consumer Survey, Life Happens, 2019
[4] Insurance Barometer Study, LIMRA and Life Happens, 2020
[5] Insurance Barometer Study, LIMRA and Life Happens, 2021
[6] Life Insurance in Life Stages, LIMRA, 2020
[7] Insurance Barometer Study, LIMRA and Life Happens, 2021
[8] Insurance Barometer Study, LIMRA and Life Happens, 2021

 

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