Life Insurance Awareness Month

Taming the ‘Elephant’ of Life Insurance Needs

Employees know they need life insurance, but are you communicating to your clients about the benefits of whole life coverage?

by Pam Jenkins

Ms. Jenkins is assistant vice president of product and market development at Colonial Life & Accident Insurance Company. Visit

Even in today’s high-tech world, most of us would agree strong customer service is incredibly valuable as both a business and consumer.

At a restaurant, you expect to be told if refills are extra before you get the bill. At a consumer goods store, you expect to be able to ask questions about the latest high-tech gadget and get good answers.

When you don’t get the information you need and expect, you often don’t return.

Unfortunately, that’s the experience most Americans have with life insurance.

They know they need it, but they don’t know what kind or how much, no one is talking to them about it, and they don’t even know what questions or who to ask. Life insurance shouldn’t be the elephant in the room everyone knows is there but won’t talk about. You can be the “elephant tamer” by helping your clients make this most basic of all financial protection benefits available and understandable to their employees — and at no cost to your clients’ business. The key is you don’t sell life insurance. You communicate it.

Life insurance coverage gap

The problem is employer-provided group life coverage is all the life insurance most people have — and it’s not nearly enough. LIMRA estimates there’s a growing trillion dollar gap between the amount of life insurance we need and the amount we have (news release, Sept. 8, 2015). And most U.S. workers know it. A recent survey conducted by Harris Poll on behalf of Colonial Life found that 80 percent of employees in small businesses are interested in purchasing additional insurance benefits at work.

It isn’t just the dollar amount that’s a concern. Your clients’ group life insurance probably only covers their employees while they work there. If they change jobs, or retire, or have to leave work for any reason, the coverage usually ends. If that reason was a serious health problem, they may not be able to get coverage elsewhere later.

That’s why it’s important to offer your clients – and their employees – supplemental life insurance. Voluntary whole life products offered at the worksite can offer your clients a cost-effective way to expand their benefits program without incurring any additional cost.

Whole life insurance offers many advantages, options

There’s good reason to offer dependable whole life insurance to your clients in these uncertain times. This type of insurance is easy to explain and offers the following attractive features that quality financial protection companies can provide. Make sure you’re working with companies that offer features including:

  • Guarantees:
    The premium is guaranteed to remain the same for the life of the policy. And a guaranteed cash value builds as the policy ages. Employees will always know the amount of their death benefit and premium payment.
  • Portability:
    Employees can keep their coverage for as long as they choose (up to age 100), even if they change jobs or retire. They can simply choose a convenient individual payment method to continue paying premiums.
  • Options:
    Remember that every family has different needs, and those needs grow and change as families do. The flexibility to add benefit riders as needs change can be critical.

No need to kid around

If they change jobs, or retire, or have to leave work for any reason, the coverage usually ends. If that reason was a serious health problem, they may not be able to get coverage elsewhere later.

Whole life insurance also is a valuable voluntary benefit your clients’ employees may want to select for their children, grandchildren, step-children or adopted children.

This can begin a lifetime of protection at affordable rates. The younger children are when their coverage starts, the lower the rate. In fact, LIMRA’s 2015 Insurance Barometer Study says 45 percent of those who purchase juvenile life insurance do so to lock in a low rate. Buying whole life for a child also protects them against the chance an unexpected accident or illness could make life insurance more expensive — or even unavailable — later on.

Just like adult coverage, juvenile whole life accumulates cash value at a guaranteed rate as long as the policy is in effect. Of course, life insurance isn’t designed as a savings plan. But it can help play a role in providing a financial safety net, now and in the future.

Education can enhance life insurance sales

So what is the best way to communicate these options to your clients?

Some carriers offer personal benefits counseling as a complimentary part of their enrollment process. This face-to-face education can help employees better understand their benefits packages. And since research shows more than half of consumers prefer to purchase life insurance in person, through an agent, employees are likely to be very receptive (2013 Insurance Barometer Study, LIFE Foundation and LIMRA).

The knowledge offered through personal benefits counseling can also help overcome several barriers employees have to buying life insurance. Knowing what they’re buying is one of the most important factors consumers consider when buying life insurance, according to LIMRA. While 50 percent say getting the proper amount of coverage is important when making a buying decision, 43 percent also say they want to be certain they understand what they’re buying.

Cost is also a concern. Consumers tend to overestimate the cost of life insurance. When given the actual cost of a life insurance policy and then asked how this knowledge affects their likelihood to purchase, one-third considered themselves more likely to buy (2013 Insurance Barometer Study, LIFE Foundation and LIMRA). The personal service a one-to-one counseling session offers can be very valuable in helping employees overcome their objection regarding cost. Through the opportunity to ask questions face-to-face, employees can get the information they need to make more informed benefits decisions.

While everyone needs life insurance, few people enjoy discussing it – and even fewer really understand it. Consider yourself a consultant in working with your clients and their employees to help them protect their families through high-quality whole life insurance products. ◊