5 Myths Your Prospects Believe About Life Insurance

By Allison Babberl on November 15, 2016 in Selling

5 Myths Your Prospects Believe About Life Insurance

Life Insurance Facts, Myths & Questions

When it comes to life insurance, many people have ideas about what it is, who needs it, how much it is, and the benefits. All of these ideas help lead to why only 62% of Americans have life insurance coverage. These ideas, formed from myths and presumptuous notions, also lead to a lot of questions. Questions your clients and prospects will have for you. These are some myths and questions you should keep in mind and thoroughly know the answers to so as to be best prepared.

Myth #1 I’m too young

Many young people don’t see the benefit of having life insurance. Often, they don’t see the point because they are still in the prime of their lives, and the thought of death is one of the furthest things from their mind. Recent studies show that the Millennial generation is the least insured generation yet with only 33% of Millennials owning life insurance.

What can you do?
Educate them on the benefits of buying life insurance young and early. The cost can be a burden, but the benefits far outweigh. Show them the importance of life insurance should anything happen to them and why they should seriously consider purchasing it (co-owned debt, mortgages, etc.). Just keep in mind how you approach the subject and the wording you choose because two of the things younger generations despise most are being patronized and talked down to.

Myth #2 I’m too old

Waiting to buy life insurance can cause a lot of anxiety. Folks that wait a while are often worried if they can even qualify or even find worthwhile coverage. A 2015 Nielsen report showed that only 49% of those of the Silent Generation (70+) and only 50% of the boomers had any coverage. So it shouldn’t be assumed that if they’re older they’re already covered.

What can you do?
Let them know that they do have options and that their cost will be much higher. Their goals will also be quite different from a 30-year-old and will likely want something more conservative. 

Myth #3 It’s too expensive

80% of Americans overestimate how much life insurance truly costs. When asked why they didn’t have life insurance, 86% of Americans answered that it was just too expensive and they couldn’t justify the expenditure against paying for basic living needs. Because of this lack of education, life insurance often falls to the wayside in financial importance. 

What can you do?
Showcase the value of the money over time vs. the burden of the current cost. Show them how the premium factors into the longevity of the coverage and why the cost is a necessary expenditure for the increased livelihood of their loved ones. The majority of people are concerned with the value they are receiving for the money they are paying, so center the focus on the value and benefit over the cost.

Myth #4 I’m too sick

This is a scary reality for many with pre-existing conditions or those that go through a traumatic experience or are suddenly diagnosed with a life-altering condition. Many of those that are suddenly diagnosed are already scared and worried, and the possibility of them not being able to provide for their loved ones only heightens those emotions. 

What can you do?
Show them that, yes, their quotes and premiums quite possibly will be higher than their healthier counterparts, but that in no way means they can’t afford coverage at all. NerdWallet found that a 50-year-old- man with high cholesterol and a family history of heart disease can buy a 20-year, $250,000 policy for $46 a month. Have charts drawn up for them to express their coverage vs. their cost so they can see their different options.

Myth #5 My employer provides me with coverage, that’s sufficient

Many Americans have group life benefits provided from their employer and believe this is sufficient. They don’t see the point in purchasing more when they’re already paying for the current coverage and are struggling to make ends meet.

What can you do?
Go over how far that money truly goes (the vast majority of group life provide 1-2 times your salary). Farmers Insurance advises having additional coverage to provide your family with a more substantial base and will cover you if you choose to change jobs. Go over their monthly/yearly expenses with them to see how long their group life will last before it runs out.

Selling the Coverage

There are many questions that surround the benefits of life insurance, but your prospects will likely have their own opinion on the necessity of the coverage for them. As insurance agents, it’s crucial for you to understand your audience and their goals in order for you to successfully sell them a policy. Check out our blog about the 15 Quick Tips for Marketing & Selling to Different Generations so you can get a better sense of what’s important to the audiences you’re targeting and how to reach them.

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Allison Babberl
Allison Babberl

Allison is the Marketing Content Specialist at AgencyBloc. She creates educational content and designs videos to promote AgencyBloc's resources to help you organize, automate, and grow your insurance agency. Favorite quote: “Conversation is the bedrock of relationships. Without it, our relationships are devoid of substance.” -Maribeth Kuzmeski More articles

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