Selling Life Insurance to Those Who Don't See the Value
Selling life insurance to people who don’t see the value or the need for it is all about education. You might feel like you’re stuck in the difficult position of not wanting to push something on clients who don’t wish to add to their monthly expenses, yet you’ve heard prospects or clients say they regret not purchasing it at a younger age when rates are typically better (40% of insured wish they’d bought coverage sooner).
As advisors, you’re the expert who can educate them on the true cost, help them see the value, and, ultimately, determine how much coverage they need.
Helping clients see the value in something that isn’t physically tangible or something they can “use” can be a difficult conversation. The best way to navigate this is to tell stories of how your current clients have benefited or by providing examples of reasons (beyond covering burial expenses) that people buy life insurance. For example, it can help with leftover bills, like student loans, that aren’t always forgiven at death.
Case studies are a great way to tell your current clients’ stories to prospects or during cross-sell meetings. If you’re new to creating case studies or looking to improve yours, check out our downloadable case study templates.
Policygenius says the top reasons Americans buy life insurance are:
- 84% - to cover burial/final expenses
- 66% - for wealth transfer
- 62% - for income replacement
- 57% - for supplement retirement income
- 50% - to pay off mortgage
For more on selling best practices, check out our blog: How to Use Neuromarketing to Improve Your Conversions & Retention. Using neuromarketing techniques, salespeople are able to speak directly to the decision-making part of the brain by demonstrating gain, contrasting pain with the solution, and more—all really important things when discussing life insurance.
Life Insurance Needs Assessment Tools
You may already have some resources from carriers or from your agency that help you walk clients through the various factors affecting how much life insurance they need. However, the more resources the better.
We gathered together some online resources we found when it comes to assessing the need for life insurance. Use these in tandem with what you already have to provide the best experience possible for your clients.
Online Needs Assessment Calculators
From Insurance Companies (beware that some of these ask for information and are used as a way for them to capture leads; however, they are good examples for helping you build your own!):
We came across another way to calculate life insurance needs from Kiplinger. This model strives to simplify the calculation and may provide a lower amount for clients who are more wary of committing to a larger investment.
Kiplinger's Simple Solution
|Outstanding Student Loan Debt
|Outstanding Car Loan Debt
|Any Other Outstanding Burdensome Debt (i.e. credit cards)
Education Expenses For Children (optional)
Current estimates: $53,980/yr. (private), $26,950/yr. (in-state public)
Take one of these three numbers and multiply by 4 years and by the number of children you have.
Replace 50% of what you currently make until retirement age)
|Estimated Life Insurance Need
Overall, there are some basic factors every client will need to consider when purchasing life insurance. Those are:
- Their income
- A partner’s income
- Child expenses
- Private student loans
- Business expenses
- Other debts that would be a burden on family members
Keep this list handy or even create a small card or handout as a reminder for clients when they leave the meeting with you.
Client needs assessments can be used across your business for more than just life insurance, as well. They’re handy tools to identify cross-selling opportunities, as New Horizons Insurance Marketing points out in their video.
Once you’ve helped your client see the value and have identified the coverage amount they need, it’s all about follow-up. Whether you sold the policy that same meeting or not, you should be following up either to close the deal or to begin onboarding the new client.
Check out our eBook about automating processes like prospect follow-up and client onboarding to be sure you create lasting, positive relationships with your clients.
[Free eBook] Automated Workflow for Insurance Agencies
Use automated workflow in your insurance agency to create efficiencies, maintain communication with clients and prospects, and ensure accuracy in your day-to-day processes.