Life insurance can play an important role in completing clients’ planning goals. I can't tell you the number of times that I've seen a policy make a significant difference after the death of the insured — for example, children being able to go to college, spouses not having to sell off assets to survive, or even family businesses continuing after the owner’s death. So many other situations exist where life insurance benefits are crucial in accomplishing clients’ goals. Sometimes, however, having an open conversation with clients about the protection and benefits of life insurance can be met with objection.
How do financial professionals overcome common client objections?
A number of misunderstandings are common when it comes to life insurance. Let me share two of the more frequent objections I’ve heard: “I can't afford it” or “I don't need it.” When I hear those objections, it tells me that one of those two factors is likely at play; sometimes, even both factors are influencing the client’s decisions.
First, clients want to know that the life insurance being proposed to them will not impact their current lifestyle needs. They want to ensure that it will fit in with their budget. The good news is that there are so many different types of policies available, and there are many ways they can be structured. The cost of a policy depends on many factors — an insured’s health, the amount and type of coverage desired, and the various options a client wants. With careful policy design, a life insurance professional often can tailor a policy to the clients’ needs as well as their budgets.
Additionally, many life insurance professionals have numerous tools available to run different simulations to demonstrate affordability. These tools show clients whether the proposed plan is within their budget and, therefore, not going to impact their lifestyle needs. Ultimately, if we design the right policy illustration and demonstrate how the cost structure fits into the clients’ overall budget, they should be comfortable that the proposed policy is a good fit for them economically.
Addressing the second objection from clients -- “I don't need it” — takes a bit more education. Clients often are unfamiliar with all benefits that life insurance can offer. They do not always understand the different ways life insurance can fit into their overall long-term plan. This is where asking the right questions is vital.
Asking the right questions at the beginning of the conversation, followed by listening to client responses to know where life insurance fits as a solution, can help identify the need. Life insurance isn't just about income replacement at death, though clients often think it is. In addition to the uses mentioned previously, life insurance helps address concerns such as equalizing inheritances between children or maybe retaining that one key employee who is integral to their family business. Life insurance can provide liquidity to pay transfer costs at death or create a legacy for family and supported charities.
In addition to planning with the death benefit, there are lifetime benefits to life insurance that many clients don't realize. For example, life insurance can be used to address retirement income or long-term care concerns. The possibilities with planning with life insurance are numerous — our job is to listen and match the product with the goals.
Finding the right product, illustrating its affordability and matching the policy to what the client wants to accomplish is key to overcoming two of the more common objections of affordability and need. It’s essential to remember that clients often come to us with a particular goal or concern — they don't always know if they need life insurance to address that need. As financial professionals, we are here to provide those solutions that give clients reassurance. Because, at the end of the day, that’s really what life insurance is about — providing comfort and confidence for clients who trust us with their specific planning objectives.
Carma McCallie, JD, is vice president, advanced sales, Crump Life Insurance Services. She may be contacted at [email protected].