How an agent can effectively counter life insurance objections

Image of a small figure looking up at a huge hand holding a sign with an "x" on it.

By Steven A. Morelli

If you’re a professional encountering life insurance objections from prospects, it could be because of incorrect or incomplete information they are getting from the media.

Articles pop up fairly often hitting familiar themes and it can behoove a life insurance professional to be prepared for them. For example, CBS News has posted a few stories recommending questions to ask and mistakes to avoid.

We’ll start with this article: “Life insurance mistakes seniors should avoid.”

Good news, it starts out by encouraging seniors to consider life insurance even though they are older, saying that the cost-benefit analysis might not seem to work out but that is a misconception.

More good news! Not getting enough coverage is the first mistake. The author discusses the typical uses of life insurance – paying off final expenses, clearing debt and the like. But then the next point is avoiding overinsuring. There is no discussion on other factors, such as leaving a legacy.

Then comes the usual “mistake” of buying permanent life insurance. The article states that if readers want to get insurance without paying top dollar, they should forgo whole life and opt for term. The extra expense of permanent coverage would eat into seniors’ retirement savings and Social Security. But of course, a responsible life agent wouldn’t be putting someone into something they couldn’t afford. Then again, we know some agents are in it more for the bucks than the service to others.

Then comes the practical improperly listing beneficiaries, recommending that readers make extra sure that they listed beneficiaries correctly. “The whold point of a term life insurance policyis to leaven money for loved ones after your death,” the author states.

The article wraps up saying that seniors should familiarize themselves with types of coverage, although the author has already told readers not even to consider permanent coverage.

Prompted questions

The next article lists the questions prospects should ask.

Good news again! The article, “Meeting a life insurance agent? Ask these important questions,” starts by saying that life insurance could be the most important financial protection the reader can have.

The article suggests four questions.

What kind of policy do I need? This is an improvement over the previous article because it mentions the different kinds of coverage without shutting down most of the options. The article states the insurance professional will go over goals and budget – again, an improvement over the other article.

How much life insurance do I need? Another good point that the agent will discuss the client’s situation and recommend an amount based on financial obligations, goals and age – mixed with a warning not to overpay.

How much should I pay? This one boils down to insurance is more expensive for older people. According to the article, the agent will give the prospect a ballpark figure on the premium. It also advises “to get an exact figure you’ll also want to do your own research,” but does not say how (although there is a link to an advertiser’s application process).

Who should I list as my beneficiaries? Helpful point that if children are minors, it could be problematic to list them as beneficiaries because they would have to go through a legal process to get the money. It doesn't discuss the problem of handing a pile of cash to people too young to manage it.

Countering life insurance objections with LAER

Of course, even without consumer media influence, prospects bring their own prejudices and life insurance objections to the insurance discussion.

To deal with any question or objection, you can LAER: Listen, Acknowledge, Explore and Respond.

Listen to get the full picture of the objection. Don’t just listen and assume the objection, such as “I don’t want permanent life insurance.” Be quiet and listen with respect and without judgment. The agent might be ready with a response, but jumping right to it cuts off the person’s complete thought and makes the agent look like they are just using a sales process. And who likes to feel manipulated by a sales process?

Acknowledge the objection. This is important because the other person needs to feel heard. The agent might think they are countering the objection, but the prospect might not think the agent even heard them. If the agent repeats the objection back to the prospect, the agent shows they were listening and can clarify any misperceptions the agent might have had. Again, without judgment. That objection is valid because it is meaningful to that person.

Explore the objection. If the agent assumes the reason for the objection, they miss an opportunity for the prospect to think through their reasoning. Asking why opens the door to the anxieties the prospect might have about insurance and the sales process. Once again, no judgment – the goal is to understand the prospect and the objection, not to correct them. Maybe they don’t want permanent life insurance because a trusted friend said that they would be a sucker if they bought it. That’s a big shame issue to overcome.

Respond to the objection. If the agent has done the other steps well, the prospect might resolve the objection on their own. They might realize they have been unreasonably closed to the idea of permanent insurance and want to hear more. In the response, the agent can acknowledge the objection and reasoning and move on to ask if the prospect would be open to explore something that might be to their benefit. This makes it clear that this process is about getting the client into the right solution and not to elevate an agent’s commission.

The key to responding is reflecting, not reacting.

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].