How Life Insurance Agents Impact Poverty

By Lloyd Lofton

When you struggle to make ends meet, it fundamentally changes your relationship to money.

Being poor means every experience centers on money.

Although poor people possess little money in relationship to others, money nonetheless becomes central to their everyday lives.

People who are not poor have little worry about common things but, to poor people, those common things are luxuries.

Poor people don’t plan for the future; they’re planning for right now.

Higher-quality products last longer than cheaper ones. Paying for products upfront means you don’t have to pay interest on credit cards or loans.

When you’re poor, none of that matters. Struggling financially is the bottom line. Other people focus on how much money they are letting go of now. But poor people are concerned about how much money they have left at the end of each day.

Being poor is expensive.

When you’re poor, because you lack money, you end up buying stuff at full price because you didn’t have the money to buy it when it was on sale.

You make minimum payments on credit card bills because you aren’t focused on paying off the balance; you’re concerned about meeting the minimum payment because that’s all you can afford so you can continue using the card.

Making the minimum payment means you may buy things that won’t last as long.

Why?

Because that’s all you can afford.

Poor people lose out on affordable, durable merchandise because all they can afford is what they have the minimum amount of money to buy.

With a sustainable income, some financial reserve to fall back on, poor people can take advantage of things on sale instead of having to buy them when they have the money.

With a sustainable income, they can make more than the minimum payment on their credit cards or student loans. They can buy bulk items at Sam’s Club or Costco, saving dollars instead of pennies because they don’t have to buy the smallest amount of something because that’s all the money they have.

When people who don’t have a sustainable income go to the grocery store, they often have a budget for the week. They buy what they can get for the least amount of money rather than what would last the longest or what would cost less over time.

Poor people are cheap (frugal).

Their way of life is scrimping and saving because they don’t have enough money to make ends meet; spending when you are in the red is counterintuitive for them.

For many, their habits and way of thinking about money is predicated on their anxieties about money.

For poor people living in poverty, the value of a dollar is a way of life.

How much things cost to survive becomes the way they measure their lives.

That means they eat what they can afford, not what’s healthiest. This results in health conditions that create financial burdens.

That means they can afford to eat at McDonald’s but they can’t afford to eat fresh fruit on a regular basis.

That means they can’t maintain a minimum balance to have a checking account, resulting in a failure to build a credit history, which then counts against them when they’re looking for housing, buying cars or getting a job.

For poor people - before comfort, value or opportunity - what things cost is the priority, more so than their physical or mental needs.

When you live on your last dollar, emergencies and unexpected major expenses aren’t inconvenient; they are liabilities.

Poor people are less likely to use preventive care because of cash flow, leaving them users of emergency services that could be avoided.

Poor people tend to be isolated from other members of society because they don’t have the money to go out to lunch, for example, or to spend a night out with friends.

Employment is crucial to keep from scraping by. But what do you do when a well-paying job is in another town or miles from a bus stop and you don’t have a car?

Becoming poor isn’t a choice when it’s sudden.

Widows who have been out of the workforce become vulnerable because the loss of their spouse’s income, Social Security or veterans’ benefits means they must challenge themselves.

What prevents them from having affordable housing? What allows them to finish raising their children instead of needing to pay for child care? What keeps their financial safety net from fraying, and prevents a void in the emotional support they need?

They find themselves constantly wondering what they could be doing to save money.

Widows find their lives centered around making things work with less, with guilt a constant companion.

They constantly consider what they can do without, get rid of or make last longer.

Unending anxiety and pressure drive them to sacrifice, go without, struggle to feel some redemption for what, ultimately, was avoidable.

Why was it avoidable?

While some salespeople sell furniture, appliances or cars, insurance agents sell solutions, resources and assets to minimize or mitigate these devastating situations.

When a family finds itself without a father or mother who put food on the table, there is hope.

When the possibility of a mother and kids having to move to a smaller home, in a different neighborhood, losing childhood friends, leaving their home church and living further from extended family because their income is reduced or lost, insurance agents bring a promise that the mortgage can be canceled, and the kids can live comfortably in the home they know and are secure in.

When parentless children become teenagers, their hope for a college education to build a rewarding and successful future is dashed.

They find hope that they will have better opportunities because of the life insurance their parents sacrificed to buy.

Things other families take for granted don’t have to become luxuries - things like going to the movies, buying a dress for the prom or going out for ice cream.

Insurance agents provide time with grandchildren, golfing in retirement, fishing, vacations and self-respect.

Insurance agents help provide these things.

Why?

Because the people who buy life insurance don’t need it – their family does!

And that’s who insurance agents should be talking about. Sell the problem families face, not the product you sell.

Lloyd Lofton, LUTCF, is the founder of Power Behind the Sales. He is the author of The Saleshero’s Guide To Handling Objections. Lloyd may be contacted at [email protected].