Life Insurance: Don’t Forget To Ask!

By Kevin Kimbrough

Having a holistic product and service suite to meet diverse client needs can be an essential key to success for any financial advisor’s practice. However, many practices do not proactively integrate life insurance into their offerings, making it an untapped opportunity for many financial advisors.

According to research conducted by Saybrus Partners, more than half of financial advisors (52 percent) don’t consider their life insurance sales and advice to be “successful” or “very successful.” The survey also discovered a gap between client needs and advisor opportunities. Close to half the advisors said that no more than 10 percent of their clients asked them about life insurance. Here’s what’s interesting: The vast majority of advisors (70 percent) still said that they do provide life insurance to clients “when appropriate.”

Clearly, there is a disconnect between what clients may request and what they may actually need when it comes to life insurance. Financial advisors have a great opportunity to bridge the gap and enhance the service they provide. Here are some ways financial advisors can incorporate life insurance efficiently into their client service.

1.    Make life insurance a part of annual review sessions. Ask clients to bring in their most recent annual statement or, simply ask, “Tell me about your life insurance.” Once clients share what coverage is in place and why, consider whether they have the right amount and the right type of policy for their needs. Ordering an inforce illustration from the carrier will help you understand how the policy is performing now and whether there is any danger of the policy lapsing. Making life insurance a consistent discussion topic will help advisors go deeper with existing clients.

2.    Identify clients with specific needs. The first step is for advisors to familiarize themselves with a few key life insurance strategies for addressing common client concerns. A short list of potential needs may include: maximizing a client’s legacy or safeguarding a family’s income while also supplementing retirement savings and/or planning for long -term care expenses. Advisors should review their client lists based on age, employment status and net worth to identify clients who will benefit most from a life insurance conversation, and invite those clients to a meeting.

3.    Consider calling an expert. Life insurance is complex and products are constantly evolving. Consider partnering with a local agent or bringing in an experienced specialist to take the lead on life insurance. Such partnerships can help best serve clients’ needs while minimizing advisors’ time commitment for staying abreast of life topics and solutions. They also effectively add a person to the team without adding overhead.

Advisors who integrate life insurance into their practice consistently will strengthen relationships with clients and their families, increase retention, create stability for assets under management and add a new revenue stream. Life insurance is a natural supplement to almost any financial advisor’s existing practice, and those who seize the opportunity will expand their value proposition for their clients and ultimately, enhance their overall business.

Kevin Kimbrough is principal, national sales, with Saybrus Partners. Kevin may be contacted at [email protected].

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