Start the life insurance conversation during Insure Your Love Month

Where are interest rates headed? Is the Nasdaq up or down? Do I have the right mix of equities and bonds in my retirement portfolio? 

Clients have so many things to consider these days, it’s easy for them to lose sight of just how important risk-protection products are in a comprehensive financial plan. Yet the consequences of overlooking this base of a solid financial pyramid are all too real. We all have seen unfortunate and sometimes tragic situations involving families who lacked life insurance, long-term care coverage or disability-income insurance and suffered a catastrophic loss.

Deep down, they know. Around 30% of adults ages 18 to 75 who lack life insurance say they need it, representing about 74 million people. More than 1 in 10 of those who own life insurance say they need more. That’s another 27 million people. These numbers come from the annual Insurance Barometer Study conducted by LIMRA and Life Happens, and they represent a profound life insurance “need gap.”

The survey shows that many people have the right instincts. It’s our job as financial professionals looking out for their best interests to encourage them to act on those instincts and to fill the gap. 

Confronting objections 

People know they need it, so why don’t they have it? The No. 1 reason they give for not having any coverage or not having enough coverage, according to the Barometer Study, is that they perceive it as being too expensive. The second leading reason is that they have other financial priorities.

As advisors, we talk with our clients all the time to help them create and prioritize their financial goals. There is no one better to convince them that their instincts are right — life insurance is important. Rather than being an expense they can’t afford or that will force them to scale back other priorities, life insurance is the foundation that allows them to achieve their goals. Besides, their cost objections may be overblown or completely unfounded. Surveys show that most people significantly overestimate the cost of coverage. 

The third leading reason people give for not having life insurance or not having enough is that they don’t know what they need or they don’t understand the product. This is where we can really make a difference. Our clients work with us because they trust us and know we are working in their best interests. We are uniquely empowered to show them how life insurance fits into their financial plan. But we don’t have to do it alone.

Overcoming inertia

Life insurance may not be as sexy as some of the other products and services we provide. Maybe it’s not as exciting as creating a plan to put their children through college. Asking clients to consider how their loved ones would fare if the client were no longer around is not the same optimistic conversation as talking to them about setting up an individual retirement account to enjoy a happy retirement. In fact, 17% of people who report that they need life insurance but don’t have it say one reason is that they don’t like thinking about death. 

Fortunately, there are ways to get past these obstacles. Each February, Life Happens sponsors Insure Your Love Month to reframe the conversation about life insurance in a more positive light. The overriding theme of the month is that buying life insurance is ultimately an act of love.

Life Happens found, for example, that 59% of people would feel more secure in their relationships if getting life insurance were something they discussed with their partner. And 40% of men and 33% of women say that purchasing a life insurance policy is a financial way to demonstrate your love. Framing the purchase of life insurance as a loving act can get many people past their objections or reluctance.

Many companies have excellent materials about how their products can help people protect themselves and their families. Life Happens also offers a wide range of resources — from messaging to graphics to social media posts — you can share with clients and in your community. Some of these are specific to Insure Your Love Month, while others are suitable year-round. 

However we spread the word, it’s worthwhile. We are the best resource our clients have to ensure they don’t become one of the tragic stories. Starting the life insurance conversation can only benefit the families we serve and help close the need gap.

Barbara Pietrangelo, CFP, CLU, ChFC, has been a NAIFA member since 1992. She was the 2023 president of Life Happens and serves on NAIFA’s board of trustees. Contact her at [email protected].