Ask people what a human life is worth and they’ll most likely say something like it’s “immeasurable” or “priceless.” Now try asking how much life insurance that person needs to protect their “priceless” asset, and don’t be surprised if your question is met by a blank stare.
Americans realize that their lives are worth a lot, especially when there are people who depend on them financially. In opinion surveys, they usually acknowledge that life insurance is something that the vast majority of people need. But when it comes to owning life insurance, most adult Americans are either underinsured or have no life insurance at all.
If our clients knew how vital life insurance was to their financial plan, then I believe everyone would be insured, most to their full capacity. Insuring your largest asset (yourself) should be a common practice and one of the first things advisors do when working with a client. I have had experiences where a client dies and I’ve delivered the check to the beneficiary. This is the most rewarding and hardest part of the job. If you haven’t done this I encourage you to visit the nonprofit organization Life’s web site www.lifehappens.org and click the “realLIFEstories” tab. After watching those videos your views on life insurance and the benefits they provide will forever be changed.
When dealing with the affluent, or those who would need life insurance to protect their family’s accustomed lifestyle should the unthinkable happen, there are four recurring objections. What follows is a list of these four objections, and what I’ve learned to say to help these families understand the importance of life insurance and making the decision to protect their loved ones for years to come.
“I cannot afford it.” I respond to this statement with a quote. “You cannot afford not to have it.” Most have a hard time paying on something that isn’t tangible. If you look around, these people have really nice cars, beautiful home(s), expensive jewelry and every toy you can possibly imagine. “Why pay for expensive life insurance? I cannot afford that payment. I could go on a lavish vacation or lease another exotic car for the price of that premium.” Ask this question, if something happened to you, who would pay for all your toys? Who would help ensure your family could maintain their lifestyle? Educating the client on the benefit versus the cost is a very important process. It took me a few years to really master this one and now I find it most impactful to use real life examples. For instance, “You do very well income-wise, and have nice savings and belongings, but if something happened to you, who is going to pay for your children’s private school tuition? What piece of land or what percentage of your company is your family going to sell to pay the estate taxes?”