In my last post of 2012, I gave my opinion on what it will take to succeed in our business this year and into the future. I explained how tough this economic environment has been on our industry, financial professionals and, most importantly, consumers. But, I want to reiterate there is promise — if you are willing to put in the work.
Truth is, this is an era of unique opportunity in our industry. At no point in history have Americans been this underinsured. Our opportunity lies in helping clients adopt a protection philosophy that focuses first on protecting wealth. Coming out of the economic downturn, clients are more focused on the need to protect their assets from catastrophic losses, more so than they are interested in accumulating riches or assets to recover from a lost decade of investing. Furthermore, they are much more acutely aware of the risks associated with building wealth.
Ultimately, your clients should recognize the importance of protecting their family’s future financial interest and the vital role that life insurance can play. If they don’t, well, here’s where you have a tough job to do.
A good place to start your pitch is around the concepts of maximum protection and economic life value. When producers present these concepts to their clients, they’re encouraging them to adopt a protection-oriented wealth building strategy. That’s not traditionally as flashy as the systems or products that may have the potential for higher returns, but I think it’s what today’s consumer not only needs, but wants.
As I have warned before, this isn’t easy. It takes heavy mental lifting — by you and your client. It involves helping clients understand that protecting wealth and addressing life’s eroding factors (such as taxes, disability, catastrophic losses, death, low interest rates and stock market volatility) are more important than growing more wealth. This could be a mind-shift for them, frankly, as it is for our industry. But what will work in our favor is that clients will understand now more than ever that they can’t control the wealth-building risks associated with the market. They will be more attracted to safety.
The maximum protection concept is easier to explain if you use a familiar analogy with your clients such as car insurance. Use the analogy of a car accident, and explain to clients how most insurance companies will repair the vehicle or completely replace it — known as full replacement. It’s this tangible, full-replacement value analogy that will get clients thinking about their own full-replacement value.