As many of you know, you can encounter any number of roadblocks when you are meeting with a new client to talk about life insurance. In my 20 years of experience, I have learned a few techniques to keep this process as simple as possible. In this way, I’m not only able to help clients find the path to financial security, but also to use term life insurance to develop lasting relationships.
I position myself as a financial professional, not a life insurance salesperson. I make term insurance part of my “yellow notepad conversation,” which is the initial meeting with a client to review his or her entire financial picture.
I tell clients if they can give me 20 to 30 minutes, I can give them an idea or two to help improve their financial position down the road. Term insurance is one of several items we address during this meeting. Other topics include retirement and 401(k) planning, disability income insurance, health insurance, college funding and estate planning. From that list, we create a to-do list, an action plan. Life insurance often bubbles up as the most actionable item on the notepad.
From there, I often encounter these three common roadblocks.
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Roadblock #1: Most people have a natural predisposition against discussing death. No one wants to discuss it; so ultimately, they avoid making decisions about life insurance.
Solution: Sometimes it takes the death of a friend or family member for a client to fully comprehend the importance of life insurance. If you get the conversation started, many will see the value.
Roadblock #2: I have found clients often question what the face amount of a term policy should be and use that as an excuse to delay making a decision.
Solution: I try to overcome this obstacle by keeping it simple and explaining how the face amount should be enough to protect the client’s life and business and can also be used as collateral for loans. I also either tie the face amount of the policy to the client’s debt or explain that if the primary breadwinner should die and that income stream is gone, how a lump sum of capital can replace that income.
At 5 percent a year, $1 million of death benefit generates $50,000. So replacing $100,000 of income requires $2 million of death benefit. Most people can get their heads around that cost discussion.