What You Need to Know
- Many consumers have no idea how to buy life insurance.
- Some financial advisors and planners think selling coverage is hard.
- The new simplified issue underwriting systems can make the process easier for the advisors as well as for the consumers.
When posed with the question of whether to buy life insurance, a reported 31% of Americans in a recent study said they were more likely to seek out a life policy because of the COVID-19 pandemic. This LIMRA data shows that even a year after the pandemic’s onset, people’s heightened awareness around their mortality was still high — and it may very likely stay that way, as the pandemic shifted most everyone’s perceptions in one way or another.
And yet, 48% of Americans are still uninsured. What’s more, of those that are uninsured, 65% say that they don’t have insurance mainly because they don’t understand how to enroll in a plan, or know what type of insurance policy they need. They find the process overwhelming and burdensome.
Advisors Say the Same
Many financial advisors and planners also fall for this misconception: that incorporating life insurance into your service offering is too much of a hassle.
Here’s where we see the massive knowledge gap in what I like to call life insurance literacy. As an advisor, you probably hear (or use) the term “financial literacy” just about every day, and you’re likely as“literate” as a person comes. But where would you say you fall on the life insurance literacy scale?
If your aptitude toward life insurance is on the lower end, that’s OK — you’re certainly not alone. But there’s no time like the present to start expanding your offering and adding more value to your clients in areas that will matter most to them at the end of the day.
If you have a client who owns a business, has financial dependents, or is seeking out more methods of tax-deferred savings, it’s essential they have a solid life insurance plan in place. The latter reason is particularly timely, given the 2020 Taxpayer Certainty and Disaster Tax Relief Act’s ability to bolster life insurance policy savings. Essentially, the law enables people to accumulate cash value through life policies while sidestepping taxes on any gains.
How to Better Evolve
So we’ve established the demand and the entry point for financial advisors. But how do you go about actually incorporating a life policy offering into your client service wheelhouse?