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Help Your Clients Make 2022 a Year of Decisions

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What You Need to Know

  • Clients should save more, protect more and plan more.
  • They get stuck in the fog.
  • One way to cut through the fog: Thoughts about loved ones.

Good news: More clients than ever are having the right financial planning conversations with their loved ones.

Surprised to hear this? We were too. While conventional wisdom (and an abundance of data) has historically told us that individuals find talking about money and financial planning to be taboo — times are clearly changing.

Whether because of the impact of COVID-19, efforts to empower a younger generation of savers or something else entirely, a recent study by Haven Life found that 39% of individuals have had a conversation about necessary insurance or financial planning needs (either for themselves or a loved one) within the past three months.

When one looks further out, 58% of individuals have had insurance and financial planning conversations in the past six months.

But, where there is good news, there is often…well, less good news. Life insurance is no exception. While more people are having these types of conversations, there is still a lack of follow through.

Consider that the same Haven Life study found that just 8% of individuals said they are “very likely” to act on any financial planning conversations had over the holidays (a historically popular time to have these conversations) and just 27% said they are “likely.” That’s a total of only 35% reporting to take any action.

Understanding the Root Causes of Client Inaction

For advisors, it’s probably not that uncommon to have several conversations on a topic or recommendation with a client, only for that client to either stall or decline to take said advice.

While every client has the ultimate authority over their financial portfolios and what investments and decisions to make, understanding the root cause behind why a client does or does not want to take a specific action can be helpful for advisors.

When it comes to life insurance, the explanation is often quite simple. Historically, applying for life insurance has been a painful process for clients. From a paper-based application that often asked redundant questions and the need for a medical exam (even for the healthiest of individuals) to a months-long waiting period, buying life insurance simply wasn’t an enjoyable process. If a client could put it off, why wouldn’t they?

Another overlooked, but just as critical, life insurance buying deterrent has to do with information overload. It might seem counter-intuitive, but as clients have become more financially informed — thanks to efforts to democratize access to information from financial services companies, reporters, influencers and everyone in-between — an overload of information has led to analysis paralysis. As the saying goes, no good deed goes unpunished.

Empowering Clients to Take Action

With an understanding of what’s causing clients to drag their life insurance feet, advisors can help turn related financial planning talk into action in 2022. After all, many clients don’t just want life insurance — they need it.

According to LIMRA’s 2020 Insurance Barometer Study, the insurance “needs gap” (meaning the difference between people who need life insurance and those who have it) is growing, with an active market demand of 41 million consumers.

Here’s how advisors can help ensure clients turn financial planning conversations into life insurance action in the new year:

Encourage clients to set aside one hour in the first quarter of 2022 to review their options. Many clients will be surprised to learn that an hour is more than enough time, especially as some digitally enabled life insurance policies can be purchased online instantly (and often without the need for a medical exam).

Make life insurance part of career planning conversations. With many clients partaking in “the Great Resignation” and others pursuing new opportunities as part of a competitive job market, understanding what life insurance benefits are tied to their current employer is critical.

For those looking to make a job switch, an individual portable policy can give them peace of mind during a time of transition. For those who plan to remain with their current employer, an individual policy can help supplement employer-sponsored coverage, which often does not provide sufficient levels of protection.

Focus on family. After all, life insurance requires the policyholder to name a beneficiary. Reminding a client that they are doing this to provide financial security for their loved ones is a powerful way to move clients to action.


Wade SewardWade Seward is head of distribution strategy at Haven Life.