As a financial professional, you know how important life insurance is for your clients. It helps protect their loved ones and can leave a legacy after they are gone. However, having that conversation with clients is often easier said than done. Discussing life insurance is often difficult and uncomfortable for clients, which can leave them unprotected.
One approach to starting a conversation is to talk about your client's financial goals and frame life insurance's potential benefits as a way to help achieve them. Leading with empathy and understanding can help them see just how important life insurance may be for their needs. Here are a few places to start.
One of the biggest motivators for any client to get life insurance is to help protect their family. While they may understand that, in general, it could help to run the numbers — keeping common objections and excuses in mind. For example, you may ask them to envision their family's finances without their salary.
Then, go through their finances with them. Show how their loved ones may face financial struggles paying the mortgage, keeping up with their current lifestyle or covering bills without a death benefit. And highlight how the cost of coverage is probably less than they think.
Many people care about the legacy they leave behind to their families or causes close to their hearts. However, your clients may not understand that with a life insurance policy, they could leave their families with the potential to start building for their futures or creating the start of generational wealth.
Speak with your clients to learn if they've considered how their life insurance death benefit may leave their families with funds to help them pay down debt, start a business or buy a new home. Or, ask them if they have a cause or organization they'd love to name as a beneficiary after they've passed away.
Few people are ever thrilled at the idea of paying more taxes. As a result, letting your clients know about the potential tax benefits of life insurance may catch their attention. How life insurance impacts taxes may be a frequently asked question from clients, so having a quick explainer on hand can help communicate some of the potential advantages.
Show your clients how their death benefit can help cover possible estate taxes and how their beneficiaries typically won't have to pay taxes on those funds. Help them see how those tax benefits may help their loved ones use that death benefit to fund activities and adventures.
For many clients, retirement plans are probably top of mind much of the time. However, for as much solid planning as you can do together, there may come a time when the unexpected hits — medical bills or the need to cover a significant expense.
Talk to your clients about the potential of these situations and gauge their comfort level and risk tolerance. Then discuss how some life insurance policies may help provide them with extra income in retirement, which could help reduce potential longevity risk and play a role in their long-term income strategy.
If you have clients who are business owners, it's a good idea to have an in-depth conversation with them about their plans for the business after they pass. For example, ask if they plan to keep it in the family, want to sell it to a partner or have a business continuation plan.
This discussion is a good time to highlight how, just like with their loved ones, life insurance can help protect their business, co-owners and employees by keeping things running after they pass.
Talking about death is uncomfortable, but the reality is planning for it is an essential part of financial and estate preparation. So, it's crucial to find a way to have this conversation with your clients.
By learning about some of their questions, hopes and fears, you can start educating them about life insurance and how it may fit into their financial future.
Are your clients still unsure about why they need life insurance? Learn more about how to help clients understand the need for life insurance at any age.
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