LIFE
Individuals who sell life insurance understand the No. 1 challenge is cutting through the confusion and mitigating conflicts of interest...
I Object! When Prospects Balk At Getting Coverage Five common objection scenarios and how to address them. By Brian Greenberg
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s advisors, we strive for a higher standard when recommending life insurance, similar to how we suggest automobile or homeowners insurance: to safeguard against an event that would lead to financial hardship. While auto and homeowners insurance cover expenses in the event of car or home damage, life insurance protects an individual’s financial security. Most people recognize they need life insurance, but few own it. Consider these statistics from the 2021 Insurance Barometer Study: » Almost 1 in 3 consumers surveyed (31%) say they are more likely to buy because of the COVID-19 pandemic. » Slightly more than half (52%) of American adults own some form of life insurance coverage, a decline of 2 points from 2020. Overall, life insurance market penetration is now 11 points below the 2011 high of 63%. 26
InsuranceNewsNet Magazine » May 2022
Individuals who sell life insurance understand the No. 1 challenge is cutting through the confusion and mitigating conflicts of interest when recommending life insurance. In my experience, there are several common reasons that most often prevent people from making a purchase. Here are five common scenarios as well as ways advisors can address those objections.
Scenario 1: I’m already paying for auto and homeowners insurance on top of monthly expenses like my mortgage and utilities. How am I supposed to afford life insurance?
The most common reason clients are reluctant to buy life insurance is because of cost. In many cases, clients believe life insurance is too expensive, they have other financial priorities, or both. Particularly when life insurance competes against less avoidable monthly expenses — such as housing, car payments and food — advisors must explain the importance of life insurance and why it should be a priority. Life insurance is a safety net, making it as vital as auto or homeowners insurance — if not more so. Advisors can appeal to clients who see cost as a significant barrier by emphasizing
term life insurance over universal or permanent life. Compared with universal or permanent life insurance, term or temporary life insurance is on average around 30 times cheaper. In addition to being more popular and affordable, term life insurance can be purchased for a shorter period of time for low monthly premiums. For example, the cost of a 20-year term life insurance policy can be as low as $14 per month for a 30-year-old.
Scenario 2: Why should I trust that your company is any different from the others?
While this may seem harsh, it’s a legitimate question that must be answered. Most people just don’t trust insurance companies. As advisors, we sell a product that nobody likes, few understand and most believe is too expensive. In addition, many of our clients may have had prior negative experiences with insurance companies, such as poor services or unfair treatment on a claim. It’s no easy feat earning customers’ trust. To win over distrustful clients, we must learn who our clients are and why they are buying insurance. This means focusing on establishing meaningful relationships
