How to talk to teens and adult children about life insurance

The more advisors encourage clients to talk to their children about all financial matters, the less taboo these issues become.

By Diana Angelini

Life insurance can be a powerful tool in a family’s greater financial picture. But a conversation about life insurance can be difficult to begin for financial professionals and parents alike: No one likes to talk about death, after all.

Depending on a family’s financial situation, their communication style and the age of the children, it can be well worth any awkwardness to talk openly about life insurance. This conversation can be a necessary and important one, as life insurance can greatly affect a family’s ability to stay afloat should one parent die unexpectedly.

By broaching the topic of educating a client’s family about life insurance, agents can reemphasize their investment in a family’s financial and emotional well-being.

Advising your clients to talk with their kids

Advisors know the value of financial education, as they work the front lines helping families make pivotal decisions every day. This often starts as conversations around saving, then about investing. But some families address the topic of life insurance last — or skip talking about it altogether.

Life insurance is a product financial professionals urge clients to get. But talking about its importance or potential effects often gets pushed to the side in financial conversations due to other priorities or perceived discomfort. Life insurance — and in essence, death — might be an awkward subject for financial professionals to bring up with clients whose trust they are trying to gain. But the reality of having life insurance as a buffer against the harsh economic realities of life without a wage earner is well worth any embarrassment. By being clear yet empathetic in your language and steadfast in your financial facts, you can motivate your clients to pass on the information to their children in the same manner. The more advisors encourage clients to talk to their children about all financial matters, the less scary or taboo these issues become. When these conversations happen early and often, your clients can get comfortable with

What do children understand about death?

Scientists define a child’s understanding of death by looking at three specific aspects:

1. Irreversibility. Once the body is dead, it cannot ever be alive again. Children begin to grasp death’s finality around age 4.

2. Nonfunctionality. A dead body can no longer do things a living body can. Children begin to understand this between ages 5 and 7.

3. Universality. Every living thing dies. Children eventually learn this, although some believe that only old people die.

Source: National Library of Medicine their children about these matters, so if unforeseen life events happen, their family isn’t left with unanswered questions. Consider the ways you can become known as an expert to all members of the families you advise, including any teens and adult children.

Talking to teens and adult children about life insurance

While younger children might be able to handle the concept of death — some say children as young as 4 can understand the permanence of death — it’s teens and adult children who could benefit from frank talk about what life insurance is, how it works and what would happen if a parent died unexpectedly.

One strategy to discuss with your clients is framing life insurance as an act of love, not simply a transaction. By getting life insurance, parents are giving loved ones one less thing to worry about if they unexpectedly die. It might allow their family members to keep their home or go to college without having to take out loans, for example.

Another strategy is to talk about life insurance in the context of family financial transparency. Historically, some families have been closed off about finances until someone dies. At that point, the deceased is unable to answer questions or emotionally care for loved ones, and this can lead to exponential grief, family infighting or unanswered “whys.” By bringing children into the financial conversation at an age when they can understand the implications, you might be able to bring your family closer.

If parents have previously introduced their children to the parents’ financial professionals, children will feel empowered to ask the family’s advisor questions if the unthinkable happens. The process could go much more smoothly than it would if the financial professional were a stranger.

The role of a financial professional is a key one in a family’s financial ecosystem. It goes beyond getting clients the best rate. Advisors can make themselves stand out by educating clients on the products in their financial portfolio and by supporting their clients through the emotional aspect of buying life insurance. This includes how clients can talk to family members about such an effective purchase. A client who understands what they are buying can turn around and pass that knowledge on to their family, providing everyone with the knowledge that their needs will be taken care of in the event of untimely death.

Diana Angelini is the director of the Ladders for Advisors program. She may be contacted at diana.angelini@ innfeedback.com.