Positioning life insurance in a holistic financial plan

We like to pretend we’re going to live forever. Most of us would rather do just about anything than think deeply about our own death. This is why it is particularly difficult to position life insurance with customers.

Nobody wants to think about their own mortality. But the reality is that we all die at some point, and most of us want our loved ones to be well taken care of when the time comes. That’s why selling life insurance is an essential part of overall financial planning.

Selling life insurance is a very personal business – you discuss sensitive and painful matters.

When positioning life insurance for your clients, focus on the beneficiaries. People primarily buy life insurance to cover end-of-life expenses and to care for surviving family members.

Why a Plan Isn’t Holistic Without Life Insurance

The action plan process is the foundation of holistic financial planning and everything we do at C2P Enterprises, including life insurance.

Most insurance marketing organizations (IMOs) focus on the gross production and sales of their agents and advisors. But we focus on customer solutions that are in their best interest. We mitigate risk for clients by helping advisors integrate our best interest approach into case design, product selection and implementation of insurance solutions as financial planning tools.

Clarity Insurance Marketing is a best-interests driven insurance marketing organization that facilitates the selection, selection and support of award-winning products for all fixed insurance product lines, such as fixed and indexed annuities, single premium and traditional life insurance and long term care product assets.

Clarity Insurance Marketing works with holistic advisors committed to representing the best interests of the client. As such, almost all affiliated advisory practices have either a Registered Investment Adviser (RIA), an Investment Adviser Representative (IAR) or a Registered Dealer Representative in their office to help represent the insurance life as part of a holistic financial planning solution. . We mitigate risk for American institutions, advisors and families nationwide.

To better understand their needs, guide each client through the risk pyramid, discern their volatility tolerance and measure their tax bracket.

It is essential that you keep up to date with the rapid and constant changes in the life insurance industry. Study your customers. Try to understand their challenges and goals, so you can find a product that fits their needs. Once you know what the customer wants from a life insurance policy, you can offer them products to help them achieve their goals.

Structure the life insurance conversation with your client

Selling life insurance to a 20 year old is very different from selling life insurance to a 60 year old. But no matter who you work with, you should be able to ask questions like,

If you died tomorrow, would your family be able to pay their bills and continue their current lifestyle?

Communications with clients of financial advisors should begin by educating them on the difference between term life insurance and permanent life insurance, including the pros and cons of each.

Term life insurance is one of the most popular types due to its simplicity and low premiums. These policies are ideal for young, healthy clients who can get reasonable rates and use the savings to invest in other securities, but only pay out if the policyholder dies during the policy period.

For example, term life insurance is best for people between the ages of 25 and 45. They usually go through life events like buying a house, getting married, growing a family, or saving for college. They generally have lower net worth than older age groups and higher debt-to-income ratios.

“The term is like renting an apartment. Permanent is like buying a house. When you rent an apartment, you don’t build any equity, but it’s usually less expensive. When you buy a home, you’re going to pay more, but you get equity in return. With term life insurance, you have a liability, but no assets to show for it. –Dave Alison, CFP®, EA, BPC

Schedule a free call to learn more about The Bucket Plan Process and positioning life insurance for your holistic financial planning clients.

Originally posted on C2P Enterprises.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.