How do you sell something that 84 percent of Americans say they need, but only 59 percent want?
‚ÄúThe reason why many people don‚Äôt like to think about life insurance is because they see it as only a death benefit and most people prefer not to think about their own mortality,‚ÄĚ said Bill Stevens, a senior vice president for Foresters Financial Services.
Life insurance: when you die, you win. Now that is a tough sell. Nobody wants to think about their death. So how do you talk about something people really should have?
‚ÄúYou talk about why the prospect should want it,‚ÄĚ says Stevens, who leads a team that hires, trains, and develops advisors for Foresters Financial. ‚ÄúPeople have problems, so offer solutions that gets them what they want.‚ÄĚ
Stevens cited LIMRA research that one out of three households would have financial difficulty within one month of a primary wage earner passing. Despite 59 percent of consumers have some type of coverage (individual or group), about 1 in 5 of those owners realize they don‚Äôt have enough.
More people are willing to insure their car and their home than their life.
‚ÄúThe number one reason consumers gave for not owning any or more coverage was cost, with two out of three consumers saying life insurance was too expensive,‚ÄĚ says Stevens. ‚ÄúCost becomes an issue in the absence of value. Additionally, LIMRA research shows that consumers tend to overestimate the cost of life insurance. Almost half of millennials overestimate the cost of life insurance by five times the actual amount.‚ÄĚ
Here is the main takeaway. If you deliver a service that people don‚Äôt want to talk about, you have to discuss the benefits they do want to talk about. To get people thinking past just death benefit, Stevens shares with his advisors these reasons for owning life insurance:
Human Life Value: ‚ÄúAs a breadwinner, your family counts on your income. The money from a life insurance policy can help your family keep its standard of living. It also can take care of things like mortgage balances and final expenses like credit card balances, funeral and other bills.‚ÄĚ
Retirement: ‚ÄúWhen you might need income the most, your life insurance policy can be a source of supplemental income through its cash value.‚ÄĚ
Charitable giving: ‚ÄúDid you know you can donate your life insurance policy to your favorite charity, or donate another appreciated asset and use the life insurance to replace that assets value in your estate in a more tax advantages way? Either way this gift can be a charitable deduction on your taxes.‚ÄĚ
Taxes: ‚ÄúThe death benefit is income tax free and the cash value grows tax deferred and be taken out tax free through the use of loans.‚ÄĚ
Estate planning: ‚ÄúOwe estate taxes? Life insurance can be set up in a trust to handle those costs.‚ÄĚ
Creditor Protection: ‚ÄúIn most states the values within your life insurance policy are protected against creditors. Check the rules in the state where you live.‚ÄĚ
Riders: ‚ÄúMany policies have riders that also allow for other living benefits like disability coverage to pay premiums; chronic, critical illness or long-term care coverage in the way of accelerating the death benefit; and much more.‚ÄĚ
If you are curious where the name Foresters came from, here is the back story. In the middle ages if you lived in a town you were townsfolk, if you lived in a village you were a villager, and if you lived in the rural forests you were a forester. The original foresters groups allegedly banded together for mutual aid and protection in 14th-century England, in or near the ancient forests that belonged to the royal family.
Today Foresters Financial is an international financial services provider with more than three million clients and members in Canada, the United States and the United Kingdom that operates on a not-for-profit basis. (I learned about the organization when I was an employee and member in the 1990s).
Foresters Financial began in North America in 1874 when the group set out to provide access to life insurance for average working families. One of its first leaders, Dr. Oronhyatekha, was one of Canada‚Äôs first Native doctors to include western medicine in his practice. A man ahead of his time, Dr. Oronhyatekha championed the rights of women, children and minorities. He also insisted on admitting women as full members of the organization and providing benefits to the orphans of Foresters members.