How to Help Prospects 'Get' Life Insurance

A confused-looking little boy (Photo: Thinkstock)

Here's an article to help you get in the right frame of mind for Life Insurance Awareness Month.

For many people who write life insurance, the task is not that easy. The way I see it, we're up against at least four big obstacles:

People would prefer not to think about their own demise. They push the need to purchase coverage to the side.
Prospects and professionals are in somewhat of an adversarial relationship, in that prospects have a sense that commissions are paid to the advisor and, therefore, bias exists in whatever recommendations are made.
Prospects may believe they have no bragging rights when they buy insurance, and therefore choose to spend their dollars in ways other than buying the protection we feel they need.
Life insurance is a somewhat mysterious product with many names, makers, and horror stories connected to it, so, it's easier to avoid buying it.

Oftentimes, when I first meet life insurance prospects, they have little or no idea about what the product they want; the face amount; or the term they want their coverage to provide for.

Suffice to say, it also means those prospects have little or no understanding of the riders we can

offer, such as LTC or critical illness, and they probably don't know the difference between indexed universal life and 10-year term life. That's why they need us.

When I start with a new prospect that does not know much about life insurance, I say, "The type and amount of insurance you purchase depends on the job you want it to do." Guaranteed this produces a deer in the headlights look.

I let this simmer for a minute, and then I follow with, "Let's say you had a 10-room house, and you wanted to install air conditioning. You might consider things like… the square footage of the house; how well insulated the house was; how cold you wanted the house to get (under the hottest circumstances); how many features the air conditioner you were considering purchasing offered; how long you wanted the AC unit to last before you had problems with it; and… How much you could afford to put into the purchase of the machine.

"Well, purchasing insurance (especially life insurance) is a lot like buying the AC. If done properly, there are many items to consider, because, at the end of the day, your circumstances are different than the circumstances of the person who lives at the end of your block. The purchase of life insurance requires a strategy, and that is what I am here to help you develop."

Generally, the deer headlight look diminishes. The prospect's eyes start to focus on me.

This little side step has helped me to engage many "newbie" prospects by moving the conversation from something mysterious (life insurance) to something more familiar ( the prospect's home).

By saying that I am here to help the prospects develop a strategy, the plan becomes theirs, not mine, and takes on new meaning for them.

There should be some rationale to the amount of insurance and time period of coverage a prospect purchases.

A shrug of the shoulders, or an answer like, "Well, that's what they guy said I needed" won't do the job under two circumstances: 1. If the beneficiaries need to collect on a claim or, 2. If the prospect is suddenly diagnosed with a life-threatening illness, and the prospect's chances of qualifying for new life insurance have now become zero.

Our job as agents is to design plans that provide the best protection for the people we work with.

— Read The Love Letter Strategy, on ThinkAdvisor.

Jerry Cohen is a broker in the life, health and Medicare supplement insurance markets. His office is in Port Jefferson Station, New York.