Strategies & Tips To Celebrate Life Insurance Year Round
by: Robert Mittel, Tim Sease
It’s September, the time of year all financial advisors look forward to — not because of changing leaves or pumpkin spice lattes, but because it’s Life Insurance Awareness Month. Every September, advisors focus their energy on sharing why their clients need protection. Then, October 1 comes around, and we wait 11 months before once again focusing on this important aspect of advising. I may be exaggerating a bit — but just a bit.
Historically, this September-only focus made some sense. Past studies showed that life insurance revenue, as a percent of total brokerage in a financial institution, was about 2-3% on average, with most of this derived from single-premium life insurance.
However, the pandemic has heightened consumer awareness and demand for life insurance protection, pushing total life insurance new annualized premium growth to 20% in 2021, the highest annual growth since 1983, according to LIMRA’s Fourth Quarter U.S. Retail Life Insurance Sales Survey. Some studies show that younger people in particular are purchasing life insurance at higher rates than before.
This new data suggests advisors should be “celebrating” Life Insurance Awareness Month (LIAM) year round!
So, how can we capitalize on the improved understanding of the value of life insurance, meet clients’ needs and use LIAM as a springboard to move the industry ahead?
4 Strategies Advisors Can Implement Beyond Life Insurance Awareness Month
If you want to capitalize on the increased interest in purchasing life insurance — in September and beyond — you can get started with just a few simple strategies.
1. Change the Language
Try asking every client you speak with, whether at a branch or via phone or Zoom, “Can I review your current protection plan?”
Protection plan, you ask? Yes — words matter! No one really wants to talk about “life insurance,” so let’s call it what it actually is: Protection against life-altering events we all know can happen without warning.
How simple is that quick addition to your client conversations? Try it out this month and see what happens. Chances are, that tweak in phrasing will cause clients to bring you their old life insurance policies. Then, as every good advisor can, you’ll have the opportunity to determine, based on your clients’ overall portfolios, whether their current policies still meet their needs — or whether they can be enhanced.
2. Realize That Protection Programs Help Fulfill Client Core Needs
Have you listened in to any of the BISA Industry Trend Watch Podcasts? If so, you’ll be familiar with the six core needs that all financial advising clients have: liquidity, credit, income now, income later, protection and legacy.
Advisors can make a strong case that four of these plead for a protection need. Besides life protection (of course), the other three are:
- Credit or mortgage protection — who will pay any debt once the client is no longer with us?
- Income protection — being able to use life insurance or disability insurance if working is no longer an option.
- Legacy — discussing wealth transfer is something we have excelled at in our industry, and we are making progress using the simple-issue products on the market today.
3. Ask Discovery Questions
While you’re speaking to clients, you can also ask additional protection-related discovery questions. Try these out this September:
- Could you share with me what it means to you to take care of your loved ones? Do you want a means for them to have their current monthly bills taken care of?
- How much life and long-term care insurance do you own?
- When was the last time your policies were reviewed?
- Do you have children? Are they college aged? Do you have a plan to help them finance their education?
- Do you care for elderly parents? What will happen if you couldn’t continue to care for them?
Each one of these questions is a great way to begin a protection conversation and may lead to even more insurance-related follow-up questions.
4. Remember — Financial Planning Includes Protection
Even if protection is not in a client’s financial plan, they almost always already have an investment plan. Don’t commit financial malpractice, add protection. Let’s live the grow and protect mantra. Every financial planning software solution on the market has a very underutilized protection needs component. Let’s try for 50% usage in September.
Tim Sease, CFP®, ChFC, managing director at SouthState Investment Services, shared that “studies continue to suggest that there is a life insurance gap in America, where most households simply do not have enough life insurance. When we think about our own household and family, many of these same concerns have been brought to the forefront. Certainly the pandemic has created an even more compelling reason and urgency to address potential gaps in coverage.”
“Whether it be legacy planning, estate planning, or succession planning, we’ve seen a tremendous opportunity, when appropriate, to help clients address the life insurance gap. Advisors in many cases find themselves addressing life insurance needs as part of a holistic financial planning dialogue coupled with a more robust life insurance review,” shared Sease.
Improve Protection-based Programs With These Best Practices
Do you want your protection initiative to lead the industry in best practices?
Be your clients’ trusted advisor. That means you meet all their needs by asking the right discovery questions and they have no need to look elsewhere for solutions which could the relationship at risk.
Getting to know the family of your client ensures a multi-generational relationship as well. You don’t want to have any risk that the relationship will move when your lead clients pass on.
What small goals have you set that will help you achieve this bigger goal? Ensure you plan out daily, weekly, monthly, and annual goals. These could be activity-based — for example, you could create a daily goal of talking to x number of customers about protection.
In order to accomplish this, arm your advisors with the discovery questions listed earlier in this article, or come up with your own.
Another way to improve your company’s protection initiative is to evaluate your own practices:
- When was the last time you reviewed your insurance compensation plan? Does it properly relate to the effort you or your team spends on a sale?
- What about your product menu? Do you have one list of all your product options, and is it readily available to your advisors?
- When was the last time you reviewed with your product partners their product menu? What about your Long-Term Care (LTC) offerings? Yes, we know its LIAM, but why not review all your protection solutions at once? Many clients shun LTC, saying they will self-insure, but do they really know what that means? Are they ready to pull up to $150,000 per person out of their assets if they need to go into a rehab facility, assisted living home, or need home health care assistance? A LTC policy can very affordably mitigate that risk.
Using available technology can also help you ensure your company and/or advisors are following best practices. Technology has been embraced by the carriers, as they have heard loud and clear from distribution that the process needs to be improved. This means just about every carrier on the market has products available that streamline, fast track or instant issue life insurance up to amounts as high as $2 million. That is far above the $100,000 instant term policies of the past. This streamlined underwriting means many policies no longer have the “convenience factor” premium attached to them.
All considered, it might be a great time to call your product providers to ask for a refresh of their capabilities.
Sease shared that “there are multiple avenues to buy life insurance. We have certainly embraced technology to drive efficiency in the process, but we look at it as an omni-channel approach. In some of the more complex cases, we fully support the use of a locally based financial advisor to facilitate the conversation as part of a comprehensive financial plan.”
Let’s Move the Life Insurance Needle Beyond September
Demand for life insurance is higher than ever. Applying the strategies and best practices highlighted above will help financial advisors make the most of this demand.
- Ensure every financial plan has protection of assets covered
- Ask all clients discovery questions
- Review policies — both yours and your clients
If you take these ideas and run with them, you’ll make a difference — both in your clients’ lives and in your bottom line.
It’s time to embrace protection and truly grow and protect your clients’ assets.