Analyze the 'need,' not the 'want'

When I was asked to be a guest columnist, I asked what important topics I should discuss. I was graciously told to just speak from the heart. So that is what I hope to do.

When I entered the life insurance business 37 years ago, I found that as agents, our primary focus was life insurance. We sold it to protect families. We sold it to protect businesses. We sold it to help charities. Most importantly, we sold it.

We might not have been as sophisticated as we are now, but we understood that our mission was to protect our clients in their time of greatest need (death, disability, critical illness and long-term care).

That mission seems to have changed over the years and I'm not so sure that it has always been for the better. Agents have gotten caught up in finding very sophisticated uses for life insurance and in so doing, some of us have forgotten why most consumers buy this magical product.

Life insurance, for me, has always been an expression of love from the insured to his or her heirs. It provides for college educations, living expenses for families, legacies for children and grandchildren. It provides capital for businesses to continue when the owner or other key person is gone. Most importantly, we give every family that we touch dignity in death as well as in life.

So I think we need a call to action. Let us once again remember that we must be dedicated to providing protection as well as other advice for our clients. Let's remember that dignity is achieved in retirement and at death by being able to financially care for yourself and your family. Let's start conversations with our clients about their protection needs and comprehensively analyze what these needs are before we get on to their wants. Let's serve the large middle class in this country and prevent them from financial ruin because of a death or disability.
How do I propose we do this? Hopefully, as we have always done it: One family at a time.

Let's sit down and listen to our clients. Let us not decide before the meeting what the best product is to solve our client's problem before we even know the client's problem. Fortunately, our tools today are so sophisticated that we can make an incredible impact on every person we see. But if we are only pushing our own agenda, our clients will be no better prepared for a recession in the future than they are today. We need to really care about the destiny of the people we serve.

This topic is incredibly timely, as our clients have seen their investment and retirement portfolios halve in value. Their homes have lost value and many have no equity left in their residence. Whether they own a business or work for someone else, everyone is concerned that his or her job or business will be lost. We need to make sure our clients understand the nature of risk and how to deal with it.

I believe we are seeing a greater need for life insurance than ever before. When the Dow was at 14,000 and continually going up, most people thought that their portfolios would take care of all their problems in retirement and would provide their family plenty of income at death. This is no longer the case. As our houses appeared to increase in value, and our clients kept refinancing, thereby reducing their equity, no one rang an alarm. After all, it was real estate and real estate always went up.

What we can do

Unfortunately, the most valuable lessons most of us learn as human beings comes from failure. And failure is what everyone has experienced in some form in this recession. Everyone is shell-shocked. Clients don't want to even look at their statements or find out what their homes might be worth. We are all mentally and emotionally fatigued.

Agents as well as clients are feeling drained and often depressed. What can we do about this situation?

Let's get back to basics. Let's go back to selling the building blocks of a financial plan -- life insurance. No one will buy life insurance unless we actually make the effort to sell it. If we could wrap it in a pretty bow and make it sparkle, we might have an easier time. But that is not the name of the game. We are dedicated to providing a product that no one wants until they can't get it.

When you look at Real Life stories from LIFE, you will see the huge need out there and none of us are doing enough to fill it. There are very few people I meet who candidly own enough life insurance. Protection is the most important thing we can give our clients' families. We sell a magical product that produces money at the time that we cannot personally earn it and when it is needed the most. Who else can do that? Who else would do that? No one.

We have a special mission. We create, accumulate and preserve wealth. No one else has this capacity. More importantly, we deliver this wealth at a time when no one else can, at the death of our client.

Questions reveal the need

If you have a client who decides he only wants to buy investment products, ask him a few simple questions:

1. What is it that you want to leave your family when you die? After all, it is not if you die but when. We must keep reminding our clients that we all die.
2. Do you plan on providing enough money for education?
3. Does your wife earn enough to support the family?
4. Can your spouse stay in your home if there is an untimely death?

No one wants to talk about these harsh realities. If your client refuses to plan, at least convince him to use a band-aid to provide a temporary fix. What do I mean by that? If your client should die and does not want to take the time to plan, then have enough money available at death to be sure everyone he leaves behind will be OK. Life insurance can do that. It can be term insurance if budgets are tight or if the need will change.

Most importantly, it has to be enough. One million dollars used to be a lot of life insurance. It is not today. Let's buy enough insurance so that we not only give people the feeling that they are protected, but also make sure they really do have adequate protection. Young families need millions of dollars of insurance to pay bills. Let's put a large band-aid on the problem. When time and money permits, we can take off the band-aid and address all of the planning needs. But in the interim, this band-aid called life insurance will keep everyone safe.

Lead by example

By the way, before you go out and start selling all of this death benefit to clients, buy some for yourself. I am amazed at the number of agents and planners who have an inadequate life insurance program. You need to become a true believer. If you don't believe in the magic of this product, you will never sell it.

Become your own very best client. I can assure you that I am.

Fran Jacoby, CLU, ChFC is a professional financial planner with Prudential Financial Planning Services in Indianapolis, where she services the insurance and investment needs of her clients on a nationwide level. She has more than 36 years of experience in the financial services industry. Fran is vocal in educating others about financial services and is a highly sought-after public speaker and author. Fran is a member of the Indianapolis Estate Planning Council, NAIFA, Society of Financial Service Professionals, Prudential Elite and MDRT. She serves on the LIFE Board representing MDRT.

Investment advisory services are offered through Prudential Financial Planning Services, a division of Pruco Securities, LLC.