Editor's Note: The following is an excerpt from "Are You Ignoring the Market Most in Need of Your Help?" in the December issue of Life Insurance Selling.
Q. In the difficult economic environment that the United States has been living through during the past several years, money is definitely tight in the middle market. How do you approach the conversation about the need for life insurance when you know that you’re more than likely talking to someone who has very real and very valid concerns about any and all additional family expenses?
Guy E. Baker, MSFS, CLU, founder of BTA Advisory Group, Irvine, Calif.: The best approach is to acknowledge these are tough times and maintaining a fiscally sound budget is of the highest priority. “However,” I might say, “Mr. Prospect, if it is this difficult for you to deal with these issues, with all the experience and ability you have, what would it be like for your family if you weren’t able to help them? What if you didn’t come home tonight because of a fatal car accident? Or you bumped your head and suffered a stroke? What then? For just a few dollars a month, you can guarantee your family would be able to survive these tough times, whether you were able to provide for them or not.”
Death and disability are a reality. Stuff happens. We did not cause the problems. But we can sure solve them. We have to remember why we do what we do. We may be their last advocate. No one can guarantee they will be able to bring home a paycheck next week. But we can guarantee that if they can’t, because of illness or death, we will deliver on the promises.
Richard F. O’Boyle, Jr., LUTCF, M.B.A., life and health insurance agent, Islip, N.Y. : Many of my clients in the middle market have seen friends, family members or even themselves lose their jobs. The economic uncertainty over the past few years has driven many of my clients to look for a sense of security. I work closely with my clients to better understand their budgets and, therefore, find the cash flow to cover the life insurance premiums, which in most cases for new policies is a 15-year or 20-year term plan. I also find a strong level of interest in disability income coverage, although sales of these policies is limited by pricing and transparency concerns.
Marc A. Silverman, M.B.A., ChFC, CFP, founder of Silverman Financial, Miami: I approach middle-market clients with life insurance opportunities by discussing their needs and what they are trying to accomplish for their family. Although they may not have as much money as wealthier clients, they still have a need to provide family protection in the event of their demise, and maybe even more so than the very wealthy. Although the recommendation may not be permanent insurance, having some term insurance may be a viable solution. I never heard a widow ask what type of insurance she was receiving when her husband passed away. It was, “How much money am I going to ultimately receive?” This is obviously accomplished by conducting an analysis to determine exactly what is needed.
Q. What do you find to be the biggest concern on the minds of middle-market prospects, and how do you approach them about potential insurance needs in light of those concerns?
O’Boyle: When discussing insurance planning with a middle-market prospect, I find an intense concern for reliability and stability. That usually leads to questions about my career and the companies I represent. Pricing always follows, but I find that a slightly higher premium for a much better company is not a major issue. We often discuss third-party company ratings and current news. I present myself as “the conservative guy,” as opposed to the aggressive investment advisor — even though I am properly licensed to sell mutual funds and variable products. I place life insurance in the context of other financial assets, such as retirement plans and other savings vehicles.
Silverman: The biggest concern of most middle-market clients and prospects is eliminating credit card debt and ensuring they have enough money to ultimately retire at a reasonable time in the future. This can be approached by performing a complete fact-find to learn what is top of mind, and provide life insurance — permanent or term — solutions that can be employed in the event of their passing.
Baker: Most of our prospects and clients are concerned about their investments and whether they are going to be able to accumulate enough money for retirement. I have learned through the years their concerns are far more important than mine. So if they are worried about saving money and keeping it safe, then I need to be able to discuss measures they can take that will help set their minds at ease. Buying life insurance can be an afterthought for them — something they deal with after they have found peace of mind.
Our job is to help our clients find peace of mind. We do this through listening to their concerns and helping them think through the steps they need to take to achieve their goals. If we focus on our needs and goals, we will fail. We have to set those aside and focus only on what is important to them.
Charles K. Hirsch, CLU, is a contributing editor to Life Insurance Selling. He is the president of Hirsch Communications Consulting LLC, in Florissant, Mo.