Life Insurance & Income Protection 

Most Americans don’t have enough life insurance coverage. Many don’t have any at all. Competing financial priorities, misconceptions about the costs and not understanding how life insurance works are all contributing factors. 

Do it for your family and home

Protecting the home and family are often the key drivers behind a life insurance purchase. It provides financial protection for surviving loved ones. This could mean making sure there’s enough coverage to cover household needs or pay off the mortgage. If the deceased parent’s income was also the funding source for college savings, replacing this should be considered, as well.

Even a parent who’s not the family breadwinner should consider life insurance. Replacing the care a stay-at-home parent provides can be expensive, and life insurance can be a source of these funds if the unexpected happens.

Your work coverage is likely insufficient

Group life insurance that’s offered through an employer is a convenient way to get important coverage. For many, it’s the first step in protecting loved ones from the unexpected. However, employees don’t always have the ability to select the level of coverage with a group policy. If there is a coverage gap, then you may need to suggest supplementing their group insurance with a private plan.

A common rule of thumb is that life insurance should provide seven to ten times the insureds persons annual salary. That’s just a starting point. Help your clients look at a variety of factors, including income, assets, liabilities and plans for the future, such as for having additional children, or for retirement.

Coverage isn’t as expensive as you think

Overcoming this objection may be as simple as determining the needed coverage and running an illustration. In fact, premiums for life insurance are typically lower than other forms of insurance and are often less expensive than monthly bills for cable or cell phone.

Life insurance only seems complicated

Like just about any financial product, life insurance comes with some jargon. Explaining the types of insurance and how they work may help make your clients decision easier:

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• With term insurance, you are covered for a set amount of time. After your term ends, you are no longer covered.

• Permanent life insurance is meant to cover your entire life. As long as you continue to pay the required premiums, you have coverage.

If you wait, it will cost you

Remind your clients that while it’s easy to put off buying life insurance, the longer they wait, the more they’ll spend. The older they are, the more expensive the premiums. And it is unlikely that a person would be healthier at age 40, 50 or 60 than they were at age 30.