Life insurance can be a delicate topic for clients. It’s not easy to plan for the loss of a loved one, but ensuring financial security is imperative. Plus, marketing life insurance could help increase your agency’s client retention and revenue.
Here are some best practices and guidelines for approaching the sensitive nature of life insurance in a way that’s digestible to potential clients.
Life insurance trends
Insurance is a trillion-dollar industry in the United States, and the life insurance sector is one of its largest components. According to Forbes, life insurance and annuities were responsible for nearly half of the American insurance industry’s net premiums in 2021. Revenues taken in from life insurance premiums are on the rise overall, up by more than 10% from 2020 to 2021.1
A few other life insurance statistics to consider:
- The percentage of Americans with life insurance is about 52%, including individual and workplace life insurance, according to LIMRA.2
- Fewer than one in five adults surveyed by Forbes Advisor are covered by both employer-based life insurance and a personal life insurance policy, with little difference between men and women within this category.2
- Women (22%) are twice as likely as men (11%) to lack life insurance.3
Common misconceptions about life insurance
LIMRA’s annual Life Insurance Barometer Study tracks the perceptions, attitudes and behaviors of adult consumers’ financial behaviors. The analysis identified four widely held misconceptions that keep Americans from achieving the financial security that life insurance can help provide:
- Life insurance is too expensive. More than half of Americans overestimate the cost of life insurance by as much as threefold. This is especially true for younger generations. 44% of Millennials estimate the cost of term life insurance for a healthy 30-year-old to be more than six times higher than it actually is. This misperception about cost, coupled with prioritizing other financial needs, puts families needlessly at risk of financial hardship should a wage earner die unexpectedly.
- My workplace life insurance is enough. 29% of American workers believe the coverage they get through work is enough. The median life insurance coverage offered at the workplace is either a flat sum of $20,000 or one-year’s salary.4 More than half of U.S. households rely on dual incomes (54%),5 and, for many, losing one income could be devastating to the households’ finances. According to the survey, 42% of families would face financial hardship within six months, and 25% would suffer financially within a month.
- It is too difficult to buy life insurance. Nearly half of Americans (46%) say they have put off purchasing the coverage they know they need. This could be, in part, because they are intimidated by the process. The pandemic has accelerated the adoption of simplified underwriting. 48% of consumers say they are more likely to buy life insuring using simplified underwriting.
- I don’t need life insurance until I am older. Younger consumers who do not yet have a spouse/partner or dependents may believe they can put off buying life insurance. In reality, life insurance is significantly less expensive for the young and healthy. Buying a policy can protect their financial future and the financial security of their loved ones.3
Keep these perceptions in mind to stay one step ahead as you market life insurance to your clients or potential clients.
Keys to approaching life insurance marketing
Offering life insurance to clients on a more consistent basis as well as personalizing your approach are both great strategies to grow your book of business as well as your relationships with clients.
It’s clear the opportunity is there, however it’s not always easy to get the conversation going. Here are few tips to proactively bring up life insurance with your clients and create a warm conversation:
Personalization is fundamental
Every client has different goals, financial priorities, and concerns. Therefore, you must tailor your approach to each individual client. iLIFE Financial Management Services recommends experimenting with different marketing strategies to achieve your business goals. You can also use a CRM tool to compare different insurance policies and their coverage limits to give your clients a clear picture.6
Take the time to listen to your client’s needs, understand their financial situation, and offer a customized solution that meets their unique needs. By personalizing your approach, you can build trust with your clients and establish a long-term relationship.
Understand that everyone’s financial priorities are different
Every client has unique financial priorities. Some may be more focused on long-term investments, while others may be more concerned about immediate expenses. Some clients may have specific financial goals, such as paying off their mortgage or saving for their children’s education.
That’s why it’s important to be transparent about cost and explain that life insurance is an investment, not just an expense. According to AgencyBloc, more than half of Americans think life insurance is three times more expensive than it actually is. Millennials, in particular, overestimate the cost of life insurance by more than six times its actual cost.7 Addressing cost misconceptions is key to protecting clients and potentially growing your business.
Looking for tips on connecting with specific diverse markets? Check out the recent Agency Forward articles below:
Black consumers: a growing, strong opportunity
LGBTQ+ consumers: a business growth opportunity
Connecting with Hispanic customers during Financial Literacy Month
Help clients understand which life insurance policy to buy
Choosing the right life insurance policy can be a daunting task for many clients. As an insurance agent, it is your responsibility to help your clients understand the different types of policies available and which one best suits their needs.
Take the time to explain the benefits of term life insurance versus whole life insurance, and the advantages of a policy with riders that can be added on to meet specific needs. By educating your clients on the different types of policies, you can help them make informed decisions and find the policy that provides the best coverage for their unique needs.
Find more resources for selling life here, including a client resource guide and 6 tips to cross-selling life insurance.
Check out all of Nationwide’s investing and retirement client resources.
Use insurance technology to your advantage
Insurance technology has revolutionized the way agents approach marketing and sales. By leveraging technology, such as an Agency Management System (AMS), you can streamline your processes, reduce paperwork and improve customer service. A cloud-based, encrypted, and protected AMS is especially important for protecting clients’ sensitive life insurance data.
You can leverage social media platforms to connect with potential clients, as well as utilize digital marketing campaigns to generate leads and agency digital tools to automate administrative tasks and find leads. By using technology to your advantage, you can free up more time to focus on building relationships with your clients and growing your business.
Approaching life insurance marketing can be challenging, but by following these strategies, you can connect with potential clients, build trust and establish long-term relationships. Remember to personalize your approach, understand your clients’ financial priorities and use insurance technology to your advantage. By doing so, you could potentially grow your business and help your clients protect their loved ones and their finances.