Why people buy life insurance

As you meet with new prospects and conduct client reviews over the next month, try using this basic approach to life insurance coverage. You may be surprised at what you uncover.

I am often asked how to decide on what to sell a prospective client. Believe it or not this comes from even the veteran agents. There are so many companies with so many products, we'd have to hire additional support staff just to keep up with the changes.

But who I am kidding, additional support staff would take away from our commission, right? We’ll save that argument for another blog article.

So when that person sitting in front of you, worried if you are going to force them to buy something like the last guy, asks you what you think they need, the basic question you need to ask the prospect is this: “Well, are you in protection mode or are you in giving mode?”

When they look at you funny and ask what you mean, explain that people buy life insurance for one of two reasons.

Reason one: People buy life insurance because they are looking for a way to protect the people and the things that they love. Hopefully, they love their spouse, their children and anyone else using the household income. They love them enough to provide money in case of an untimely death.

Perhaps they love their home so much that they want it paid off and protected from having to be sold. Business owners may love their shop so dearly that they want to protect it from having to be liquidated. They may also want to protect some of the key people in that business, so if they die, it won’t be disastrous to the company.

Those wealthy folks challenged with the estate tax want to protect their assets from going to Uncle Sam.

Address your prospect again. “You may be in protection mode.”

Reason two: People buy life insurance to give to the things and the people that they love. But now the kids are grown, the house is close to being paid off, the business debt is very little — the need to find fulfillment through giving sets in.

People may want to leave a legacy to their church or favorite charity. Perhaps they want to set up a trust fund for their children or grandchildren. You see, we exist in a time of abundance. People have money, but are happier if they can do something for the ones they love.

Money magazine’s survey on money and happiness found that if people make charitable contributions on a regular basis, they are happier, exude confidence and are more content than those that do not. They are in giving mode.

As you meet with new prospects and conduct client reviews over the next month, try using this basic approach to life insurance coverage. You may be surprised at what you uncover. Protection mode or giving mode: Why people buy life insurance.