Overcoming 5 common life insurance objections
September 15, 2016 by Curtis Hawks
Even with a greater amount of consumer education than in previous decades, selling is still an important aspect of connecting prospects to an appropriate insurance solution. A big part of selling is dealing with objections. Here are five common life insurance objections you’ll likely face from consumers and what you can do to overcome these objections.
“Life insurance is too expensive!”
This is probably the most common objection you’ll hear from consumers. It’s true life insurance premiums can initially be jarring, but remember expensive is a relative term. Plus, consumers often overestimate the cost of insurance. The latest Insurance Barometer Study found that the median estimated yearly cost for a $250,000 term policy for a 30-year-old non-smoker person was more than double the actual cost.
Ask/tell the consumer:
“When was the last time you looked at insurance prices?”
“Do you know that there are many types of life insurance to meet a variety of needs?”
“Did you know that most people overestimate the cost of life insurance?”
“The best way to get a true picture of the cost of life insurance is to use the latest software quoting tools based on your specific situation and needs.”
“I don’t need life insurance.”
This objection can be the result of many factors. The consumer may not be properly educated on the utility of life insurance or may have some misconceptions about how life insurance works. Perhaps they are young and would rather use money that could be used for insurance premiums on more immediate needs. It’s possible they only think of life insurance in terms of the death benefit.
Ask/tell the consumer:
“What would happen to your household if you died today?”
“Who would take care of your debt, pay the mortgage or cover your child’s college tuition?”
“Are you aware that many life insurance policies have living benefits — things that can help in the case of a disability or chronic condition? Some even have cash you can use throughout your life.”
“I don’t qualify because of health issues.”
This objection arises because consumers are aware that many life insurance policies require medical underwriting. But like other aspects of life insurance, they may have misconceptions on how this process works or impacts their options.
Ask/tell the consumer:
“Did you know there are certain types of insurance that are guarantee issue?”
“Just about anybody can qualify for a life insurance policy — there are many different types that account for many different situations.”
“I have money saved up.”
It’s possible that a consumer feels they have enough money accumulated through savings and other assets that they don’t need life insurance. Maybe once they give you a peak at their financials they do, but this presents an opportunity to discuss efficient wealth transfer and estate planning options.
If they don’t, explain what the average cost of retirement is. According to the U.S. Department of Labor, the average household will use nearly $41,000 per year in retirement. So if a household retires at 65 and expects to live another 20 years, the retirement amount used for this time period will be $820,000. Converting a large sum of savings into a cash value life insurance policy can help clients achieve a robust source of retirement income on top of a death benefit.
Ask/tell the consumer:
“Are you aware that you can use life insurance to transfer wealth in a more tax-efficient manner? This can be true if you want to endow a charity or transfer to family members.”
“Given what we know about life expectancies and inflation, are you confident that your savings of _______ will give you the retirement you desire?”
“I already have life insurance.”
This should be an easy objection to overcome. If a consumer already has a policy, find out when they purchased it, what type it is, and if they have been any significant life events. A good financial plan, whether it involves a life insurance product or other solution, should be reviewed periodically to make sure it still matches the consumer’s needs and objectives, and to see if there are other opportunities.
Ask/tell the consumer:
“When was the last time you had a policy review?”
“Have you have had a new child since you purchased it?”
“Do you know if your policy still meets your needs?”
“According to a recent survey, nearly half of those who stated they have life insurance may be under-insured.”
