Michelle Kosoi

There’s a disconnect for many Americans when it comes to life insurance. While only six percent of drivers on the road are uninsured,¹ and only 12 percent of homeowners don’t have homeowner’s insurance,² a full 41 percent of Americans—both insured and uninsured—say they don’t have sufficient life insurance coverage.³ In fact, 60 million American households have an average life insurance need of $200,000.⁴ And while the financial impact from a car accident or home loss may be great, is it really greater than the loss of financial stability caused by the death of a spouse or breadwinner? The short answer is no. That’s why it’s important to include life insurance in the conversation when you get the chance—to help your clients not only see the value of protecting themselves but also their entire family.

Beyond the breadwinner—why life insurance for family members is important.
Talking about life insurance for the entire family can help lead clients to a more secure financial future, which can help build trust and strengthen your client relationships.

Consider the cost of hiring a babysitter, tutor, cook, housecleaner, and transportation for children if something happens to the stay-at-home parent. Life insurance can provide death benefit proceeds to help pay for these essential responsibilities and help the surviving family members continue more comfortably in their day-to-day lives.

While your clients may not ever have considered life insurance for a child, this type of insurance is becoming more prevalent and can be a way to help guarantee a child’s insurability for later in life. For example, clients may purchase a 30-year term policy at age 30. If they’re in good health, they could receive a good rating and may have the ability to convert that term policy to a permanent policy.

Adding a children’s term rider to the policy may also help guarantee the child’s health insurability, potentially giving the child the ability to convert the policy to a permanent life insurance policy at age 25. Even if the child becomes uninsurable (i.e., is diagnosed with Type 1 diabetes) after the policy is in force and before their 25th birthday, they may still be able to convert the policy and help to provide some financial security for years to come. In addition, the cost of a permanent policy prior to age 25 may be much less than if they decided to purchase a similar policy later in life when they could start to have health issues.

Grandparents may want to purchase permanent life insurance on a grandchild as well. The goal here could be to provide protection and help ensure future insurability.

While understanding why clients might want or need to purchase life insurance for the family is important, it’s just the first step to helping your clients obtain the protection they need.

Not comfortable selling life insurance? It’s still important to offer it.
Perhaps you haven’t sold much or any life insurance in the past. Don’t let that stop you from providing what could be life-changing coverage to your clients and growing your business. Having a natural way to pivot to a discussion of the benefits of and need for life insurance can help you feel more confident and competent in your business and in executing a life insurance strategy.

Here are some specific ways to pivot to the life insurance conversation:

• If you just wrote a disability policy for your client, you might say, “I’m glad you decided to get disability insurance. You know, disabilities can happen more often than we might think, and it is so important to protect your family from the loss of that income. And, while the loss of income for a disability might be temporary, what about the loss of income if you or your spouse/partner were to die unexpectedly? Let’s talk about what it would look like for your family if they were not protected with life insurance.”
• If you just completed a review of your client’s homeowner’s policy, you might say, “Now that we’ve created a plan to safeguard your home, let’s discuss the largest asset you have—your family—and how we can protect them from financial hardship with a life insurance policy. Life insurance can be a way to help ensure that the family can pay off the mortgage and stay in the house if you were to die prematurely.”
• If you are conducting an investment review, you might say, “I’m glad we’re going over your investments. Conducting a review like this is so important, as the markets are always changing, and your goals may have changed over time. I’d also like to conduct a life insurance review for you as your goals for your family may have changed. Let’s make sure you have enough protection if you were to die prematurely.”

Asking key questions can help establish suitability.
Once your clients are open to discussing life insurance, you’ll want to determine if they have a need for life insurance and how much they might need. When you ask the right questions, you not only help your clients feel secure financially, but you can build and expand your business by creating opportunities to obtain additional referrals to family members. Including life insurance in an overall financial plan also provides the opportunity to meet with the family each year to reevaluate their policy and needs going forward.

Here are some important questions to get you started:

• What are your family’s financial goals?
• Does your family rely on your income for financial security?
• How would your family deal with the loss of your income?
  • Do you have a mortgage to pay off?
  • Do you have children that you’d like to send to college?
  • Do you have children with special needs?
• Have you considered how life insurance might fit into your retirement plans?
• Do you have health issues that might affect your eligibility for life insurance?
• Are you concerned about your child’s health, today or in the future?
• Do you have grandchildren that you’d like to offer financial support later in their lives?

If your clients have children, they may also want to explore the interest and need for them to have life insurance. Consider these questions:

• Have you considered how life insurance could benefit your child(ren) in the future?
• How might a life insurance policy for your child fit into your overall financial plan?
• How does life insurance for your child align with your family’s values and beliefs?

Here’s a slightly different approach that may help spark client interest.
To open the life insurance conversation, consider asking your clients, “When was the first time you looked at your life insurance?” You read that right. It’s not “the last time” but “the first time.” When opening with the question “when was the last time,” the response is often “I’m good” or “I just did that.” But, by asking “when was the first time” you can get a dialogue going by making them think about how long it has been. Sometimes, a small word change will get you out of the sea of sameness and catch the client’s attention enough to start a difficult conversation.

If you don’t ask about life insurance, someone else will.
When a father or mother dies without life insurance, the surviving spouse and children can suffer financially. A crowdfunding site (such as Go Fund Me) is not a life insurance policy. It can be a temporary fix, providing short-term assistance for a month or two. That’s why the life insurance conversation is so important, and if you don’t have it with your clients another financial professional will. These best practices can lead to significant more productive conversations and the knowledge that you’ve helped another family protect against the unknown. What a great feeling to be able to make a difference for generations.

Reference:

1. “Auto Insurance Statistics and Facts,” Bankrate, 2024.
2. Fields, Samantha, “More Americans Are Going without Homeowners Insurance. That Could Spell Trouble.” Marketplace, August 2023.
3. “Study Shows Interest in Life Insurance at All-Time High in 2023,” LIMRA, April 24, 2024.
4. LIMRA 2023 Life Insurance Barometer Study, January, 2023.

Pacific Life Insurance Company is licensed to issue insurance products in all states except New York.

Product/material availability and features may vary by state.

The home office for Pacific Life Insurance Company is located in Omaha, Nebraska.

This material is intended for financial professional use only=ly. Not for public distribution.

We as a society have had to weather some trying economic times: The great depression of 1929, the 2008 recession, and the consequences of the COVID-19 pandemic just to name a few. Each of these economic downturns left legions of people out of work or having their work hours cut drastically.

Times like these can be especially difficult for business owners selling anything but absolute necessities. Uncertainty can get multiplied many times over, and our thoughts are often dominated by worries about where the next client will come from and how to keep our business running.

But it doesn’t have to be all bad. Many savvy businesses have weathered previous recessions without collapsing, and you can use their experiences to your advantage. Two of the most relevant tips? Keep putting yourself out there, and don’t cut your marketing and advertising budgets.

Marketing Yourself in Trying Times
Jobs in all sectors take a hit when the economy does poorly. In a survey of financial advisors* by LIMRA, 63 percent said the pandemic was very disruptive to their current practice, and over 80 percent of their clients had questions about how stock market volatility would affect them.¹

So how can you stabilize your own finances and try to keep money coming in? According to the Harvard Business Review (HBR), there are a few best practices you can follow,2 including:

• Understanding the customer’s mindset during a recession.
• Continuing to market yourself however possible.
• Bolstering people’s trust in you and your brand.

These were lessons gleaned from the recession in 2008, and they’re still relevant today.

Understand the Customer’s Mindset
Just like you, customers may be unsettled by what’s going on in the world during a massive economic downturn. They’re also likely to tighten their budgets and scale back on expenditures.

Customers tend to sort expenses into one of four categories, according to HBR:²

1. Essentials: Goods necessary for survival or perceived as essential.
2. Treats: Immediate indulgences people can justify buying.
3. Postponables: Items people need or want but can put off buying for a while.
4. Expendables: Unnecessary or unjustifiable expenses.

It’s predictable behavior that customers—except the small percentage who are still comfortably well-off—are going to reevaluate where items fall on that list. Essentials are most often scaled back. Treats and expendables might drop off entirely.

Be aware when planning your marketing efforts that your customers will have a scarcity mindset. Realize they’re scared about money and adjusting what they spend it on. If you understand that thought process it can help you to figure out how to persuade people your service still qualifies as essential without using overly aggressive or pushy sales tactics.

Continue to Market Yourself³
According to the Small Business Administration (SBA), businesses that cut marketing expenses during lean times do worse in the long run than those who continue to advertise. At the very least you may want to try and maintain your regular marketing budget. Chances are that competitors will be cutting theirs, potentially giving you an opportunity to step into the empty space.

If you can, keep an eye on competitors’ expenditures to see who is cutting their marketing budgets. Reevaluate your marketing mix to make sure it’s as streamlined and cost-effective as possible and stop any marketing channels that aren’t working.

The SBA recommends using direct language in your ads that communicates the value of your service rather than going for an emotional hook. In hard economic times consumers don’t have the emotional bandwidth to spare. Opt for plain, straightforward language instead.

Stressing the quality of your service and the value it brings to your customers’ lives frames it in essential rather than expendable terms. Clients consider every purchase very carefully in a down economy and often lean toward the ones that can provide lasting benefit.

You can further reinforce your brand’s value by strengthening your customer service. People are going to be dealing with a lot, so a positive experience with you or your company can mean the world. Brands that treat their customers like individuals leave a better lasting impression. As the SBA puts it in their guide to weathering an economic downturn:

“In strategizing how to build your customer base and induce current customers to raise revenues, the importance of good service cannot be overstressed.”³

Bolster People’s Trust in You and Your Brand
How you are perceived can make a big difference. If you appear confident and can convince people you are providing a needed service, they may be more likely to patronize your business. To do that you’ve got to make sure you’re running things well.

Invest in your employees. Explore options that avoid layoffs. Instead, see if you can reduce costs elsewhere to keep as many employees working as possible. Take advantage of the downtime to hold training sessions.

Increasingly many employees are working from home, so group video meetings for training are a great option. Free online classes also offer the promise of developing relevant skills to you or your employees. Scheduling training sessions at a time that works for employees or letting your team members choose when they train can help boost morale during a difficult time.

Cut Where You Can
Just as your clients are doing, you should triage your own expenses as well. Take an in-depth look at your budget and see where you can reduce costs, either by cutting back or doing things more efficiently.

That can include:

• Delaying the purchase of high-ticket items.
• Looking for extraneous expenses to cut, like rented space you aren’t using.
• Allowing more employees to work from home.
• Evaluate your marketing, business processes, and client touchpoints to identify areas you can reduce paper and adopt digital capabilities.

Presenting a calm, efficient front can make current clients feel better about investing time spent with you and motivate new ones to come on board.

The Takeaway
Do the hard work of understanding where your customers are coming from. Market to them in a human way that isn’t overtly sales-y, and present a calm collected front. Also, look after your people so you can help your clients and leave them feeling good about doing business with you.
If you can do these things while keeping yourself stable, you’ll have a greater chance of weathering the storm.

Sources:

1. “Coronavirus (COVID-19): Advisor Pulse.” LIMRA.com. March 2020.
2. “How to Market in a Downturn.” Harvard Business Review (hbr.com). April 2020.
3. “Survival Tips for Managing During an Economic Downturn.” U.S. Small Business Administration (SBA.com). May 1, 2020.

* In order to sell life insurance, a Financial Advisor must be a properly licensed and appointed life insurance producer.

This article is intended for Financial Professional use only. If you are not a Financial Professional, please visit our public website @ www.PacificLife.com.

Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product/material availability and features may vary by state. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.

Life insurance is subject to underwriting and approval of the application and may incur monthly policy charges.

Broker World and companies referenced in the article are not affiliated with Pacific Life Insurance Company.

This article is distributed through Pacific Life Insurance Company, Lynchburg, VA (844) 276-5759.

Pacific Life Insurance Company’s home office is located in Newport Beach, CA.