Any Sane Person Would Dislike Buying Life Insurance

Change doesn’t happen until someone starts the motivation engine. You may have already noticed that people don’t necessarily do things because they make sense.

I tend to be a logic and reason person. That has blemishes in the life insurance sales business. Once you catch on to that, life gets easier.  This thought came my way recently and I think Mark Rogers has hit it.

“Logic makes people think; Emotion makes them act.”

Thinking and action are difficult together.  Yogi Berra once said you can’t hit and think at the same time. It appears to be true for insurance purchases, too.

Here’s why.

Buying life insurance is the “Perfect Storm” of unpleasant financial planning chores.

  • Dealing with aggressive agents.
  • Wading through dense jargon.
  • All the while confronting your own mortality.

I am pretty sure logic is far up the track when it comes to winning that race. So what to do?

Emotion relies a little on facts. It relies on what the facts mean and that is something agents can deal with by stories, examples and questions.

Confronting mortality is emotionally negative. No way around the fact,  but you can paint it as inevitable and things that are inevitable have planning opportunities built in. Tax advantages are one of them. Life insurance is provably the least expensive way to put liquidity into an estate. People must arrange liquidity anyway and getting the government to pay for part of it is pleasing.

Wading through jargon is the advisor’s fault. It usually means they don’t fully understand it either. Complexity is not your friend because it makes the client uncomfortable. Think about life insurance as an option on money.

Options are a way to control an asset until you need it. If I want an option to buy the land beside my business, I would expect to pay some amount each year for the right. The option premium. Same thing with life insurance. An option on money. If I have an option on real estate, when I want the property I must pay the capital price. The advantage to life insurance is when the execution of the option happens, my estate gets money for free.

Dealing with aggressive agents is not fun I’m sure. Again, if the agent needs to be aggressive, they probably have just that one tool in their bag. Agent’s lose track of what’s happening because they face rejection so often. The answer is to see the meaningful problem. The financial loss if someone dies. Both agent and client can sit on the same side of the table and discuss the problem on the other side. Treating the client as the adversary instead of the client’s problem as adversary is an error.

Keep the baseline in sight.  Clients forget that it is not the insurance that costs so much, it is the problem that the insurance solves that costs so much.

Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.  In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you.  don@moneyfyi.com  866-285-7772

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