How to position an unlimited demand for insurance

Everyone in the world is waiting to get the COVID-19 vaccine. It’s a product with unlimited demand. You know what happens next: Companies will increase production to satisfy demand.

You might make the case that individuals and families have an unlimited demand for insurance too.

Why is that important? Prospects might say: “I already have insurance. I don’t need more.” They could say: “I’m young. I don’t need to worry about retirement.” You could respond, though, that however much insurance they might have, it’s probably not enough. Here’s why:

1. Protection = Protection: The vaccine is designed to protect you against the virus. People talk about 90% or 95% effectiveness. That’s peace of mind. Life insurance provides protection, too. If anything happens to a client, their family receives a lump sum for the purpose of replacing some of the lost family income. Protection is peace of mind.

2. There’s always something new. The COVID-19 vaccine isn’t “one and done.” New strains are being discovered, such as the variants in the U.K. and South Africa. And though the vaccine may prove effective against some strains of the virus, it may need to be modified for others. Going forward, periodic booster shots may even be necessary. Insurance isn’t a static product either. People face unique life situations, and new insurance products are being developed to meet these new demands.

3. Group term life policies often reduce coverage. No virus analogy here, just common sense. Clients might accept the argument that life insurance coverage through their job won’t follow them if they leave that job. They might have bought a term policy through their company and assume they have plenty of coverage. That group policy, however, might reduce the death benefit as they age, which is also when they might need it most. The fact the premium declines is little comfort.

4. Retirement has become our responsibility. Scientists worked hard to develop several vaccines in record time. We, as individuals, still have a responsibility to do our part to slow the spread of the virus. Retirement income is also our responsibility. Social Security is meant to be a part of our income, not our entire income. We must take ownership of our own retirement plans and annuities.

5. It’s difficult to save. Clients might need a helping hand with saving. People often consider saving money after they’ve paid all their bills, but few realize they should pay themselves first. Whole life insurance builds cash value over time, functioning as protection and a savings vehicle. Clients might not be good at putting savings aside, but paying their life insurance premiums does some of that job for them.

6. Lump sums don’t go as far as they used to. Remember when $1 million was considered a lot of money? It still is, but prices have gone up and interest rates have gone down. It takes a lot more money to pay expenses today. For example, tuition and room and board at a private college might cost more than $50,000 a year. If a client expects a $1 million life insurance policy to leave their family comfortable for the rest of their lives, they may be underinsured and misinformed.

In each of these examples, the logical conclusion for clients is the need to purchase more insurance. There may be unlimited demand for insurance after all.

Bryce Sanders is president of Perceptive Business Solutions Inc. His book, Captivating the Wealthy Investor can be found on Amazon.

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