It can be a challenge selling people on the importance of life insurance. As an agent, you’ve likely heard all the reasons why someone believes they don’t need coverage. In most cases, people simply don’t have the information they need to make an informed decision. In fact, when asked why they don’t own a life insurance policy, 54% of people in a recent survey said they don’t know what type of policy to buy and are confused about how much coverage they need.

September is Life Insurance Awareness Month. As a life insurance agent, this can be the ideal time to reach out to prospects and existing policyholders and educate them on the importance of life insurance. The 2022 Life Insurance Barometer Study conducted by LIMRA and Life Happens reveals the most widely held misconceptions about life insurance that prevent so many Americans from purchasing a policy to financially protect their loved ones. We’ve put them together here so you can feel confident in responding to objections with a well-informed response.

1. Life insurance is way too expensive. More than half of Americans overestimate the cost of life insurance by as much as three times what it really costs. According to the Barometer study, a life insurance policy for a healthy 30-year-old is approximately $170 per year.

Tip: Term life insurance is often a more affordable choice for many people who have a need for coverage but think they can’t afford a policy. When quoting a term policy (or any other type of life insurance), break the total premium down into monthly payments. It can be easier for people to consider how a small monthly payment may fit in their budget instead of looking at an annual premium.

2. I have enough life insurance coverage through my employer’s workplace benefits plan. Approximately 26% of workers surveyed believe that the life insurance they have through their job is enough. According to the study, the U.S. Bureau of Labor Statistics reports that median life insurance coverage offered at most workplaces is either a flat sum of $20,000 or one year’s salary. For the 54% of American households that rely on two incomes to make ends meet, you can see why many don’t have enough coverage through their workplace.

Tip: A good way to approach a prospect who thinks they have enough life insurance coverage through their work is to ask them to check with their human resources department and determine exactly what they have for benefits. In addition to low limits, they may be surprised to find out that what they have is actually a small burial policy (a very specific contract that is aimed at covering funeral expenses), or an accidental death policy (only paying out in the event of a death due to an accident).

3. I’m young and healthy. I’ll get life insurance when I’m older. According to the study, 4 in 10 insured consumers say they wish they had purchased their policies when they were younger. The fact is, younger individuals who are in good health often put off buying life insurance until they are older or when they get married or have children. Waiting until they have a need for a policy may sound sensible, but life insurance becomes significantly more expensive as a person ages. Moreover, the problem of affordability may worsen or they could be denied coverage if in the future they develop health issues.  

Tip: When quoting coverage, run illustrations that show what the cost of a life insurance policy is today versus 10 or 20 years from now.

About FastrackCE
The summer is going by quickly! If you need to complete your continuing education credits before the end of the summer, FastrackCE can help. At FastrackCE, we make it easy for insurance professionals to maintain CE licensing requirements conveniently online — including life and health, long-term care and annuity training/certification. For information, call 800-544-3605 or visit fastrackce.com.

Source: LIMRA 2022 Life Insurance Barometer Study. Methodology: In January 2022, LIMRA and Life Happens engaged an online panel to survey adult consumers who are financial decision-makers in their households. The survey generated over 8,000 responses. The results were weighted to represent the U.S. population.