Misconceptions About Life Insurance

Clients need your help, guidance, and knowledge. And LLIS is committed to providing you with the education and resources you need to steer your clients away from the inaccuracies and toward the realities about life insurance. Here are some prime examples of just why they need expert advice:

Gens X & Y.¹

60% of 20- and 30-somethings said they don’t understand the difference between term and permanent life insurance.

More than 1/3 don’t know what kind of insurance they already own, and almost 20% don’t know the value of their own death benefit. And there is a fundamental mismatch between how much money they thought would take care of their loved ones and how much coverage they actually have.

“How much money would it take to make all your dependents’ troubles go away?” The average answer was more than $1 million.

How much insurance do they actually have? The average answer was $390,000.

Boomers.

“I’m over 60. I don’t need life insurance.” Here are 13 reasons why:

Cover costs associated with death and final expenses

Cover estate and inheritance taxes

Offset loss of retirement income to spouse (pension max)

Spend your money and still leave a legacy

Pay off debts like mortgage and credit cards

Provide for a special needs loved one

Offset loss of a key person in a small- to medium-size business

Provide funds to support a buy/sell agreement for a business

Cash values could be a tax-free source of supplemental retirement income

Cash surrender values are a source of emergency funds

Replaces assets spent providing long term care services for an insured or loved one

Allows parents to evenly distribute property or business interests among children, grandchildren, favorite charity

It’s creditor-proof (in most states)

And everyone in between.

“I’m healthy. I’m not going anywhere.”

The truth is, as much as we hate to admit it, we will die. No one likes to think about it. And since we can't predict the future, we don’t know when it will happen. If we knew, we’d probably be living our lives a whole lot differently.

Every day should be a good day to die.

Life insurance isn’t for you; it’s for the ones you care about most: loved ones and favorite charities.

Wouldn’t your clients like to go to bed every night knowing they’ve laid the groundwork for those they care about to be well cared for financially?

In my 40+ years in the insurance industry, I’ve never found myself apologizing to anyone for their life insurance purchase, and I’ve never had a beneficiary say “this is too much.” It’s fundamental and foundational, and can address each client’s unique goals and concerns from financial security for family, building a sound business or succession plan, designing a secure retirement, or creating a legacy. Life insurance offers the flexibility for those different and changing needs, relieves financial worries, and provides up to a lifetime of opportunity and security.

- Keith Maurer

Visit Advisor Tools on the new LLIS.com for helpful e-brochures about life insurance: Low-Load Life Insurance, Term Life Insurance, and Universal Life Insurance. Those same e-brochures are available for your clients in Client Tools.

¹ LearnVest and Guardian study