Buying Life Insurance for the First Time
Are your clients nervous about purchasing their first life insurance policy due to confusing terminology and too many options? Not to worry; I am going to provide you with a valuable list you can share with them when buying life insurance for the first time.
Advise Them to Perform a Financial Assessment
One of the first things you want your client to do is perform a financial assessment. Make sure they look at their current expenses and determine what it usually takes to provide for their family. This will be beneficial when you help them determine the amount of coverage needed.
Determine How Much Coverage is Needed
Ask your client why they are getting the policy. Is it to pay off their mortgage, send their children to college, help pay bills, or take care of any other long-term needs? Based on the answers to those questions, you would begin advising them on the amount of coverage they need. A general rule of thumb is that you want their death benefit to be about 10 times their annual salary.
Describe Term Life vs. Whole Life
Ensuring your client knows the difference between term and whole life is necessary when they are purchasing a policy. Term life is a temporary policy that is active for 10 to 30 years. Most people enjoy its affordability, but the premiums may rise after the original term.
On the other hand, whole life is a permanent life insurance policy. Due to its lifelong coverage and growing cash value, the whole life policy is significantly more expensive than the term life. Taking out a loan, retirement supplement, emergencies, or paying the premium are some of the ways the cash value can be used. They are both good insurance plans, but you must decide what is best for your client.
Help Them Find the Best Rate
Age, health, and amount of coverage are some of the reasons the rate will vary for your clients. That is why it is important to get quotes from various companies. This will allow you to make a more informed decision and ensure your client gets the best and most affordable coverage.
Make Sure They are Honest When Applying
Filling out a detailed application is one of the requirements to receive a policy. Therefore, your client should be prepared to answer questions related to medical history, age, weight, mental health, tobacco use, hobbies, driving record, etc. The insurance companies may look to confirm if the information is correct. So, make sure to remind your client to be honest and not leave anything significant out.
Get Them Temporary Coverage
The underwriting process can sometimes take a while so speak to your client about the option to lock in temporary coverage while they wait for their policy to become active. They would provide the first premium payment along with their application. This ensures they could still receive the death benefit if something were to happen to them during the application process.
We hope these tips for buying life insurance are helpful to you.
Empower Brokerage is dedicated to helping you educate your clients on the insurance they need and staying on top of their health. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.
Kayla is a graduate of Texas A&M University and joined the marketing team at Empower Brokerage in early 2021. She creates content for the company websites and assists with various marketing campaigns. LinkedIn Profile