Securing life insurance for a client is an important part of the planning process. However, as advisors, we ca💜n do a poor job of ensuring clients feel empowered and confident when placing coverage.

Over 50% of consumers worry their life insurance won’t be enough to protect their loved ones, yet the percentage of peo🅰ple applying for coverage has decreased in recent years.

Even more troubling? According to a 2024 Insurance Barometer Study conducted by LIMRA and Life Happens, 42% of American adults say they need life insurance or more of it, representing a life insurance need gap for about 102 million adults. When asked what’s keeping them from applying, a (perceived) lack of affordable options and uncertainty of how much to buy or what type were high on the list.

What I’m Telling My Clients

Before discussing any product, I ask clients what they would like to happen if they die.

Would they want to replace their income fꦉor the household? Are there causes or charities they’d like to support? I may offer additional context for them to consider, but I offer input sparingly so the client feels in control of the process.

I then find a basic life insurance calculator online and input their end-of-life financial wishes. While I could use the fancy ones generated by financial planning software, these can overwhelm a client. By letting them play a role in finding the right amount, I hope they can see there’s an objective need for coverage.

Only after we’ve found the need do we discuss products. For a young family, term insurance may offer the best blend of securing coverage while preserving their ability to address other goals. When appropriate, we cover the pros and cons of term vs. permanent, trust planning, and more for those who need it. However, these considerations come after the client feels confident knowing they determined there was a need for coverage, agree with the need, and are comfo🧸rtable paying to address it. Whatever type of insurance they choose, I don’t move forward until th⭕ey can explain the coverage back to me.

The Bottom Line

The life insurance planning process should leave clients feeling more secure, not confused. By simplifying it and putting them in the driver's seat, we can improve their insurance literacy, validate our expertise, and increase their confidence in their plan.