April 27, 2013


mom holding babyA life changing event — the birth of a child or a marriage (perhaps not in that order) — is a time to evaluate your insurance coverage. You might need more to take care of your loved ones in case you can’t.

If you’re single and start working, you might get critical illness insurance or income replacement insurance.

That’s not happening.

Life CHANGING Events

Here are typical life changing events:
  • Starting to work
  • Getting married or divorced
  • Birth or adoption of a child
  • Buying a home
  • Losing a loved one
  • Starting a business
  • Planning for retirement
  • Retiring
  • Preserving your estate
Each event is a prod to re-evaluate your insurance, investments and financial plans.

Research Shows

Only 41% said a life changing event prompted them to shop for life insurance (all the statistics are from LIMRA and refer specifically to life insurance). Do the majority — the other 59% — think nothing will happen to them? That’s not a bet you want to lose.

What’s more
  • 60% of new parents don’t shop or buy life insurance within two years
  • 70% of newly married or newly divorced couples don’t shop or buy life insurance within two years

What’s Going Wrong?

People can’t be ignorant about the need for insurance. Maybe they think insurance is too expensive or don’t know where to turn for objective help. The advisors might not be contacting them (60% don’t remember being approached to buy life insurance in the last two years). Some were approached but 35% say the advisors didn’t follow up. How strange. Maybe the advisors thought the cases were too small to bother with?

Maybe the problem with the insurance industry? The financial sector ranks at the bottom in trust the latest Edelman Trust Barometer. That can’t help.

Possible Reasons

Maybe advisors aren't maintaining enough ongoing contact with their network to know of important changes in their lives. Well before I worked for Met Life, agents in New York City collected premiums weekly in person on foot. They were part of the community. They built relationships.
They knew what was happening.

In To Sell Is Human (my review), Dan Pink says that once buyers know they have a problem, the seller loses relevance. That's because buyers can often find solutions on their own. The Internet gives ready access to information. Finding problems becomes more important than solving them. Are advisors good at consistent meaningful contact?

Who Loses?

Life changing events affect our insurance needs. Unless we take time to see if we need to add, update or remove coverage. we may not have the amount of insurance we really need. Too many are not doing an evaluation. How about you?


Podcast 217

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PS What do you think is going wrong?

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