Life insurance can be complicated, but it doesn’t have to be
Final expenses (i.e., burial, funeral costs) can add up
A little-known insurance option may be the ideal solution
While the COVID-19 pandemic brought us many surprises, an uptick in newly issued life insurance policies wasn't exactly shocking. Thirty-two percent of first-time buyers surveyed did so because of the pandemic alone.1But a substantial gap remains. According to the life insurance research group LIMRA, 70% of Americans admit they need life insurance, yet only 52% actually own some form of coverage.2
So why the aversion? For one, thinking about the inevitability of death is about as fun as it sounds. Then there are more immediate concerns: Affordability, how much coverage to purchase, and the invasive medical exams, just to name a few. Thankfully, clients can be made aware of a life insurance option that brings new meaning to the word “simple.”
“You’d be surprised to know just how few people are aware of final expense life insurance,” said Shawn Meaike, President, Family First Life. With over a decade of experience in final expense sales, Meaike has seen it all.
“I think people are intimidated by the process,” he added. “Many think it's unattainable, unaffordable. Then you're actually able to get in front of them and educate them. It’s only when they have the information in hand that reality sets in — they need protection.”
Why Final Expense?
Traditional life insurance has many benefits, but its utility is limited for certain clients.
“A lot of times people just have the wrong type of insurance,” said Jordan C. Smith, Partner, North American Senior Benefits. “They’re approaching retirement and have a plan through their employer they're about to lose, or it's about to skyrocket in price and they need to transfer over to a permanent policy. Final expense is different. It never goes up in price and it lasts their lifetime.”
Some offerings go even further by offering nursing home or terminal illness riders, as well as optional riders such as an accidental death benefit and a means to gift level term insurance to children and grandchildren.
“We see a lot of clients who aren’t aware they can get a plan that not only meets their budget, but would be simplified issue,” added Smith. “With these policies, there’s no medical exam, no blood or urine tests, and even though we mainly see seniors who could be dealing with some health conditions and medications, these simplified issue products accept most conditions.”
Meaningful Connections Matter
In life insurance, sometimes all it takes is just one interaction to forever change your perspective. Meaike recounted an experience with one of his first clients.
“He was young, nowhere near his 60s, and I just thought, ‘Well, I’m glad he’s getting a policy, but he won’t be needing it anytime soon,’” Meaike said. “Then he died. About a week later in a terrible accident. I’ll never forget that night when the family called. They couldn’t believe the death benefit was arriving already, because it was so quick, almost too good to be true.
“He never went through medical. He was already approved. The payment came out and I said to myself that day I'm going to treat every client like this one.”
According to Meaike, the key to selling final expense is to take yourself out of the equation.
“Final expense insurance is very much an emotional purchase, not a transaction. If you treat it as such, people will likely say no. Who wants to feel like another number in your spreadsheet? That's why I've always told everybody I've worked with: ‘This is about the client first — not you.’”
Things to Consider:
Final expense life insurance is designed to bring comfort and confidence to end-of-life planning
Some options, like simplified issue, make it much easier to get protection without medical underwriting
Selling life insurance is about giving the best financial gift someone may ever receive — clients depend on you
1. “The COVID-19 Effect: High Tech with Human Touch to Optimize Life Insurance Customer Experience,” LIMRA/BCG, 2020
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker-dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical, or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.
