Ownership of individual life insurance has been steadily declining for decades, despite the benefits, according to a recent study conducted by Prudential [1].

The survey cited a number of consumer opinions that prevent many potential buyers from buying adequate amounts of life insurance. Many consumers:

     1) Believe life insurance has a limited role
     2) Perceive high face amounts of coverage as excessive
     3) Believe that they are already adequately protected

The reality is these uninformed opinions become obstacles that hold many potential buyers back from purchasing appropriate amounts of life insurance. This pool of potential buyers is huge and growing. The survey found that 4 in 10 adults have no life insurance coverage. Only 36% of U.S. adults own individual life coverage and this is down significantly from 59% in 1960.

So what does this mean to you? OPPORTUNITY! Why? Most life insurance buyers still prefer one-on-one conversations to consider their options. That means that unless they engage in a productive conversation with a skilled financial advisor like you, they will remain uninsured or under-insured.

     1) 55% of consumers prefer to learn about life insurance through a financial professional.
     2) 62% prefer to purchase life insurance through a face-to-face interaction.

You can begin to help these people right away because the life insurance needs of most consumers are easily identified and fulfilled. According to the survey, here are three of the reasons consumers consider the purchase of life insurance.

     • Pay final expenses/funeral costs 63%
     • Pay off debts (mortgages, credit cards, loans) 59%
     • Provide replacement income to family

Your challenge is two-fold.

     1) Engaging people in productive conversations to determine if they are part of the group who wants to work with a financial professional like you.
     2) Having meaningful conversation with those who are qualified to gain a clear understanding of the kinds of outcomes that are important to them so you can help them relate to the benefits of owning appropriate kinds and amounts of life insurance.

Far too often, I've see advisors skip ahead to the second challenge without first gaining and confirming prospect agreement on the first. This is a costly mistake because an important opportunity to build a higher trust relationship is lost and valuable time is wasted.

You can immediately increase your effectiveness by doing three very simple things.

     1) Identify the shared concerns of one of your market segments (i.e. single people, married with children, recently divorces, pre-retiree, retiree)
     2) Provide and listen for useful information to qualify prospects
     3) Introduce and reinforce attitudes shared by qualified prospect

Here are 5 models you can use to engage and qualify prospects from the people you meet and your current clients to quickly identify those who will openly talk to you about their needs for life insurance.

1)  Direct Approach using an Open Probe: 

How do you feel about working with a financial services professional like me to help you determine the kinds and amounts of life insurance you need?

2)  Direct Approach using a Closed Probe:

 Do you have any objection to discussing your life insurance needs with me?

3)  Informative Approach using a CAPS™ Transition:

Most of the people don't want to have too little, or too much, life insurance. (slight pause to listen and evaluate the person's attitude) Part my services include helping (insert the name of the market) like you determine if you should make any adjustments in the kinds and amount of life insurance you own. You'll benefit because you'll have the confidence of knowing your loved ones will have the money they need to pay final expenses, pay off debts, or to replace lost income. (Listen & Evaluate the attitude of the person)

4)  Informative Approach using a CAPS™ Transition, followed by an Open Probe:

Most people don't like thinking about their need for life insurance any more than they like going to the dentist. (slight pause to listen and evaluate the person's attitude) That's why many of my clients periodically have a short conversation with me so I can help them figure out what kinds and amounts of life insurance they should own. They benefit because I can help them evaluate their options and make good decisions.

How do you feel about working with me to help you evaluate your options so you can determine the kinds and amounts of life insurance you should own?

5) Informative Approach using a CAPS™ Transition followed by a Closed Probe:

Very often when a person (insert market concern, i.e.  becomes responsible for college debt, or experiences the birth of a child, or begins serious retirement planning, or retires, etc) they decide to meet with a financial advisor to discuss their needs for life insurance.  (slight pause to listen & evaluate the attitude of the person)   I help my clients determine their specific needs and if life insurance makes sense.  They benefit because they have the peace of mind that comes from owning the right kinds and amounts of life insurance.

How do you feel about working with me to help you provide your family the financial security you want for them?

Using any one of these 5 approaches to confirm agreement the prospect is ready to discuss their life insurance needs with you before attempting to discuss specific life insurance solutions will build higher trust relationships.

Countless CAPS™ Workshop attendees increase their effectiveness and productivity whenever they use a CAPS™ Transition statement to begin their approach when qualifying prospects.

In next month's e-CAPS™ Connection we will help you identify ways to sharpen your Probing and Supporting skills so you can have more meaningful conversation once you have qualified a prospect. You will benefit because you will learn how to ethically persuade more qualified prospects to buy from you.

If you have not attended a CAPS™ Communication Awareness & Persuasion Skills workshop and want to learn how you can use the Skills to turbo-charge what you have already learned about selling, contact us or click here to learn more.

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[1] The Life Insurance Coverage Gap. Prudential Financial, Inc. 2011