There is a misconception among unmarried individuals that without any dependents, it’s okay to put life insurance in the back burner.
In the absence of family members who may be significantly impacted by their sudden loss, single individuals may feel that there’s no need to engage in advanced financial or estate planning to mitigate the risks. Some people, on the other hand, refuse to think of what life insurance is protecting them from: illness, fire, liability, and even death.As an insurance agent, you know that regardless of your client’s demographic, life insurance can mitigate the damage they’ll experience in the occurrence of such events. The problem is, even if you have a no-fail approach that works for couples and clients with families, dealing with unmarried clients is a unique challenge altogether.
For most insurance agents, it’s relatively easy to get the buy-in of couples with children. That is because people’s priorities change when they have children. Couples are already aware that investing in life insurance protect their dependents in the event of an untimely death. And when they have dependents to think about, they tend to seek out ways to secure their future.In contrast, selling life insurance to single individuals can be an uphill battle. Life insurance is low on the priority list of most young people. As these priorities move from acquiring material things to investing in experiences, getting life insurance has moved farther down the list.
Know Your Obstacles
There are many factors that make single people apprehensive about getting insured. What tops the list is the current economic climate. (As long as we continue to see an uptick this obstacle happens less, but some will still think insurance is too expensive to have.)
During economic downturns, people are less likely to buy insurance. According to LIMRA, as a demographic category, 54% of single men and 58% of single women lack life insurance. That’s because, in the midst of concerns over job security and the economy in general, it’s hard to get individuals in their 20s and early 30s to pay life insurance premiums.According to Marvin Feldman, president and CEO of nonprofit insurance organization Life Happens, “Many people don’t look for life insurance because they think it’s too expensive.” Certainly, older singles are aware that they need life insurance – it’s just that, especially when economic conditions are bleak, many find the cost prohibitive.
Get the Buy-in of Single Clients
While it’s true that it can be harder to convince a single client that they need insurance, it doesn’t mean you should throw in the towel.
Not all hope is lost when it comes to convincing single clients about the value of life insurance. Many 20-somethings have seen and felt the aftermath of the most recent recession. Millennials who live with their parents have seen how the financial meltdown has left their parents and grandparents in retirement. Now that the economy is recovering from the recession, the importance of preparing for financial security has become clearer for younger individuals.
In addition, according to USAA's life insurance company executive director Greg Blake, agents can look forward to demographic shifts that are currently at play.
There are currently more single households than married households, and single people stay unmarried longer. The good news is, when single people experience major life events, their moves to cushion themselves against risks include the purchase of life insurance.
As single individuals begin thinking of building a family and buying a home, life insurance becomes one of their priorities. There's one more factor, too: as the responsibility of caring for grandparents or aging parents also often fall on single people, they turn to insurance in making sure their dependents will be provided for.Your most important role is to educate your single clients on how life insurance can still be valuable for people who are yet to have a spouse or children. And it’s up to you to demonstrate to your single prospects why the best time for life insurance is now.
Here are some ways you can guide the life insurance conversation with your single clients effectively:
Remind Your Clients: Start Young.
Life insurance is essential at any age. Single individuals, no matter their age, need coverage. But it’s wiser to invest while young. Compared with Baby Boomers and Generation Xers, Millennials are more likely to qualify for the best insurance rates.Life expectancy decreases while the chances of developing health issues increase as people age. As younger individuals have longer life expectancies, life insurance can also cost less on a monthly basis. Health problems could also prevent older individuals from qualifying for insurance. Meanwhile, as younger people have longer life expectancies, they are more likely to lock into lower life insurance premiums.
Spark Conversations About the Future.
There’s plenty of time spent talking about how couples, families and even businesses can use life insurance to secure their future financially. And single individuals? Not nearly as much. Even without children, ongoing financial obligations, or anyone depending on their income, it’s important for single people to be included in such conversations.
As a life insurance agent, your role is pivotal in the process of identifying how single individuals can benefit from life insurance, where protecting the future is involved. By locking in a valuable rate now, your clients can have peace of mind, knowing that if in the future they choose to have children, they can adjust their policy and pass their assets on to their beneficiaries.In many cases, single individuals take on other family responsibilities such as taking care of siblings or aging parents. Life insurance can help the single person have peace of mind, knowing that there is money in place to continuously provide for their loved ones’ needs.
Show How their Future Partner May Benefit.
Many young people put life insurance in the backseat because they’re young and healthy. But one way to position the sale with a single person is to convince them to make meaningful choices for their current and future loved ones.
Determine, for example, whether your client lives with their significant other. When individuals live together, they almost always share financial responsibilities, from rent to mortgage payments. If one partner passes away unexpectedly, their significant other faces those financial obligations. Life insurance can help prevent putting the other future partner in a tight situation when the unexpected happens.
No one wants to think about – more so talk about – their own mortality. But death is an important topic to discuss, as when a single person dies, family members will be left to pay for expensive funeral and burial costs. This may amplify the negative emotions already tied to the situation.
Recommend a permanent life insurance policy to your clients. Life insurance allows family members to handle the memorial or funeral service, without the added weight of financial obligations.
But Don’t Rely on Fear-based Messaging
“What will your family do when you’re gone?” has always been the content of many life insurance advertising materials. While this might have served its purpose decades ago (when insurance was relatively new), today’s more discerning audiences have become immune to that message.
It’s true that the primary purpose of insurance is to protect a person’s loved ones from financial hits in the event of death, but it’s not enough to rely on fear-based messaging.Instead, understand the emotional reason why your customers would want to protect someone with insurance. That’s right – go for the emotional reason, not the rational one. Too many insurance companies (your competitor included) communicate paper-thin and superficial messages about the value of life insurance. Instead of trying to elicit fear, go for encouraging messages, or define who they become when they purchase insurance e.g. “you will leave your family with student loan debts when you die” versus “a caring child will give their parents the gift of peace of mind when they buy insurance.” This tone of discussion puts value into the financial products you offer, and the perception of value is a more effective approach than fear mongering.
Pro Tip: It's easy to fall into the trap of generic marketing (everyone does at some point). You can avoid that by focusing on the way your client will feel having peace of mind.
What Can They Get Now?
Information is readily available online. People can quickly learn about other methods of achieving financial security, such as becoming an investor, joining a cooperative, or opening a low-cost franchise that historically yields high returns. People who are looking to secure their future and grow their income would more likely consider using their money for these options rather than getting an insurance policy.
Because they can visualize the short-term benefits and see themselves getting value out of investing or opening a business.
Take the same approach when promoting the insurance policies you sell. Draw attention to the value and benefits they can immediately enjoy, not just the long-term benefits. Appeal to their emotions the same way lifestyle brands do, by highlighting the fulfillment of wants, not just needs.
When you sell final expense insurance or life insurance, show what they can do with their policy as early as now, like choosing a casket or urn design, columbarium or memorial parks, and other details of their funeral plan.
Address Those Who May Not Have Conventional Obligations
As a single individual, your clients have obligations that stretch beyond paying for school or passing assets on to children. By asking the right questions, you help your clients see how insurance can be valuable, even for single individuals without any traditional obligations.
Here are a few you can try:
- 1Did any of the members of your family pay for your education?
- 2Is there substantial debt that you wouldn’t want to leave your family members behind if you were to suddenly pass away?
- 3Do you currently provide financial support to siblings or aging parents?
Single clients who have private student loans, for example, can benefit from life insurance. Federal student loans are discharged in the death of the borrower, but in private student loans, the rules vary according to the lender. If the borrower’s parents cosigned the private loans, they are likely to be on the hook for the debt when the borrower dies and the lender required payment. Life insurance can assure the individual that the debt will not burden others if they die.Through life insurance, your single clients can address unconventional responsibilities, such as reimbursing family members who have paid for their education, clearing any debt, or providing continuous support to parents or siblings.
Use the Tools at Your Disposal
Use a life insurance calculator when conducting a one-on-one conversation with a potential client. The calculator can be an effective tool in demonstrating how insurance can help them secure their future and that of their loved ones.
It is also a good opportunity to discuss how insurance can provide a long-term return rate for safe assets. Position life insurance as an investment that serves more than a single purpose.
Optional riders can be a strong selling point when pitching to single individuals looking to purchase insurance. Considering that no one can anticipate accidents, dismemberment, or disability, a long-term care insurance rider can provide the assurance that they have something to tap into when the unexpected happens.
Work with the Right Marketing Partner
When it comes to single clients, the same approach you use for married clients or those with a family may not suffice. The right marketing partner will help you formulate a unique approach that will get you the buy-in of single customers.
Get in touch with TR King Insurance Marketing. We rank among the most trusted insurance marketing companies offering IMO/FMO in Virginia and the nearby areas.
Whether you have your own insurance agency or work as an independent advisor, we’re here to help. Our services range from providing assistance in reaching out to your leads to giving you access to coveted products from highly rated national carriers.
With our help, convincing single clients that they need life insurance becomes a breeze.
Are you partnered with the right upline? Are they there to take your call? If not, we are. Call us today!
Key Takeaways In This Article
- Single individuals put off purchasing life insurance because they feel as though they don’t have any practical need for it right now. But now is the optimal time to buy, not later.
- Your young clients are at a shopping advantage if they decide to buy today, as life insurance is relatively inexpensive for younger individuals.
- No one anticipates accidents, sudden disability, or other health issues that require long-term care. But life insurance can provide a safety net in case such events take place.
- As an agent, you must be able to identify for your single clients how they can benefit from life insurance, even when they may not have beneficiaries or traditional responsibilities. You must help them realize that life insurance is valuable now and for the future, and that it can be used for multiple purposes.
Over to You
We'd love to hear your thoughts in the comments below on:
- Do you agree with the article? Why or Why not?
- Do you approach unmarried individuals or avoid them?
- What tactics do you use when you are faced with a client that is single?
If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!