To simplify the process for first-time buyers, consider providing a simple, five-step outline upfront so they know what to expect. Let the client know that you will help them: determine what’s important, compare types of life insurance, choose a policy, apply for life insurance and put the policy in place.
Here’s a sample checklist that may come in handy when working with clients buying life insurance for the first time.
1. Determine what's important
Let your clients know that the discussion will begin with assessing their needs. They should be prepared to share their reasons for purchasing life insurance and what they expect it to do for them and their loved ones financially.For example, they may just need a policy that could take care of burial expenses. Or, they may have a bigger vision that involves creating a legacy of wealth. Asking about their needs will help shape the next part of the discussion: which type of policy to choose.
2. Compare types of life insurance
Once you’ve set the groundwork, you can introduce your client to the basics of how various types of life insurance work. For instance, you may explain the difference between term and permanent coverage first. From there, you could dive into the nuances of universal life insurance versus whole life insurance or how indexed universal life insurance works.In discussing policy types, it’s helpful to anticipate questions that your client may have. For example, they may be interested in how term and whole life compare from a premium perspective or which policies offer cash value accumulation and what it can be used for.
3. Choose a policy and beneficiaries
Remind your clients that you will be available every step of the way when it comes to choosing the right policy and if any available riders may be beneficial to add. Make sure your clients are prepared to name their beneficiary or beneficiaries and understand their options for doing so.4. Apply for life insurance
A life insurance application can be overwhelming for clients who haven’t been through the process. At this stage, be sure your clients understand the types of information they’ll need to provide in order to apply and what forms are required. You should also cover the details of the medical exam so there are no surprises for your client later.5. Put the policy in place
Let clients know that you will explain how underwriting works and how long it typically takes for a policy to be reviewed. You should also discuss the free-look and grace periods. Lastly, make sure clients understand how to make their initial premium payment and are prepared to make their ongoing payments on time moving forward.
Read more about what your clients should know about shopping for life insurance.
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