Sunday, February 20, 2005

Moral Obligations: The Art of Selling Life Insurance

"To carry adequate life insurance is a moral obligation incumbent upon the great majority of citizens." (FDR)

As a financial planner, a bulk of my business revolves around life insurance policies. I find my clients everywhere--from the local Starbucks to the NYC Subway to hospitals deep in the Bronx. My last two clients included a fireman saving for his daughter's college education and an owner of a farm in PA who was seeking income replacement and cash value accumlation in the event he should pass prematurely. My career sounds picture perfect, right?

Think again. Just as I did when I was in pure brokerage, I have to go out there on the streets and FIND my clients. Except this time I'm using less of the telephone and more of my personality. Meeting people is step one--step 2 involves convincing them to sit with me, hear me out, and hopefully buy an insurance policy with me. The art of course lies in listening--the less I talk, the better job I'm doing b/c whatever solution I come up with will be specifically tailored to their needs, hopes, and dreams. The glory comes after our sitting and I'm back in the office preparing the case for underwriting. This is when both my client and myself feel good about what we've secured for the future.

There is zero doubt in my mind that (enough) life insurance is the cornerstone of any sound financial game plan--Insuring oneself is the important thing a breadwinner could do. If anyone you know would be financially impacted by your passing--whether it be a sibling, spouse, child, or parent--life insurance calls you. Sing back to it--you'll sleep better at night knowing you did. I was elated to find a riveting article in last week's Business Week
Life insurance may be the most badly purchased financial product. Some people, unwilling to face the thought of death, never buy coverage at all. Others feel guilty about the prospect of leaving loved ones behind and buy too much...Choosing the right amount of life insurance is no easy matter...According to economists, your family's financial goal should be to enjoy the highest standard of living possible over a lifetime. That may mean borrowing when you're young and repaying the loans as you age and earn more. Given your total lifetime income, you don't want to suffer in youth and live high on the hog in old age, or vice versa. That's where life insurance comes in. If you die, the death benefit to your survivors should be precisely large enough so they enjoy the same living standard as they did while you were alive. Life insurance protects your family if you die young. It goes hand in hand with investing for retirement, which protects you against the opposite risk: that you and your spouse will outlive your savings.

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