A Very Real Need For Insurance
There are two important factors relating to the sale of all insurance: the consumer's knowledge of the product and the consumer's level of awareness concerning her own needs.
For many of the policies I sell, such as automobile and homeowners insurance, my clients have a general understanding of the product. They also have a relatively high awareness of their need for these coverages. People also generally know what life insurance does. However, for many reasons, the level of awareness about the need-and the urgency of that need-isn't as high as with products that insure tangible, material items.
It's most important to understand that just about everything depends on your income. It's your income that provides all of the other assets you enjoy and insure: your home, car, and personal property. Unless your income is protected in the event of your death, these assets aren't protected-even though they may be insured.
It might be helpful to know just how much your total income would be from now until your retirement. For example, if you're currently making $50,000 a year and you're 30 years away from retirement, the total of your annual income, assuming a 4 percent cost-of-living increase per year, would be $2,804,247. Or, if you had only 10 years until you retire, the total would be $600,305. These figures are important because they represent a starting place for how much life insurance would be necessary to protect your family. The "needs analysis" is basically a balance sheet. List your needs: final expenses, debts, emergency fund (three to six months of income), housing costs, childcare, education fund, etc. Then list your assets: cash, investments, retirement accounts, present life insurance death benefits, etc. The difference between your needs and your assets is the additional dollars needed-life insurance.
The next step would be to decide what amount of money you could put aside each month to buy this protection and then what type of policy you should have. It's imperative that you not wait because your insurability may change, premiums may increase, or death may occur without life insurance protection. There are some new, exciting life products being offered today. Now's the best time for life! TPW
For many of the policies I sell, such as automobile and homeowners insurance, my clients have a general understanding of the product. They also have a relatively high awareness of their need for these coverages. People also generally know what life insurance does. However, for many reasons, the level of awareness about the need-and the urgency of that need-isn't as high as with products that insure tangible, material items.
It's most important to understand that just about everything depends on your income. It's your income that provides all of the other assets you enjoy and insure: your home, car, and personal property. Unless your income is protected in the event of your death, these assets aren't protected-even though they may be insured.
It might be helpful to know just how much your total income would be from now until your retirement. For example, if you're currently making $50,000 a year and you're 30 years away from retirement, the total of your annual income, assuming a 4 percent cost-of-living increase per year, would be $2,804,247. Or, if you had only 10 years until you retire, the total would be $600,305. These figures are important because they represent a starting place for how much life insurance would be necessary to protect your family. The "needs analysis" is basically a balance sheet. List your needs: final expenses, debts, emergency fund (three to six months of income), housing costs, childcare, education fund, etc. Then list your assets: cash, investments, retirement accounts, present life insurance death benefits, etc. The difference between your needs and your assets is the additional dollars needed-life insurance.
The next step would be to decide what amount of money you could put aside each month to buy this protection and then what type of policy you should have. It's imperative that you not wait because your insurability may change, premiums may increase, or death may occur without life insurance protection. There are some new, exciting life products being offered today. Now's the best time for life! TPW