Have you ever had a life insurance salesperson call you before? It’s the worst, right? They ask you all sorts of uncomfortable questions like, “What would happen if you died,” and “How much money do you want your ungrateful spouse to get when you pass away?” OK, so maybe I ad-libbed that last part.
But if you ask any decent financial planner, they will tell you that life insurance is an integral part of a good financial plan. So why is it so painful to discuss and purchase? Aside from the obvious part about insuring your death, life insurance provides no tangible benefits in the short term. You can’t take it home and play with it. You can plug it in to the wall and make cocktails with it.
You have to file your contract in your cabinet and continue your life doing everything possible to avoid looking at it again (or having anyone else look at). Further, life insurance isn’t something you can brag about to your friends. It’s not like saying “I totally invested 3% of my salary into my 401k this month, international stocks are my pick!” No, you would have to say “So, yeah, I paid some guy some money in case I die.” And that’s not a fun conversation.
What doesn’t help is that every Tom, Dick, and Harry are invited to sell life-insurance by insurance recruiters. I’ll let you in on a secret: Life insurance sales people are very persuasive. They have to be, otherwise they don’t survive. And the most persuasive are invited to be recruiters. So when you graduate college or lose your job, leave it to good ole’ Slick the Life Insurance guy to recruit you into selling for him.
So you have a flooded market of under-qualified life insurance sales people marketing a product with no tangible benefits that is uncomfortable to talk about. What’s a reasonable consumer to do?
Find the most successful person you know and ask them who their life insurance guy is. Then go see him. Successful life insurance sales people have no hidden agenda because they’ve made it. They aren’t worried about selling their next case so they can put food on their table. And they won’t compromise their values in order to make a small sale.
To a newbie, your life insurance sale represents a lot of money. On a $1,000/year premium, the average life insurance salesman will make 50-100%. To a straight commission newbie, this is a lot of money. To a guy making $500,000 a year selling life insurance, that sale means virtually nothing. He will not try and talk you into a product you don’t need and he will give you sound advice. Sounds crazy, right? It is, but at the end of the day you always have to ask yourself about a salesman’s incentives. Successful people aren’t looking to build, they are looking to sustain. And sustainability in a profession of slime-balls is only possible through honesty.
You can just do a little bit of research on your end as well. You can just look for all the details that you want to know online. You can see what is life insurance average cost? What policy suits you better and how it is going to pay you back. With all these details you can talk to your insurance planner freely and more confidently.