Life Insurance ownership is at a 30-year low. This leads to almost half of Canadian households saying that they need more life insurance. This is not surprising as there is a good probability that you have not been recently solicited to purchase insurance. I know that no one likes to be sold (including myself), but I would argue that insurance is one of those products that needs to be sold. Typically, when someone is urgently looking to buy insurance, something happened that triggered the buying process. A recent health scare is the most common trigger. Given that health buys insurance, it’s proven to be difficult to purchase insurance after a recent medical concern. A good broker can help you make insurance a priority while not putting pressure on you to buy. My approach to help my clients understand their options so they can make an informed decision on what to purchase.
Here are some reasons why you haven’t yet purchased insurance.
While you may understand the importance of life insurance, there is a good chance that you just have not gotten around to it. Makes sense, you are buying something that you don’t see yourself using in the near future. An unexpected medical crisis could make you ineligible for coverage. Just ask yourself – what happens to your family if the unthinkable happens?
- Not sure how much or what type of insurance to buy.
This likely means that you are part of the 47% of Canadians who never had an insurance broker. It can be daunting to even start the process to something we don’t understand. Insurance can be very complex, so make sure you work with an experienced broker who can help you make an informed decision. Many brokers practice needs-based selling that can help you determine the right amount and type of coverage for your situation.
- Don’t think coverage is affordable.
Life Insurance is likely less expensive than you think. $500,000 of term coverage starts at $25 per month for a 35-year-old male, non-smoker. Most individuals tend to overestimate the cost of coverage. Insurance pricing is based on age, gender, smoking status and health. The younger and healthier you are, the less the cost. Permanent life insurance is much more expensive as it would eventually pay out a death benefit – however, most arguably would not require $500,000 of permanent coverage. Majority of term insurance policies can be converted into permanent life insurance without any medical evidence if your needs evolve.
- Find the process intimidating
A top reason why so many depend on group insurance, mortgage insurance and simplified insurance is the ease to apply for coverage. This “ease” does come at a cost – many times a higher monthly payment and an increased chance of your claim being denied. While the application process may be invasive for traditional products – it is well worth it to ensure you receive a quality contract. Working with an experienced broker to coach you through the process and set proper expectations can make all difference.
- Don’t trust insurance companies or agents
Trust is the reliance on the integrity and ability of your insurance broker/company. If someone has good morals, but lack of knowledge – they could accidently screw you. If someone is very experienced, but lacks ethics – they could purposely screw you. Therefore, it’s important to work with a competent broker who you know has good integrity. Don’t hesitate to ask for references from the broker or ask your friends/family about who they use as their insurance broker.
If you’ve got a spouse, children, or a parent who relies on you for financial support, you should seriously at least consider some form and amount of life insurance. If you don’t already have a broker, feel free to reach out to me personally and I can help you understand your options. You can reach me at 289.455.1492 or firstname.lastname@example.org. I would be happy to provide references!
By Jeff Romansky
CHS, CPCA Principal, SecurePlan Insurance Solutions
Jeff started his insurance career in 2006 by helping hundreds of insurance advisors grow their business by providing them with comprehensive advice, consultation and training. After nine successful years, he decided to take his knowledge and start his own practice to ensure his clients are getting the best advice. His office is based in Grimsby, ON and he serves clients throughout Southwestern Ontario and the GTA.
*Source: 2013 LIMRA Canadian Life Ownership Study