Life insurance has historically been sold by the life insurance carriers as a “need” product. They start by offering a “needs analysis” which looks at a family’s needs and obligations, and then they subtract their liquid assets to determine the amount of life insurance one might need.
This “needs” analysis then dictates the minimum or least amount someone should have in force in the event of an untimely death. At Circle of Wealth®, we like to think about life insurance a little differently.
If you don’t want something and yet you need it, how much are you willing to pay for it? Probably not very much.
In contrast, if there is something that you do want, how much then are you willing to pay for it? Whatever it costs.
When you discuss life insurance with your clients it’s important to talk about how much they “want” not how much they “need.” The difference between needs and wants is quite pronounced; and people move in the direction of their wants much more rapidly than their needs.
The Circle of Wealth® has a conversation, Needs vs. Wants, that discusses life insurance as a “want” product rather than a “need” product.