The first thing you’ll learn: misperceptions abound Consumers overestimate the cost of life insurance by more than 300%. 1
What about Mortgage Protection Insurance?
If you’ve built your business around home and auto, explaining the benefits of life insurance can feel daunting. Often, customers wonder if they even need a policy, and many people have group life coverage at work. But that coverage is rarely enough—typically just 1x or 2x annual salary. And leaving a job usually means leaving that policy behind, making this benefit more of a nice-to-have than true protection. A life insurance face amount ‘rule of thumb’ is 10x annual salary. Add up the cost of a mortgage and other debts, ongoing expenses, and future goals such as college education and retirement, and you’ll see why. Many clients balk, assuming they won’t be able to afford life insurance—until they go through the application and see the quote. According to LIMRA, consumers overestimate the cost of life insurance by more than 300%. Most millennials overestimate the cost by 5-10 times! 1 With today’s digital options, your clients can find out the true cost right away and get a policy in minutes, presenting your business with a game-changing opportunity.
Many lenders offer mortgage protection insurance (MPI) to homebuyers, which covers the mortgage payoff amount if something happens to the lienholder. Problem is, MPI proceeds only cover the mortgage, and are paid to the lender—not the family in need. Term life insurance generally offers higher coverage amounts and gives beneficiaries the flexibility to use the policy proceeds as they see fit.
Is coverage through work enough?
Work coverage
‘Rule of thumb’ coverage
1x
2x
3x
4x
5x
6x
7x
8x
9x
10x
11x
12x
1 2021 Insurance Barometer Study, Life Happens & LIMRA
Salary coverage
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