WS: When it comes to reviewing term life insurance needs, there are a few key life triggers that standout. Traditional triggers include getting married, buying a house or having kids, but it can also be when someone gets a big raise at work or if signing (or guaranteeing) private student loans.
That said, as pricing for term life insurance is in part based on age and health status, it might make sense for some in their 20s or 30s to consider purchasing a term life insurance policy sooner rather than later, even if they don’t have a traditional need in place.
FTA: Why is it important to get financial advice from the outset?
WS: While it is easier than ever to purchase a term life insurance policy directly, talking to a qualified financial professional can help individuals identify how all of their individual policies and financial protections work together and where there are any gaps.
They can then provide guidance and advice on how to close those gaps, in order to prevent being financially unprepared for any of life’s surprises.
Additionally, some types of insurance, like an income replacement term life insurance policy, might only be available for purchase via qualified financial professions, whether a bank or insurance broker.
It is only by talking to a financial professional that someone would be able to close this gap in their coverage needs.
FTA: How can advisers (and families) start these ‘difficult’ questions about end-of-life planning?
WS: Actually, the holidays can be a great time to have long-term planning financial conversations.
According to a recent survey by Haven Life, individuals said the holidays were a good time for these tough conversations because they are often better had face-to-face (59 per cent); can be done without being rushed (42 per cent) and can benefit from others - including friends and family members - providing support (27 per cent).
FTA: Have you got any top tips for these discussions?
WS: As these conversations unfold, there are a number of simple ways to help individuals act on the discussions. Some tips include:
- Set aside one hour to review options, especially as many life insurance policies can now be purchased in minutes and without the need for a medical exam.
- Review what benefits and coverage individuals already have in place, if any, through their employer. That can help determine how much additional coverage they might need.
- Think about what related services they could benefit from now, including trust and will creation, end-of-life planning or secure digital document storage. Some life insurance agencies will provide these types of services via partnerships to policyholders at no additional charge.
- Consider who they want as their beneficiary and, once purchased, give them the gift of financial security as a (belated) holiday present.
- According to the survey, individuals said the most popular terms they would use to describe receiving the gift of life insurance from a loved one would be “surprising” (33 per cent), but also “well-intentioned” (33 per cent) and “thoughtful” (26 per cent).
simoney.kyriakou@ft.com
