Life Insurance Needs in Less than a Minute
November 19, 2019 by Chris Kite
If you could present an accurate needs analysis in less than a minute, would you sell more life insurance? I once presented at a Life Office Management Association (LOMA) conference to illustrate how quickly you can get a dynamic look at a client’s life insurance needs using a simple multiple of income method. It can be more accurate than the traditional method that reduces the need by the net worth.
Although agents often use a multiple of income methods, it’s viewed as a crude approach to be used when you don’t have the time to do a full traditional analysis. A full analysis includes gathering data on assets and liabilities. It takes time and trust to do this fact-finding. Agents should plan to gather this data, but it can be done after first determining the basic need for life insurance protection. The key is to adjust the multiple based on a planned retirement age and to look at the death benefit in excess of cash value.