Learning to manage finances and plan for a secure future can be one of the most difficult challenges of adulthood. Consumers often receive conflicting advice from a variety of sources, and the changing financial tools available make staying knowledgeable and up-to-date on financial options and best practices overwhelming for many Americans. One role agents can play for their clients is to understand the misconceptions and uncertainties that prevent consumers from accurately assessing their own needs and options.
Life Insurance Misconceptions
Americans have numerous misconceptions regarding life insurance, according to data revealed in a 2019 Insurance Barometer Study. For example, over 50% of Americans think the cost of a term life insurance policy is three times (or more) than its actual cost.1 This is particularly prevalent among Millennials, who overestimate the cost of life insurance by almost $900 per year.1 For many individuals, there are life insurance options that meet their biggest planning and protection needs, but, without the assistance of an agent, it is unlikely that individual Americans will take the time to find a plan that works for them. Insurance agents who are proactive about educating consumers and correcting misconceptions add value for their clients.
Life Insurance Complexity
The abundance of misconceptions may be tied to the perceived complexity of life insurance plans and purchases. Most consumers believe purchasing life insurance on one’s own is nearly as complicated as doing taxes.2 54% of people selected “Purchasing a life insurance policy” as complicated, while 66% marked “Doing my taxes without the help of accountant” as complicated.2 Both life insurance and taxes involve financial understanding and extensive regulatory information, which contribute to the complexity.
Similar to tax professionals, insurance professionals are available to help clients work through the financial planning process and provide them with relevant consumer education materials. Although there are more resources available to consumers than ever, people may lack the motivation needed to study the factors and variables impacting their insurance needs and opportunities on their own though.
A trained and qualified insurance agent will work with clients to reveal and correct misconceptions and clarify complexity. At Simplicity Life, we believe in training agents so that they are prepared to meet the multi-faceted needs of their clients. For more information on our training and services, contact Simplicity Life today by calling 800.921.3100.
2 Americans Find Life Insurance Nearly As Complicated As Taxes, Insurance News Net