A presentation at last week’s MDRT 2010 Annual Meeting highlighted how essential it is, more than ever, for advisers to maintain regular contact with their clients, or risk losing them to competitors.
In demonstrating this point, CommInsure’s Executive Manager, Business Growth Services, Jeffrey Scott, took his audience on the life journey experiences of a single client and his family.
As Mr Scott took advisers on this journey, he pointed out two critical statistics:
- With the different types of products now available, it is believed people now buy insurance an average of 12 to 15 times during their lives
- More importantly, the first policy they purchase is never the largest
The presentation highlighted the range of solutions available to people as their different needs evolved over time, and that “… there are more opportunities than ever to help clients during the different stages of their lives.”
While the market is familiar with groups such as Baby Boomers, Gen X and Gen Y, Mr Scott highlighted six different life stages and the insurance needs typically associated with each of those stages:
Starting Out
Typically aged 18 to 29, this group has an attitude that sickness and injury won’t happen to them.
Mr Scott says advisers need to convince prospects and clients in this group that disability income and critical illness insurance will protect their lifestyle. This is also a good time to purchase life insurance, even if the client only agrees to a small policy at this time.
Mature Singles/Couples With no Dependents
Usually aged 30 and above, this group are wealth accumulators, working toward saving for their retirement. They have a lot of disposable cash, and they choose to spend it on:
- Personal image
- Leisure
- Travel
Life insurance allows these clients to keep accumulating wealth and not dip into their savings should they get sick or injured. With health and income being their main concerns, disability and critical illness policies are a natural fit.
Young Families
This segment is usually aged 25 – 45 and consider themselves to still be very young. Their main priority is providing for their family, and typically have large mortgages.
Mr Scott said that a recent survey found 70 percent of respondents reported that, if they were sick or injured, they would have to dip into their savings to survive.
This would be good time for clients to consider various child insurance options, said Mr Scott, and to increase the existing life and disability sums insured on these client’s policies to protect the breadwinner’s growing income.
Established Families With Older Children
This segment is 35 to 55 with teenage children. Their disposable cash is limited by their children’s expenses and are very aware of the importance of their health.
Income funds the lifestyle of the whole family, as well as savings for future adventures and retirement savings, while “Boomerang children” (adult children who return home from school or after a divorce or job loss) are also becoming more common.
Mr Scott asks advisers to consider having their clients pay for disability and critical illness policies for these adult children, which cost far less than the care and financial support required if they are seriously injured or ill.
Empty Nesters
Empty nesters are still working and have paid off the majority of their mortgage. Putting money into retirement savings is their main priority. They are focused on:
- How quickly they can get to retirement and, more importantly:
- How they can protect what they’ve already got
They provide moderate levels of financial support to their children and are finally free to treat themselves.
According to Mr Scott, disability insurance will protect their income so they can enjoy themselves while still providing for their retirement.
Retirees
In this last consumer segment, Mr Scott emphasises that if consumers do not have adequate insurance throughout their working life, they will need to draw on investments and savings to support themselves and their families in retirement.
