How do we talk about life insurance now?

One of the questions we’ve been asked by a lot of Advisers is, how do we talk about life insurance now? Has it changed as a result of COVID-19?

Well, yes. Significantly.

The role of Life Insurance hasn’t changed but many people are finding it much easier to imagine a world where they need it. The reality of the bushfires (which claimed 26 lives) and COVID-19 (which is at 102 and counting) may be easy to dismiss statistically, but the media focus should at least get more people thinking about the possibility of tragedy happening to them. All too often, the GoFundMe cases could have been avoided if they had planned ahead.

But here’s where we do need to do more education and Insurers have a role to play. Life Insurance isn’t just about protecting your life, it’s also about protecting your lifestyle. Despite 1.6 million Australians losing their income as a result of COVID-19 (according to the ABS) many people are still unaware of the range of insurance products that protect you for job loss, or job loss as a result of injury or illness. For example, Income Insurance can protect you if you were unable to work due to illness or injury. Recovering from a loss of income while also having additional medical bills would be terrible for your average Australian, who’s household debt is around 200% of income. In fact, we have the highest household debt of any country in the world.

Clients now know the importance of being prepared.

The key point you should discuss with clients around life insurance is: We now know firsthand how scary it is to not be prepared. When COVID-19 hit and you couldn’t get the food supplies you needed, or toilet paper, or see loved ones. When you couldn’t travel, or have freedom of movement, and were confined to one space. How did that make you feel? When you didn’t have the resources to comfort your family, to protect them. What was that like?

Being confined, being restricted, being limited in choice, not having the right resources. These are not things limited to COVID-19. Ask anyone who has had to deal with the loss of loved one, or care for someone permanently disabled, and they will be able to tell you about all these things.

These are the conversations we need to have with clients. This is how we’re going to be able to protect them.

Time to think.

The other poignant consequence of COVID-19 is that the time we have spent at home has given many of us a lot of time to think about what truly matters. The things that we value and want to protect are much more in focus now than ever before. And if nothing else, that’s at least worth having a conversation about.