Archive for June, 2010

Top 12 Mistakes Made by You, the Client

Here are a few of the major mistakes we as agents see clients make when purchasing life insurance.

How many of these mistakes are costing you time and money?

Top 12 mistakes people make regarding their life insurance

1. Blindly trust their advisor, any advisor

  • a. Many advisors specialize in gaining trust and selling product ONLY
  • b. Important financial decision for welfare of family
  • c. Mistakes can be costly (hundreds of thousands of dollars)
  • d. Use a specialist? Why not get a second opinion? Existing or new.
  • e. Get it in writing

2. Don’t know why

  • a. Only one true need

3. Make decision emotionally (100%)

4. Don’t use guaranteed products

  • a. Usually based on greed + unrealistic expectations and salesmanship and misunderstanding of how these things work (most advisors don’t understand on this stuff works either).
  • b. Buy wrong type. Illustrates well but can result in overpaying and losing insurance
    i. Examples include YRT Universal Life and enhanced Whole Life

5. Don’t optimize

  • a. See Life Guide survey
  • b. Calculate ROI

6. Don’t know what they’re buying

  • a. Get involved in grandiose schemes that they don’t fully understand (see 1. Above) and involve bank financing and/or complex tax strategies that can “blow up” if not carefully set-up (initially) and administered (on-going).

7. Misleading presentation

  • a. Purchase a policy without being fully made aware of their options and shown a market survey and

8. Double duty dollars

  • a. Cash accumulation doesn’t work. Double duty dollars.
  • b. Tends to result in overpaying for what you get

9. Don’t coordinate with other financial planning

10. Haven’t discussed their Bequest Preference

11. Don’t compare to alternatives

12. Don’t measure solution to determine viability and appropriateness


How to make sure you have the right policy.

1. I don’t know how much I have and why

2. I don’t know what type I have (3 types, some guaranteed, some aren’t)

3. I don’t know about structure (corporate) (beneficiary)

4. I don’t know if I’m optimized (cheaper, take advantage of features, understand what 300 contract pages say).


Biggest Mistake

1. Spend too much

2. Non guarantees that make insurance look good

3. Relying on salesman

4. Blind trust

5. Don’t put it in writing

6. If you don’t fix it early, you might not be able to

7. No on-going communication and reviews


What are most people not aware of:

1. Understand contract

2. No idea of how much and why

3. Understand different types

4. Short term focus/emotion

5. It’s part of a planning process

6. Dealing with unqualified people (knowledge is critical)