Life insurance conversations are difficult. Not only is the landscape in Australia complex and intimidating to those who are not experts, but conversations with advisers that are centred around various worst possible situations (and to some extent, one’s own mortality) are unpleasant, especially when putting monetary value on it.
“Insurance can be an uncomfortable conversation to have. We’re talking about our own mortality, our morbidity – what might happen if something happens to us or a loved one,” Paul Luu, financial adviser and life insurance specialist at Evalesco and Principal Edge, told the latest episode of the ifa Show podcast.
“It’s a difficult conversation for a lot of people, and when you add that to the complexity of insurance products, people don’t know where to look or where to start, so it often gets pushed aside.”
However, a commonly forgotten aspect of life insurance for Luu is the legacy protection it offers. Medical debts, if someone is uninsured or in a bad premium, can take potentially decades to repay, and in the situation where someone passes away, that debt can fall onto the shoulders of spouses and children.
As Luu puts it, life insurance is not just about protecting yourself financially now but ensuring it does not impact your loved ones, too.
“What we try to do is have that conversation where it’s not just about clearing debts and medical expenses and things like that. It’s about what impact that has on your family’s future,” he said.
“We talk about what your aspirations are when it comes to your children, what you’re trying to achieve in terms of your own growth and wealth accumulation, and what you want to be able to provide for your family.”
Luu added: “So it becomes a conversation about not just basic protection – that has its place, of course – but we try to frame the conversation about insurance as a promise. Taking out the right cover means you’re making a promise of duty and care to the people you love the most.”
Though it may seem corny, Luu highlighted that framing a good life insurance policy like an act of love is a good way to help clients engage with the process.
“Wherever we can, we frame the conversation as an act of love, more than a grudge purchase about ‘I have to do this’. It’s something you do for the people you care about the most,” he said.
“In that sense, it’s not only about protecting current circumstances, but protecting the legacy of your family and what you had always hoped to be able to provide.”
This framing should hopefully make a client more comfortable, and the more comfortable the client, the more likely they are to give you the information needed to direct them to the best policy for their needs, factoring in influences such as lifestyle, family dynamics and current health.
“The insurance can be tailored so that it not only provides the right protection for now, but also takes into consideration their broader financial objectives as well,” Luu stated.
To catch the full episode of the ifa Show, click here.
