One of the hard parts of being an insurance agent is getting people to have an honest conversation when it comes to their finances and how their situation affects future decisions. Some clients either don't want to discuss their goals or simply have not taken the time to figure out what their goals are.
There have been many times when I have sat down with someone and asked, "Where do you want to be three years from now?" The look on the client's face is priceless. They really don't know. I'm not trying to embarrass them or make them feel bad, but the point of the conversation is that many people are just meandering through their financial issues, paying bills as they come in and buying stuff when they have money put aside.
Just as you would think, most people don't have a clue what their goals are. They say that they haven't really considered it before. Here's an exercise you can do (it's the same one I use with my clients) and it will help you make a game plan.
Take a sheet of paper and put today's date at the top. Next to that, put the same date but three years from now. Underneath the dates make three columns, with headings "Personal, Professional, Financial". Under each heading just write what you want to happen within the next three years.
There are no wrong answers. I've had people give me all kinds of answers from saving $100,000 (financial) to owning a new boat (personal). One lady who was a cosmetologist put "open a cosmetology school" under the professional heading. Knowing what the goal is helps tremendously but that is just the first part of the conversation.
Then I ask what would happen to that goal if the client were to die unexpectedly or to become chronically ill. Will they still be able to reach those goals if a potential landmine were to get in the way?
Every once in a while one question will get the client to open up and that question is "What keeps you up at night?" As a husband and father, there have been many times when I have lain in bed thinking about retirement, sick family members, paying for my child's education and a long list of other issues that can, and probably will, show up down the road. It can be overwhelming.
Another part of this is that people will hear advice, through friends or the media, which may sound good, but may not be applicable to their situation. One of my pet peeves is "financial gurus" giving generic advice. A single dad who makes under $50,000 a year and has a sick parent will have an entirely different situation than a married couple who have a six-figure income and no debt. Much like fingerprints, no two financial positions will be the same.
When I sit down with someone and they say they want a 20-year term life insurance policy for $100,000, I ask questions like:
- How did you decide that was the amount of insurance you needed?
- Will that cover any debt you have, including your mortgage?
- Will that amount replace your income?
- What do you want to accomplish with that amount of coverage?
Don't let this stuff stress you out. Sit down with your agent or make a phone appointment to discuss how you can do what is best for you and your family. And in the meantime, please stay healthy!
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
