Hey guys we’re going to talk about how to respond to a client when they say i cannot afford insurance or insurance is a waste of money. I’ve done objections videos like this in the past but today i want to dive deeper to help you better understand the thought process behind handling these objections. So without further ado let’s get today’s lesson started.
Overview of What You Are Going to Learn
Here’s what we’ll be learning today. We will start off with understanding why clients say they can’t afford insurance. We will then learn the three approaches i would like to use to handle such objections so they are approach number one is emergency cash and multiple sources of income. Approach number two worst time to fall sick right now. Approach number 3 insurance can only be purchased with your health. So let’s start small sounds good.
Let’s Relook At Objection Handling Process
Let’s get started off with understanding the mindsets that clients have when they say they can’t afford insurance. Usually when a client says they can’t afford insurance there are four reasons.
Reason one they really can’t afford it because they have just lost their job or they are really short of cash.
Reason number two they can afford it but wanted to say can’t afford as a way to reject it.
Reason three they thought they cannot afford it because they assume insurance is expensive.
And reason number four you have not provided enough reason for them to see insurance as an important milestone in their life.
So let’s take a look at what kind of approach i would use for these different reasons.
Reason #1: They Really Can’t Afford It Because They Have Just Lost Their Job or They Are Really Short of Cash
For this group of clients or prospects my personal suggestion is to keep in touch with them and be there for them. Their first priority is for them to have an emergency cash of three to six months to pay off their daily expenses and if finances allow go for a small amount of health insurance income protection and life insurance policy. As a financial advisor our role is to make sure our recommended proper financial planning to them and affordability in my opinion is based on the multiple of the income. So be there for them and when they one day can afford it i’m pretty sure they will come up first in their mind because you were there for them when they needed you the most.
Reason #2, #3, #4: Your Role as an Advisor Is…
For reason two three and four your role as an advisor is to help your clients see a new perspective of why they need insurance in the first place. To help you with it i have prepared three approaches so let’s take a look at all of them together.
The 3 approaches i would use to handle such objections:
- Approach number one emergency cash and multiple source of income
- Approach two worst time to fall sick right now
- Approach number three insurance can only be purchased with your health
So let’s start small.
Approach # 1: Emergency Cash & Multiple Sources of Income
Okay so when it comes to cash right one of the things that you have to understand mr client or ms client is i actually agree with you you definitely need to have emergency money on the side but there’s a quantum on how much that is and that is six months of your expenses right. So six months of expenses have them in cash anything more than that you’re holding too much liquidity right. You’re losing out an opportunity of being protected now.
If you have more than that you should start investing that so that it can start creating an income stream for you if not today in the future. So the most important thing today is building multiple income streams. So some people buy property and get rental income some people might buy a bond and get coupons somebody might buy stocks and wait for dividends. Have multiple streams of income. Insurance is one more stream of income. You can have a product like an annuity. Annuities give you a stream of income right. So start building streams of income the more guaranteed the better it’s as simple as that.
And that’s how i would handle it that yes you need to hold cash but not more than six months. Anything more than that you should be focusing on income strategy not hoarding cash.
Approach # 2: Worst Time To Fall Sick Right Now
The other most common objection that i’m anticipating that you might hear because i’ve also received this objection a lot. Sanjay things are not looking good and i don’t think i can afford it right now. Mr client i’m so glad you told me that you know we have a problem with affordability but let me ask you a question.
You see this is the worst time in history for anyone to fall sick or die because this time if you fall sick you would be sick alone your own family and friends cannot even come to support you. If you die you will be dying alone your family cannot be there for you. That is the reality of the world today. This is the worst time to be either falling sick or dying because your entire support system is isolated from you. Your family cannot visit you your friends cannot visit you nobody can come to take care of your family in case something happens to you today.
This is the worst time in history to fall sick and die. One of my clients just passed away last week. Very wealthy man nobody could attend his funeral. His entire funeral was done on zoom. Nobody could be with his family his own family couldn’t attend the funeral. I feel so sorry for him because he was a very nice man amazing guy fantastic person. But he did die and this is the worst time to be dying because your own family and friends cannot be with you.
I understand it’s going to be difficult for you to afford it let’s find the right way to pay for it right we’ll figure that out but we need to do it because your family needs money cash today more than ever before if something happened to you. We need more cash today than ever before and that’s the reality of the world.
Approach # 3: Insurance Can Only Be Purchased With Your Health, Let’s Start Small
I don’t have enough money for this. Buying insurance is just a waste of time a waste of money. Mr client i understand you don’t have enough money and you feel that probably is a waste of money but let me ask you this question.
As long as you have income right there’s no problem but the day you cannot work my job is to just replace the money that you would have otherwise earned. You see insurance is an absolute waste of money till you need it but the day you need it if you don’t have it that’s the problem.
Because every client that i work with right they tell me the same thing they’re like sanjay why do i need insurance. The why is very simple. Insurance is a waste of money till you need it. It’s better to have insurance five years early than to have it one day too late because you probably can’t get it.
You see insurance can only be purchased with your health and your age. It has nothing to do with how much money you have. Insurance can only be purchased for two factors your good health and your age. If you’re too old you can’t buy it if you’re unhealthy you can’t buy it. It’s as simple as that.
Think about every single client that i work with once they realize this they’ve always bought it. So the question is are you healthy. That’s your first question that you have to answer. If you’re healthy we can continue to talk if you’re not healthy let’s not even have this conversation. Simple.
Final Thoughts
I hope this has provided you with better clarity on how to overcome the objection of i can’t afford it.
Remember being a financial advisor is not the most celebrated career but i truly believe if we can all do our part to help everyone around us to stay protected and understand the importance of insurance one day everyone will understand how important insurance advisors are. So keep doing a good job and let’s get more people covered with a peace of mind.