Begin with the job coverage must do
A useful life insurance conversation starts with purpose, not a product name. Ask what financial obligations would continue if the insured person died: household income, mortgage payments, care responsibilities, education plans, final expenses, debts, business obligations, or support for a family member with ongoing needs. The NAIC Life Insurance Buyer’s Guide encourages buyers to consider income, obligations, dependents, and existing resources.
Identify people and time horizons
Discuss who depends on the insured person and for how long. A temporary income-replacement need may look different from estate liquidity, final expenses, or lifelong support. Confirm beneficiary intentions and explain that beneficiary designations should be reviewed after major life events. Avoid assuming that marital status or income alone tells the whole story.
Inventory existing protection
List individual policies, employer benefits, survivor benefits, savings intended for the same purpose, and business coverage. Employer life insurance can be valuable but may change when employment ends. Review ownership, beneficiaries, amounts, portability, conversion rights, and whether current coverage still matches the intended job.
Separate death benefit from premium
Coverage or face amount generally means the death benefit, not the annual or monthly premium. Confirm the desired benefit and then discuss what premium level is realistically sustainable. A policy designed for decades is only useful if the owner understands how premiums may work and can maintain the coverage under the contract’s terms.
Compare product mechanics carefully
Term, whole life, universal life, indexed universal life, and variable life can address different needs and carry different guarantees, costs, risks, and flexibility. The SEC’s Investor.gov explains investment risk in variable life. Illustrations and current assumptions are not the same as guarantees. Review the actual contract and required disclosures.
Document the conversation
Record the goals discussed, information provided, alternatives considered, unanswered questions, and materials delivered. Do not reduce a complex conversation to “client wanted cheapest option.” Clear documentation helps future reviews and gives the client a useful record when circumstances change.
Important note: Carrier requirements, policy language, compensation arrangements, licensing rules, and state requirements can change. Use current carrier and regulatory materials, document the source reviewed, and consult appropriately licensed or qualified professionals before acting on a specific situation.