Frazzled, cash-strapped life insurance leads with a new baby? This is the last place you should focus your sales prospecting and cold calling efforts, right? Wrong.
Life insurance leads with a new baby or the potential for newborns in the home are a golden opportunity for term life insurance. It’s just a matter of education and lead nurturing. Here’s why you should be prospecting for expectant couples and new parents and how to get started.
Perception Vs. Reality
As with many things, there’s a disconnect between what aged leads think they know about life insurance and final expense costs and what the reality is. A new report in the Atlanta Journal-Constitution says new parents are skipping coverage for the wrong reasons, overestimating policy cost and underestimating the benefits of being insured.
Life Insurance Perceptions
A Harris Poll was conducted as part of the report, asking couples expecting a baby or planning to have one in the next three years about anticipated costs. The survey found 30% of respondents guess that life insurance would be one of their biggest expenses, while slightly more — 37% — estimated child care would be a top expense. Half said diapers would be another big cost. But these survey takers were way off.
A $1 million, 20-year term life policy for two hypothetical healthy 30-year-olds has a $762 annual premium, according to the study. A year’s worth of diapers costs about the same amount — $743. But first-year child care cost more than ten times as much — estimated at around $8,000 per year, according to the study.
Final Expense Realities
On the flip side, many young families underestimate final expense costs — around $7,000 for funeral, viewing, and burial, according to the National Funeral Director’s Association. Beyond the immediate costs of final expense in the midst of a family’s grief, there’s also the long-term fallout from the death of a young parent. Lost income, college savings, a change in standard of living. These are all issues that not enough young parents and parents-to-be are thinking about. And there’s not a good reason not to.
Bottom Line for Aged Leads
The bottom line for these aged life insurance leads and the agents prospecting them is this: healthy young parents can indeed buy generous term life coverage for about the same as the cost of diapers.
Life Insurance Is Affordable
So what if a young family can’t afford a $64 per month ($762 per year) premium for a $1 million, 20-year policy? Well, there’s plenty of wiggle room there for still good coverage. For example, a $500,000 policy could provide for many of the essentials of raising a child and sending them to college, while saving on the premium.
Term Life At Its Cheapest Now
Another factor: term life is at its cheapest for leads right now, while they are young and healthy. For young families and everyone else, term coverage gets more expensive as you age and develop health conditions. Young parents have quite the incentive to buy now since they can lock in their low rate for the length of their policy.
Seizing This Aged Lead Opportunity
For any agent looking to grow their life insurance business, life insurance leads with a new baby or the potential for newborns in the home is a great opportunity. Aged life insurance leads offer an even better return on investment, considering the low cost of leads.
If you are interested in targeting the young family demographic, there are ways to filter and purchase leads in this demographic. Consider age, between 25 and about 35, zip codes, particularly those with good schools and lots of young families, and even the coverage amount and policy type selected on quote requests. If you already have a full pipeline of leads, consider sorting your leads along these same parameters to find term life prospects.
Far from being a lost cause, this demographic has a lot of potential for life insurance sales. With a lead and nurturing strategy targeted to educating and working with these folks, you have a great opportunity of taking your insurance business to the next level.
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