Telling a heavy smoker who is looking for health insurance that because of their lifestyle their premiums will most likely be higher is never an easy conversation. As a result, many advisors shy away from these tough discussions for fear of making clients uncomfortable.
But in doing so, agents become “order takers” who are only providing a product, not a long-term solution. By facing these conversations head-on, you can dig deeper into a client’s life goals and build solutions that set them up for life-long success.
From the first meeting with a prospect, it’s imperative to set the tone. Many advisors make the mistake of asking, “What can I do for you?” But since most people aren’t sure what they need, this question often yields vague results. Instead ask, “What are the most important elements of your life?” or “What kind of life do you want to live?”
By doing so, you might learn that the client’s goal is to retire and spend more time with their grandchildren, which means you can begin to shape a financial strategy to help them accomplish this. Asking these questions also establishes that, as the financial architect of their life, your role will be to recommend long-term solutions that will help them reach their future goals, not just provide a product.
With that foundation laid, tough conversations will be easier, but you’ll still need to approach them strategically. For example, you could tell your client that if they stopped smoking, they can reduce their premiums.
However, such a direct approach often has little effect. Instead, anchor the solution back to the client’s stated goal. Tell them that statistically, premiums are higher because heavy smokers have more health complications than non-smokers. Then, remind them of their goal to spend more time with their grandchildren and ask them if smoking will achieve that. These are challenging but important conversations.
If your client decides to stop smoking, demonstrate the impact by running two budgets for clients trying to quit. One budget showing that if they’re cigarette-free in a year, they’ll be able to save $40,000 on their future premiums. And another showing what insurance will cost should they keep smoking. Using hard numbers paints a clear picture and provides another strong incentive.
By pinpointing what your client actually values, you can use the tools and strategies at your disposal to better advise them toward long-term life and health solutions. Clients will appreciate your transparency and expertise, safe in the knowledge that your guidance provides them with the capability and confidence to live their best life.
Gino Saggiomo, CFP, SSA, is principal of Rothgard Financial Partners in Brisbane, Australia. He is a 12-year MDRT member. He has been on the Beddoes Institute Most Trusted Advisor list since 2013 and was awarded the 2016 National Value of Advice award.