Imagine this scenario: You know you need to get in better shape,so you decide to join a gym for the first time. You walk in thedoor and look out at a huge room with a vast array of machines,equipment and objects—and have absolutely no idea what any of it'sfor or how it works. No one greets you or offers to show you how touse the apparatus, much less asks you about your particularinterests or special needs. You notice a few other people who seemto be working out, but frankly, they don't look much like you soyou doubt you have much in common.

A lot of us would turn around and walk out the door at thatpoint, never to return. And unfortunately, that's the experiencemost Americans have with life insurance. They know they need it,but they don't know what kind or how much, no one is talking tothem about it, and they don't even know what questions or who toask.

The key is you don't sell life insurance. You communicateit.

A nation at risk

Americans remain dramatically uninsured—and underinsured—forlife insurance. In fact, life insurance ownership is at an all-timelow. A startling 41 percent of U.S. adults have no life insuranceat all, according to recent LIMRA data, and 43 percent of those whohave coverage admit it's not enough.

Both men and women are less likely to own life insurance todaythan they were in 2004. The odds of not having life insurance haveincreased dramatically for every age group since that time, andonly one in 10 insured adults owns both permanent and term lifeinsurance—half as many as in 2004.

This creates a nation of families who could be on the brink offinancial ruin if a primary wage-earner dies. For example, of thehouseholds that own life insurance, seven in 10 have only enough toreplace their household income for 3.5 years.

The general rule of thumb is to carry enough life insurance toreplace income for seven to 10 years. For those fortunate enough tohave employer-provided life insurance, many assume the relativelysmall amount of coverage it offers will be adequate for theirneeds, when in reality it often will pay for little more than finalexpenses.

Tally up the ongoing costs of mortgage payments, utilities,food, transportation, health care, clothing and all the dailynecessities of life—not to mention longer-term expenses such aschildren's college education—and you'll quickly see the gap incoverage.

Those without life protection are obviously at even greaterrisk, especially since 61 percent of American workers live paycheckto paycheck, and 34 percent of households admit they wouldimmediately have trouble meeting everyday living expenses if aprimary wage earner died today.

Why don't they buy?

Consumers are likely to delay the purchase of additionalinsurance because they have other financial priorities right now orfeel they can't afford it. High unemployment, reduced householdincome and increases in daily living expenses have caused manypeople to postpone their financial decisions.

They're not sure how to fit insurance premiums into theirbudgets on top of other priorities demanding their attention, afrighteningly short-sighted viewpoint.

But one of the main reasons people don't buy life insurance islack of knowledge. Many people put off buying life insurancebecause they simply lack the knowledge to make an informedpurchasing decision.

They don't understand what type of coverage to buy or how muchthey need. And when consumers don't understand theirchoices—especially the type of coverage they need for their ownpersonal situations—they're not likely to buy.

In fact, of those who say they need life insurance, 44 percentsay they haven't bought any because they don't know how much theyneed. And employers agree: Only 41 percent of employers in a recentsurvey said their employees understand the need for life insurancecoverage very well.

Life insurance isn't bought…

Clearly, there's a significant education gap when it comes tolife insurance needs. And the worksite is the ideal place to talkabout it. Insurance at the workplace is attractive to mostconsumers because of its reasonable cost. The majority of employeesprefer face-to-face interaction with an insurance or financialprofessional when purchasing insurance.

Of course, employers in today's economy aren't going to add totheir benefits costs by increasing the life coverage they offer orby paying for fee-based benefits communication services. But theyeasily can make this vital financial protection and customizedbenefits education available to their employees at no cost to thebusiness through voluntary life insurance.        

A top voluntary benefits carrier will offer one-to-onecounseling as part of its enrollment services at no charge. Thecarrier's benefits counselors can help employees understand theirbenefits choices—both core benefits and supplemental coverage,including voluntary life insurance. 

Most employers—and likely you, as well—don't have the resourcesto meet with every employee individually and explain the choices.And there's no need to incur additional expense paying anenrollment firm to do this when a voluntary insurance carrier willdo it for you.

Personal benefits counseling delivered in one-to-one meetingscan really make a difference. Surveys by Colonial Life of more than15,000 employees who met individually with benefits counselorsduring their enrollments prove the effectiveness of the one-to-onemethod.

Virtually all employees (97 percent) surveyed say personalbenefits counseling improved their understanding of their benefitsand that this type of communication is important (98 percent).Employers also find value in one-to-one benefits counseling. Almost60 percent of employers believe personal benefits counselingsessions can strongly improve employees' understanding of theirbenefits and their coverage needs.

So what's the message?

So how can you put this to work for your clients—and yourbusiness? Here are a few tips to keep in mind.

Recommend voluntary insurance. Voluntarycoverage is selected and paid for by employees. Employees choosethe coverage type and amount that meets their needs and pay for itthrough convenient payroll deduction. There's no direct cost to theemployer. Employees gain access to less expensive insurance thanthey could get on their own, which benefits them not onlyfinancially, but increases morale, satisfaction andproductivity.

Choose your partner carefully. Not all benefitscarriers are created equal. Be sure the partner you entrust withyour business has a strong needs-sell philosophy that focuses onhelping employees identify and meet their individual gaps. As Isaid earlier, life insurance isn't about selling. It's aboutcommunicating. Those in our industry who claim commissionedenrollers don't have this mindset have simply been working with thewrong companies.

Make it part of the annual benefits enrollment.Many consumers procrastinate and won't proactively seek outinsurance until they need it and it's too late. Half of thoselikely to buy life insurance in the next year say they just“haven't gotten around to it,” and more than a third of theseconsumers say they haven't bought life insurance because no one hascontacted them.

Include different types of life coverage in yourportfolio. Whole life, universal life and term lifeproducts have different features and work best in differentsituations. So do individual and group policies. Ask your clientsto make several options available so employees can select the mostappropriate coverage they can afford. For example, group term lifeinsurance is typically a lower-cost option that's simple to explainand understand. Guaranteed issue coverage usually is available,even for smaller groups. Some newer versions include options thatoffer additional coverage for travel, catastrophic events or otherspecial situations. 

After major medical coverage, life insurance is probably thesingle most important financial protection benefit everyoneneeds—and every employer should offer. With voluntary lifeinsurance products in your portfolio and an effective communicationstrategy in place, you can build your sales and help your clientsoffer the basic protection every American workerneeds. 

Steven Johnson is assistant vice president-life anddisability products at Colonial Life. He can be reached at (803)678-6599 or [email protected]