Key Takeaways
- 73% of households would face financial hardship within one year of losing the primary earner
- Dual-income families still average a $350,000 coverage gap per spouse
- Stay-at-home parents provide services worth $178,000/year—yet 40% have no coverage
Understanding Who Depends on Them
Client Question: "How much life insurance do we actually need for our family?"
Life insurance is fundamentally about people—the ones left behind. Your job is to understand:
- Who depends on this person financially?
- What would happen to them if income stopped?
- What future obligations exist? (college, mortgage, care for parents)
Key Discovery Questions
| Area | Questions to Ask |
|---|---|
| Immediate Family | Who lives in your household? Who depends on your income? |
| Extended Obligations | Are you supporting anyone outside your home? Parents? |
| Future Needs | What are your goals for your children's education? |
| Lifestyle | How would your family need to adjust without your income? |
| Debts | What obligations would remain? Mortgage? Student loans? |
The Young Family
A couple with two young children
Setup
First meeting with a couple in their mid-30s. They have two kids (ages 3 and 6), a mortgage, and both work full-time. They reached out after their neighbor died unexpectedly.
Client says:
“Thanks for meeting with us. Our neighbor Mike passed away last month—heart attack at 42. Left his wife and three kids. It really shook us up. We realized we don't have much coverage. I think I have something through work, but I don't even know how much.”
Practice Objectives
- 1Acknowledge what prompted this conversation with empathy
- 2Explore their current financial picture
- 3Understand who depends on each spouse's income
- 4Discover their goals for the kids (college, activities)
- 5Quantify what "being okay" would mean for the surviving spouse
- 6Don't rush to solutions—fully understand the situation first
The Stay-at-Home Parent
A family where one spouse doesn't work outside the home
Setup
Meeting with a family where the husband works and the wife stays home with three kids. The husband thinks only he needs coverage.
Client says:
“I want to make sure my family is protected if something happens to me. I'm the only income, so if I'm gone, they'd be in real trouble. My wife doesn't work, so she doesn't really need coverage, right? We should focus on me.”
Practice Objectives
- 1Don't immediately correct him—explore his thinking
- 2Help him calculate the value of what his wife does
- 3Discuss childcare costs, household management, etc.
- 4Guide him to understand both need protection
- 5Let him reach the conclusion rather than telling him
The Sandwich Generation
Someone caring for aging parents and children
Setup
A 50-year-old woman is helping support her aging mother while still having a teenager at home. She hasn't thought about how her death would affect both dependencies.
Client says:
“My situation is complicated. My daughter is 16 and I'm also helping my mom, who's 78 with health issues. I pay for some of her care—about $1,500 a month. My husband and I both work, but I don't know what would happen to either of them if something happened to me.”
Practice Objectives
- 1Acknowledge the complexity of caring for two generations
- 2Explore both the upward (mom) and downward (daughter) obligations
- 3Understand what would happen to mom's care if client passed
- 4Discuss daughter's remaining needs (college, support)
- 5Consider whether husband could handle both obligations alone
The Blended Family
A remarried couple with children from previous marriages
Setup
A couple where both have children from previous marriages. There are complicated dynamics around child support, custody, and whose kids benefit from what.
Client says:
“We need to figure out life insurance, but it's complicated. I have two kids from my first marriage—I pay child support. My wife has one kid from her first marriage who lives with us. And we just had a baby together. I don't even know where to start.”
Practice Objectives
- 1Map out all the children and their living situations
- 2Understand existing obligations (child support)
- 3Explore how each child would be affected differently
- 4Discuss the delicate balance of being fair to all children
- 5Consider the ex-spouse dynamics without taking sides
A client says his stay-at-home wife doesn't need coverage. The best response is: