You’re a successful insurance professional. The advantages of whole life over term insurance are obvious to you. Yet, that’s not always the case with prospects and clients. They comparison shop online for the lowest price without understanding why they should pay more for something that delivers the same death benefit. Here are some points to remember that you can use when discussing whole life insurance with prospects and clients:
When a client says
- I’m too old. Your possible response: We start at parity. Both whole life and term insurance offer the same death benefit. There might be different terms or exclusions. Allow me to explain more.
- I’m not planning on dying soon. Your possible response: Whole life insurance builds cash value. It ultimately grows to the face value of the policy. If you live to 100 because you eat the right brand of yogurt, you can collect your death benefit while you’re living.
- I might experience an emergency and need cash. Your possible response: The cash value whole life builds can usually be borrowed against via a loan. Term life doesn’t build cash value.
- Term life is so cheap. Why pay more? Your possible response: The answer is in the word “term.” It runs for a certain length of time. When it’s over, you aren’t covered anymore. Then you need to buy another policy, priced for you at your current (older) age.
- I have insurance through an organization. It keeps running. It’s so cheap. Your possible response: It’s a different type of term. You hit certain ages, so to keep the same premium your death benefit drops to a lower amount.
- I have insurance through work. Your possible response: That’s great! What are the chances you will work for the same firm until your final day? Not very good.
- The stock market is a better investment than whole life insurance. Your possible response: You can have a bit of each. Some policies allow a degree of investment in the market or participation in the market’s performance. Gains in life insurance are tax deferred. Stock market profits from an outside account are taxable the year you earn them.
- I’m hopeless at saving money. Your possible response: Whole life can help. It’s that building-cash-value feature.
- One day I will need income. Your possible response: Whole life can help. That cash value you built up can be rolled into an annuity, providing income in retirement.
- The love of my life is hopeless at managing money. Your possible response: The insurance proceeds can be used to fund an annuity providing lifetime income. It’s just like getting a paycheck. Hopefully, that makes things easier for your surviving spouse.
We’ve been taught the benefits of whole life, but many times your client has not until they talk to you.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book, Captivating the Wealthy Investor, can be found on Amazon.
This originally appeared in the MDRT Blog.