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Life Health > Life Insurance > Permanent Life Insurance

Using analogies to explain insurance concepts

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An analogy is a comparison of certain similarities between things that are otherwise unlike. Using an analogy can be helpful when introducing a new insurance product or concept because this method relates the new information to something that your client already knows and understands. An analogy:

  • Can simplify a complex product;
  • Make a concept seem more tangible;
  • Connect something unfamiliar to something that’s relevant;
  • Are often remembered by your client; and
  • May be retold (kind of like a good story) to someone else by your client.

What is an example of a life insurance analogy?

Using analogies to explain the types of life insurance can help your clients understand the similarities and differences among their options. A common analogy for explaining the differences between term and permanent life insurance is to compare it to “renting” or “buying” something substantial, such as a car or a home.

Buying term life insurance is kind of like renting an apartment. Both provide you with coverage or place to live for a specified amount of time. Both have ending points: With an apartment, it is the end of a lease and with term insurance, it’s usually at the conclusion of 10 or 20 years. With both an apartment and term insurance, you may have the ability to continue it, but you may have to pay more for it because rent and premiums tend to go up over time. You can also walk away, but just as rent checks don’t build equity in a home, term insurance premiums do not build cash value.

On the other hand, buying permanent insurance is like buying or owning a home. Both are designed to build up a cash value so you are paying for an asset that you can keep. Over time, both a house and permanent life insurance are “assets” that usually increase in value over time. And similar to borrowing from a home’s equity, you can borrow from a permanent life insurance policy’s cash accumulation value.

Where can you use analogies?

Analogies can be helpful during conversations or presentations. But they can also be useful in written materials such as newsletters, brochures, letters, and Web content. Sometimes a picture can say a thousand words. In a sea of marketing materials that feature very similar “lifestyle” photos, headlines and messages, why not stand out in the crowd by using analogies, when appropriate?

Looking for analogy ideas?

If you’re looking for additional analogies related to specifically to insurance, financial concepts and retirement issues, check out Storyselling for Financial Advisors: How Top Producers Sell by Scott West and Mitch Anthony. This book, found on, is a “storybook” of creative analogies, metaphors, similes and stories that you can use to explain and simplify a number of complex products and concepts for your clients.

More Sales and Marketing Tips from Amy Kennel.

Amy Kennel is a communications consultant who specializes in insurance, financial services, and retirement planning. She owns Insurance Marketing Concepts, LLC, based in Des Moines, Iowa. You can contact Amy Kennel by calling 515-289-6413 or by sending her an email at [email protected]


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