Affordability is what makes term insurance so easy to sell. The only distaste would come from the fact that it’s sort of like rent-a-policy. You can use it while you’re paying but when you stop paying, you can kiss your investment goodbye as it will be kept by the insurance company.
Return of Premium policies solve that problem. I’ll help you with the increase in cost shortly. Stay with me and I’ll get you there.
From a technical viewpoint, there is actually a rate of return on ROP products. Let’s say a 30-year level term policy without ROP is $2,000 per year, and the ROP is $3,000 per year. The difference is $1,000 a year for 30 years, or $30,000. The rate of return on the invested difference can be as high as 3 percent. That’s certainly better than bank returns.
Logically and financially, it’s a good buy.
So how do you sell it? You offer ROP first.
Previously, I’ve written about how to successfully present the product.
Approaching prospects with term insurance is your easiest and most acceptable entry point for a client relationship. Target people who obviously need the coverage.
Also by this writer:
Our economy has created a great opportunity for ROP life insurance sales. (Photo: iStock)
Most people have very little savings. The loss of a paycheck is devastating, but there are remedies like unemployment compensation.