When it comes to permanent life insurance, clients can have access to an array of features and benefits that extend beyond the traditional death benefit protection of life insurance. But the complexity of such a policy, combined with the positioning that seemingly puts it at odds with the goals of life insurance in the first place, can make it difficult to communicate to clients.
Once you know the proper language and can speak to clients about permanent life insurance as protection and more – something that can, first and foremost, protect their family, and then protect against living expenses and emergencies – the concept becomes simpler and more attractive to policyholders. And once that understanding is reached, you can begin driving home the principles of permanent life insurance. Previously, we’ve covered the idea of positioning permanent life as a product that allows clients and their families to “live more.” Here, we discuss the final two principles in discussing permanent life: keep more and build more.
This is all about how a permanent life insurance policy can help clients keep more of their money at the end of the day.
So how should you talk about keeping more money? Try something like this:
“Like 401(k)s or IRAs, permanent life helps you keep more of your money by minimizing your taxes Unlike 401(k)s or IRAs, it has no contribution limitations, and no income taxes on any money passed along.”
(Please note, a 401(k) reduces taxable income, a benefit which is not offered when purchasing permanent life insurance.)
Remember that the potential clients with whom you are speaking don’t know much about permanent life, so examples of how they can keep more and comparisons with more-familiar products go a long way.
The language you use to talk about “keeping more” is critically important. Let’s dig into some of the details, based on known consumer pain points:
Like/unlike: Comparisons with similar products help them appreciate the benefits and understand how permanent life insurance can fit into their larger financial picture.
Minimize how much you pay in taxes: Everyone likes fewer taxes.
No contribution limits: Enhanced access made this a valuable feature.
No income taxes: Explicit reassurance helps.
“Keep more” is all about comparison to other products. Your existing and potential clients have a lot of balls in the air. They’re getting a lot of messages about the need to invest in this or that. So you need to put permanent life insurance into context for them. Show them how it’s different and better than some other investment options. It explains why they might need this one, too.
Quantitative research confirms that consumers value the comparison with another product they might be more familiar with. Here’s an example:
“Permanent life insurance offers an advantage over taxable accounts because all of the money you invest through your monthly payments is able to grow tax-deferred. Like your 401(k) or IRA, that means you can build your assets more quickly over time.”
This last principle is all about growing their money — and as you’ve already seen, the idea of building more by minimizing taxes is a compelling differentiator for consumers.
So how should you talk about earning money with an insurance product? Advisors have success with phrasing like, “Unlike term life insurance, permanent life cash value can grow over time like equity in a home. And, unlike taxable accounts, the money you invest grows tax-deferred. That means you can build your assets more quickly over time.”
Growth and earnings aren’t something people automatically think of when it comes to insurance, and it’s language that can pleasantly surprise them. But the idea of investing with an insurance product also raises some red flags. Clients, of course, want to build their assets, but they are buying insurance for protection, so they’re concerned by anything that implies this protection might be at risk.
When you’re introducing permanent life insurance, investments are, of course, part of the conversation. But be aware that investors are not looking to take big risks with this type of a product. So yes, talk about the benefits that appeal to them, but make sure to mitigate the risk conversation so they’re comfortable enough to continue.
The “I” word
Believe it or not, even with this sophisticated audience, it’s easy for any sort of investment conversation to come across as jargon. “Earned value,” for example, is insurance jargon, not a concept many consumers are immediately familiar with.
Most importantly, most investors aren’t familiar with the idea of an investment vehicle inside of an insurance product. The concept can seem contradictory. So if you’re using comparisons to explain investments, be sure to use ones that don’t imply risk. Since real estate is generally regarded as a safe, long-term investment that has continually bounced back despite recent downturns, it makes for a good comparison.
Putting it all together
When you’re introducing potential new clients to permanent life insurance, research and experience shows that language truly matters. With the right core positioning and points, you’ll be able to open the conversation in a way that gets the client asking questions and wondering what else permanent life insurance can offer them.
If you remember only one thing about introducing permanent life insurance to potential new clients, remember this: Consumers focus on protection first. Protecting their family is the primary reason almost everyone buys any sort of life insurance policy. So don’t short change protection. Start with it. And explain how a permanent life insurance policy can provide that protection… with so much more.
For more information on adjusting your language to better position permanent life insurance, see the interactive white paper.