Selling permanent life insurance has never been easy. Often, the hardest part is just knowing where to start the conversation.
Maybe you’ve been selling permanent life insurance for years, but your tried-and-true methods are losing their luster. By combining your experience and expertise with proven language, you can have more effective conversations with potential clients of all ages. And if you’ve never sold permanent life insurance or generally handed it off to someone else, this will give you a place to start offering it directly – with confidence.
Many people are familiar with the mantra “buy term and invest the rest.” That’s what you’re up against. You’ve also probably noticed that most potential clients don’t know much about permanent life, which can be a complex product. And, frankly, trust in the financial services and insurance industry is low, particularly after the recent recession.
As their financial professional, you are often the first resource for your clients. You might introduce them to this product for the very first time, and how you set up the conversation can have a significant impact on their attitudes and perceptions of permanent life and other permanent life insurance products.
What you say really matters.
Life insurance: The consumer’s truth
Quantitative research reveals three roadblocks holding clients back from purchasing a permanent life insurance policy:
The ideal targets for permanent life insurance are financially literate, engaged, active managers of their finances. They have the financial means to purchase permanent life. They want a comfortable retirement, for which they have spent years saving up. They are concerned about what might happen to their family when they’re gone. And many of them know they need some kind of insurance to protect their family.
So why aren’t they fully planning for their insurance needs? Why aren’t they buying permanent life?
The truth is, most consumers just don’t know much about permanent life insurance. And what they don’t know can hurt them – and you.
Several reasonable, fact-based arguments simply fall flat when tested with consumers.
Your truth: Permanent life insurance offers so much more value than term.
Client’s truth: What’s permanent life insurance?
Your truth: Permanent life insurance is for you and your family.
Client’s truth: Life insurance is for your family when you die.
Your truth: Permanent life insurance offers the opportunity for investment growth.
Client’s truth: The whole point of insurance is to minimize risk!
AXA’s truth: Permanent life insurance provides access to your money.
Client’s truth: Life insurance means giving up money that I’ll probably never see again.
Breaching the mindset gap
The difference between what the industry, or you, say to clients about permanent life insurance versus what they hear and believe is due to what’s called the “mindset gap.” The distinction between permanent life insurance and term insurance is second nature to you, but not for your clients.
Many savvy investors have never even heard of permanent life insurance. When you begin talking about the problem, then, your clients come to the conversation thinking about what they know: Life insurance is for when they die. It’s for protecting their family. It’s not about growth – it’s a backup plan, not money they would put at risk or use during their lifetime.
They’re really starting from square one. It’s easy for them to be overwhelmed by this conversation. And if they’re confused, they can’t hear what you’re trying to say.
To get them to listen, you must take their mindset into account. There is a right way – and a wrong way – to start the conversation. Starting it the wrong way can lead to trouble. Keep in mind that the No. 1 goal with life insurance is to protect the family.
You think of permanent life insurance as a multi-purpose financial planning tool. Instead, begin thinking about it the way clients do: protection and more.
A complex product made simpler
Permanent life insurance is counterintuitive. It’s called life insurance but, to everyday people, it’s actually a complex product that combines insurance with investments. Partly because of this complexity, the way you talk about permanent life is critical to a successful conversation.
Permanent life may be multifaceted, but when you clearly communicate the benefits and talk about permanent life insurance as “protection plus more,” many clients will understand how it can be a valuable part of their larger financial plan.
Of course, as your younger clients prepare for their financial future, many focus on whether they will have enough to retire the way they want. Many are also concerned about choosing between enjoying life today or retiring comfortably tomorrow.
Permanent life helps them address these challenges while helping them protect their family. It’s protection “plus.” The key is in how you explain these dual benefits. With permanent life, clients have the opportunity to do so much more than just protect: They can also minimize their tax bill and grow their money over time for a comfortable retirement or to leave a legacy.
Don’t short-change protection
Don’t short-change protection. Often, the conversation jumps too quickly to the growth opportunities, but consumers have spoken: They want to hear about protection first. So when you’re talking about permanent life with your clients, you should position it as protection for your family — plus so much more.
For more information on adjusting your language to better position permanent life insurance, see the interactive white paper.