Most consumers think of term life when buying life insurance.
Related: 10 advantages of term life insurance
“Why not?” they say. “It’s a commodity like auto insurance or socks.” Find the lowest price, push the “Buy Now” button, and you’re done. Easy.
Consumers are not alone, life insurance agents often think the same way. That’s not good. Both lose when that happens.
By using more creative approaches that capture a client’s interest and imagination, advisors can deliver what clients want at a lower cost.
Here are five sales concepts that work:
1. Take away the tables on term life.
Let’s say you have gathered the facts and determined that your client would be best served by purchasing a universal life policy. At the same time, the client made it clear that price is important. In such a situation, it’s tempting to suggest a term life program instead.
But wait. What if you could obtain underwriting concessions on a UL program that mimic term life? Why wouldn’t that be attractive to a client?
You can meet or get near the term price with a permanent program. Insurance companies can be competitive if they want a certain type of business by offering credits (discounts) and table shaving (unhealthy applicants given healthy applicant rates). With this strategy, you can improve a UL offer, that’s attractive to a client.
2. Go from a 20-year term policy to a UL policy and save money.
That may come as a surprise, but it’s true. You can reduce the payment period and, at the same time, give a client UL protection.
Here’s an example of how it works. The annual premium for a 20-year term policy is $10,000, for a total of $200,000. At the same time, the annual premium for a UL policy for the same face amount is $13,000 for 13 years, a total of $169,000.
This approach shortens the payment duration — with a total savings of $31,000. But that’s not all. In this situation, clients have the flexibility of knowing that should they have health issues in the future, they are “pre-qualified” for continued coverage.
Even though this approach increases the annual outlay, it shortens the number of payments, has built-in flexibility, and best of all, a lower net cost.
Agents and advisors should use term life products as more than go-to default sales. (Photo: iStock)