August 6, 2013

Think back to the old days. Adages then implored, "Save for a rainy day," and, "Invest for your future."

Poor Planning
Do you have clients who planned poorly?

That's bad advice for today's over-65 crowd. The baby boomer generation lives for instant gratification, focuses on "living in the now," and expects that the future will take care of itself. It can be challenging to figure out how to sell life insurance to a generation that doesn't plan ahead. Here are a few ideas:

Guarantee benefits from the policy even while the insured is still alive

Not all life insurance is created equal. You know that term life insurance, for example, only pays benefits if the policy is in force when the insured dies; if a policy is allowed to lapse while the insured is still alive, they have nothing to show for all the premiums. This can make life insurance seem like a waste of money, with no real benefit – certainly not to the insured.

So instead of trying to sell term life insurance, focus on how to sell life insurance that's also an investment vehicle. Show clients how the cash value will grow over time, and assure them that they can either be given dividends on a regular basis by check or have those dividends reinvested for further, continued growth. Because the cash value grows tax-deferred, you can show clients that they will save money immediately and also have income for future needs. Clients get to choose whether or not to receive benefits from these policies on an ongoing basis as well, so they'll see the benefit of the insurance immediately. In addition, while you can show that the benefits include the policy cash out after the insured's death to beneficiaries, this may not be the strongest selling point.

Educate your clients about the benefits of various annuities

Chances are, many of your would-be clients who need some extra retirement income beyond Social Security and are worried about running out of money before the end of their lives. If your clients have $250,000 to $500,000 in investable assets and they won't be retiring for several years, talk to them about annuities. While 401(k)s and IRAs have contribution limits, clients can generally put away as much as they want to without worrying about contribution limits. In addition, annuities grow tax-deferred, meaning that every dollar invested stays put until clients cash out. And although extra fees may make "minimum guaranteed payments" for some clients too expensive to truly consider, for others, they can provide a steady stream of income for the rest of their lives in addition to Social Security and pension plans, thus providing security and safety.

Show clients how they can take low-interest loans against their policies, as well

For clients that need to take out low-interest loans from time to time, a life insurance policy can provide the perfect opportunity for access to quick cash without the headaches of the traditional loans application process. One of your selling points will be that unlike most loans, these loans don't have a set repayment schedule; in fact, clients do not have to pay it back at all, as long as they accept a reduced death benefit. There's no worry about having to jump through the hoops required as with the traditional loan process, either.

You can see that how to sell life insurance doesn't necessarily include term life insurance, since those policies have no benefits beyond a death payout. However, other types of insurance most certainly do benefit even this spontaneous crowd, and you can take advantage of that spontaneity by working with it instead of against it.


Want to know more? Contact me today to get started or get better at selling life insurance to your clients.

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