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6 steps to sure-fire term life sales: term life insurance is a smart choice for many in today's economy. Pounding home these selling points can make it an easy sale to today's cash-strapped consumers.

Let's face it, with the economy in shambles, the average person is likely to be seeking the most cost-effective way to protect his family. In times like these, term life insurance emerges as an attractive alternative to more expensive permanent plans of insurance. If you ask around, you'll find that many people have no idea how ridiculously inexpensive term life insurance is.

There is no other product in the world that does what it does at such a low cost. Success in selling term life insurance begins with conveying this message to our clients, but it doesn't end there.

It is our job as agents to explain the virtues of term life insurance. The easiest way to explain it to your clients is that term life insurance is pure and simple protection, with long-term guarantees. Sure, the industry has many other types of contracts, many of which have important additional living benefits. However, all of these products also have added costs. Costs that, in this day and age, many cannot afford.

Back in the old days, when term life insurance first appeared in the marketplace, it was generally available only as annually renewable term (ART). Premiums began relatively low, and increased each year. Beginning in the 1980s, the popularity of level term began to grow, first with 10-year, then 20-year and in the past 10 years, 30-year plans. Recently we've seen some 35- and 40-year level term plans introduced.

Term life insurance is here to stay. It continues to be the easiest and least expensive way to replace lost assets in the event of a premature death of the breadwinner. And at today's low premiums, there is no reason NOT to encourage your customers to buy the right amount, for the right length of time.

Selling term life insurance is easy if you stick to the basics.


1 Show you care by getting the face amount right

Helping your client get the right face amount is easy to do using any number of readily available calculators either online or through desktop software such as Compulife ( I believe this is one of the most important functions of our job. It is our responsibility to make our clients understand the importance of getting the right face amount. When someone dies, there is no second chance to get it right. Conduct a needs analysis. Nine out of 10 times you'll find that they need more coverage than they think they need.

In fact, tragically, half of our country has no individually purchased life insurance of any kind. All they have is what is provided to them, for free, through their group insurance plan at work--typically just some token amount (e.g. $25,000 or less). The other half owns an average death benefit of less than three times their annual income.

If what they own is any indication, clearly most people have no idea how much life insurance they need. Bottom line: They need more life insurance than they think. The good news is that it will likely cost a lot less than they thought it would!

2 Match the term length to the need

Quite simply, as life insurance agents, we have a duty to make sure our clients understand that, ideally, their level term should not expire before they are done needing the coverage. If, for example, the purpose for the insurance is to provide coverage for a specific period of time in your client's life, such as until the children finish college, and his or her youngest child is 5, then the policy should allow him or her to maintain the coverage at a guaranteed rate for 20 years.

If your client is adamant about buying a product with a shorter-term guarantee, such as a 10-year product, you need to show him or her the 11th year renewal rate. If it's ugly (and it will be), remind your client that her or she will still need the insurance at that time, but may not have the good health to qualify for a new policy.

3 Present a competitive plan, or they'll look for one elsewhere

Consumers generally perceive term insurance to be a commodity product. As such, they will seek to compare prices to make sure they are getting a "good deal."

The minute you leave your client's home or office, he or she will search the Internet and be able to compare prices in a matter of minutes. Presenting a non-competitive plan could be the kiss of death for the sale, and for your credibility. Make sure that what you're proposing is competitive, relative to the benchmark prices in the market. Use a comparison service (such as Compulife) to quickly and easily compare various term plans side-by-side. By doing so, you'll be able to prove to your client that you've scanned the market and found the best values.

4 Present multiple quotes from a variety of companies

By showing your prospective client that you have shopped the market, he will feel confident purchasing a plan from you. Keep in mind that the Internet has changed the way we do business. The Web is now commonplace and people use it to conduct all kinds of price comparisons, including life insurance. Remember, within five minutes of your conversation with him, he will be on the Web searching for additional quotes. So why not do it for him?

5 Explain key differences of products

Explaining differences in product design is a key element of the sale. Be sure to help your clients understand that there ARE factors beyond price that should be considered before making a buying decision.

By comparing, they can often find a policy with better features, more flexibility, and/or from a company with superior financial strength. It's important to talk with them about the financial strength and ratings of the insurance company, the product's features including the length of the guarantee period, convertibility rights, available riders, underwriting criteria for qualification, etc.

6 Don't overlook ROP plans

Around 2003, many of the major competitive term carriers began to introduce Return of Premium (ROP) term plans. These plans are more expensive than their level term counterparts, but they are still priced much more like term than like permanent plans.

When the level term period (typically 30 years) ends, the client is guaranteed a full refund of 100% of the premiums paid. With ordinary term, your client has to "die-to-win," and some clients don't like this. With ROP term, if they die, their family gets the death benefit. If they live (to the end of the term), they get all their money back, income tax-free. It's a variation on the "two accounts" sales track:

"Mr. Client, here's how it works. You set up an account and put $1,000 per year in it. The insurance company also sets up an account and they put $1 million in it. If you die any time during the 30 years, we simply switch accounts. Otherwise, if you're still here at the end of the term, you keep your account: The insurance company writes you a check for $30,000.

Of course, the "account" pays no interest, but in today's world, a return of your money is a whole lot more important than a return on your money."

Term more important today than ever

The precipitous decline in stock prices, along with the sharp decline in real estate values, has negatively affected the net worth of many Americans. As a result, term life insurance can play an even more important role in a family's financial plan today than it did just one year ago.

Why? Because if these people were to die today, their families would be a lot worse off than if these declines in net worth had not occurred. And term insurance is, unequivocally, the LEAST expensive way to replace those lost assets in the case of your client's premature death.

Overall, selling term life insurance begins with understanding your clients. If you think you're going to set up a Web site and people will simply place their orders for coverage, you're kidding yourself. Remember, life insurance is still sold, not bought. And people usually buy it begrudgingly, not enthusiastically. That's why nothing can replace a real conversation. If you listen carefully to them, offer them great values, and are passionate about what you do, the rest will come naturally.

Byron Udell, JD, CLU, CFP, ChFC, is the founder and CEO of Wheeling, Ill.-based (, one of the nation's largest retail life insurance brokerage agencies.

By Byron Udell,
COPYRIGHT 2009 Summit Business Media
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Title Annotation:New Directions in Life Insurance
Author:Udell, Byron
Publication:Life Insurance Selling
Date:Jun 1, 2009
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