If your prospect answers any of the following questions with a "No," then follow up to probe the prospect's true feelings by asking, "Why do you feel that way?" The questions are:
1. "Can we agree Social Security income by itself won't be enough when you retire?" Social Security income has always been only a safety net; it was never intended to be anyone's total monthly retirement income.
2. "Given today's employment climate, can we agree you cannot be certain of the income you'll receive from employer-sponsored pensions; or retirement benefits from health and group life insurance; or even who your employer might be when you retire?" Many companies are merging and consequently downsizing their workforces. Layoffs are common in some industries. Employer-sponsored pensions are going away rapidly, and cutbacks in benefits for retirees are becoming common. There is less loyalty between employers and employees than there was only a generation ago.
3. "Can we agree that, for you to retire in a lifestyle approximating the one you are enjoying now, most of the money you'll need to accumulate will be your responsibility?" The three-legged stool of financial security; government benefits, employer benefits, and individual savings; is rapidly vanishing. The emphasis today is on personal responsibility for the bulk of our savings and investment for retirement.
4. "Can we agree that if you save no more over the next 10 years than you have saved over the last 10, you will probably be disappointed?" Savings have a way of running smack into emergencies or necessary big-ticket expenses: medical bills, new roof, new car, or new appliances. Asking this question can help your prospect realize the need to do a better job, perhaps diversifying short-term and long-term savings.
5. "Can we agree that whether you earn 2% or 20% on your money makes little difference if you aren't saving it and keeping it saved?" Usually, this question eliminates the "buy term and invest the difference" objection. With cash value life insurance, the life insurance company "invests the difference," and since they've been doing it successfully for decades, they know what they're doing!
6. "Can we agree that if you had to, or wanted to, you could live an additional 12 months (without a raise) on your current income?" This uncovers an important way to "find the money." Ask your clients to commit their entire next raise (and/or bonus) and put it into life insurance or an annuity for out-of-sight, out-of-mind, tax-deferred accumulation.
7. "Can we agree that if you had to, or wanted to, you could adjust your lifestyle now to find additional money that you could save for retirement?" When working with prospects to find the money to accomplish their goals, you should discuss whether they "fritter away" any money - daily, weekly, or monthly. Try to do this without being judgmental or making them uncomfortable. Where can they cut back, or economize? Can they consolidate loans and debt?Frivolous spending items might include overpriced coffee, restaurant lunches, lottery tickets, eating out frequently, movies and other entertainment, a gas-guzzling car, low-deductible car insurance, or expensive clothes or shoes. For example, one fancy latte at Starbucks costs $4 or more, whereas a decent cup of coffee at most convenience stores runs around $1. That's a savings of $3 a day, or $90 a month. And that's only one example. If all the money that we now fritter away were diverted into life insurance or annuity premiums, the tax-deferred growth of policy values could be significant over many years. The essential fact to keep in mind, and the reason you should remain firm in your recommendations -- while at the same time remaining professional, courteous and non-confrontational -- is this: Wealth accumulation for retirement is the prospect's problem! Thus, it must be his or her solution. To motivate some prospects to act responsibly in their own interest, life insurance agents must ask direct, tough questions. Your challenge is to do this in a manner that is helpful, caring, and doesn't alienate your prospects.
Carry these seven questions with you and pose them to every appropriate prospect you meet--especially boomers. You can help them concentrate on what is fast becoming Job One for America - saving for retirement. And, by helping prospects learn to make the necessary sacrifices and save more for their retirement, the average size of your own sales will grow.
Larry L. Cox, CLU, president of Cox Insurance Marketing Solutions, has been in the life insurance business for 34 years. In the field, Cox was an agent and agency sales manager; and in several home offices, he served as director of training, field development, product marketing, marketing services and marketing communications. He now writes for insurance and financial services companies. He can be reached at email@example.com.