Filed Under:Life Insurance, Sales Strategies

3 term life selling roadblocks — and how to overcome them

As many of you know, you can encounter any number of roadblocks when you are meeting with a new client to talk about life insurance. In my 20 years of experience, I have learned a few techniques to keep this process as simple as possible. In this way, I’m not only able to help clients find the path to financial security, but also to use term life insurance to develop lasting relationships.

I position myself as a financial professional, not a life insurance salesperson. I make term insurance part of my “yellow notepad conversation,” which is the initial meeting with a client to review his or her entire financial picture.

I tell clients if they can give me 20 to 30 minutes, I can give them an idea or two to help improve their financial position down the road. Term insurance is one of several items we address during this meeting. Other topics include retirement and 401(k) planning, disability income insurance, health insurance, college funding and estate planning. From that list, we create a to-do list, an action plan. Life insurance often bubbles up as the most actionable item on the notepad.

From there, I often encounter these three common roadblocks.

fear of speaking

Roadblock #1: Most people have a natural predisposition against discussing death. No one wants to discuss it; so ultimately, they avoid making decisions about life insurance.

Solution: Sometimes it takes the death of a friend or family member for a client to fully comprehend the importance of life insurance. If you get the conversation started, many will see the value.

Sales questions

Roadblock #2: I have found clients often question what the face amount of a term policy should be and use that as an excuse to delay making a decision.

Solution: I try to overcome this obstacle by keeping it simple and explaining how the face amount should be enough to protect the client’s life and business and can also be used as collateral for loans. I also either tie the face amount of the policy to the client’s debt or explain that if the primary breadwinner should die and that income stream is gone, how a lump sum of capital can replace that income.

At 5 percent a year, $1 million of death benefit generates $50,000. So replacing $100,000 of income requires $2 million of death benefit. Most people can get their heads around that cost discussion.

expensive

Roadblock #3: Questioning the amount of a life insurance premium can also be common.

Solution: I try to make it a non-issue and show how they can have financial security for often as little as $20 to $30 a month. If the discussion about term is any more complex, it only presents more reasons for a client to delay and continue to think about it.

Term is a low-cost, easy way to get clients started on that path to financial security, and I use it as part of a relationship-building process. Many of my term clients have developed into long-term policyholders. Some of my clients have come back to me to become my largest policyholders.

I see term as the initial sale, the beginning of the process. Once that policy is in force, I meet with them again, and we discuss whether and how to convert it into whole or universal life to use as a tax-advantaged vehicle.

The life insurance sales business is based on relationships, and I rarely start a conversation discussing only a client’s term insurance needs. The majority of my clients are referrals — friends and family members of my small-business owner clients in the Silicon Valley, and I then look at their holistic picture, their entire financial situation, to try to learn and understand their individual needs.

Just as important as building relationships with your clients, it is also critical to build solid relationships with the life insurance companies you represent. It is especially important to work with ones that provide direct access to their underwriters so you can explain and clarify a case with them to provide the most value to a policyholder instead of having an application stuck in a file.

 

For more on selling life insurance, see:

11 signs your deal is dead in the water

Think Pink: Sales psychology lessons for the life industry

Lost sales leads: 4 common problems

More Resources

Comments

Advertisement. Closing in 15 seconds.