There's no doubt that Americans are underinsured with regard to life insurance protection.
In fact, nearly 50 million Americans say they need more life insurance, according to recent research from LIMRA International, Windsor, Conn. And these potential customers don't need more life insurance protection for only 10 or 20 years–they need coverage all along.
Most customers won't be able to articulate exactly what type of insurance they need. However, it's certain that they do want flexibility and options with whatever they buy, whether it's life insurance protection or an esoteric investment such as a timeshare property.
Because of this, it takes more time and effort for the advisor to explain to a customer why, most of the time, premium shouldn't be the only determinant of a life insurance purchase. The customer needs to understand that people really do get what they pay for with life insurance.
Unfortunately, many agents are concerned that unless they sell the lowest cost premium proposal, they'll lose the sale and someone else will come in the door behind them with a lower premium.
In reality, if the agent only sells the lowest cost premium, the agent may make the initial sale but ultimately lose the customer.
To be more successful, modify the selling process a little bit by providing a true competitive advantage: Focus on the whole product, not just the price.
For example, discuss all the living benefits available–such as tax-deferred accumulation, tax-advantaged distributions, coverage for long term care on a tax-advantaged basis, perhaps even being able to provide coverage for unemployment or disability coverage–all in one contract.
Tell customers that while others may seek to win a sale by showing a purported lower cost, that product will come at a price–i.e., low or no flexibility. Being upfront this way knocks out the competition from the start.
