It's the first quarter of 2011. You've made your resolutions to be better, smarter, and thinner; drink less; work harder; spend more time with the family; and all the other regular New Year's resolutions. Why not consider a different kind of resolution for this year: Write more permanent life insurance.
Why not? It's actually a good resolution, and probably easier to accomplish than all the others you've made. I know there are many incentives to buy term insurance, but there are even better incentives for permanent insurance. You've heard these reasons, but maybe you don't believe them yourself. Do you own permanent life insurance? If not, you should be your own first prospect.
The permanent solution
So, why should your clients own permanent life insurance? One of the best reasons is that permanent problems require permanent solutions. The vast majority of term policies end before they become claims. People live longer than the policy lasts, or the premium becomes too expensive at renewal for them to pay. They often end up dropping the term policy at a time when they need it most, but can afford it least.
If the client has an estate tax problem, it is a permanent problem that cannot be solved with term. This means that they need a policy that will last to life expectancy – in other words, they need the guarantee that the policy will pay no matter how long they live. If the policy ends before their lives do, term becomes a very expensive solution.
Permanent insurance is also an excellent way to build cash values for retirement and cash reserves to use in the case of an emergency. Have you ever heard a client complain because they had money available for an emergency? Did you know that, in many states, the cash values in life insurance are not subject to the claims of creditors? These are all good reasons to own cash value life insurance.
Permanent life insurance has also become an asset class that many financial advisors say should be held in a client's portfolio. What do people look for in low-risk investments? Safety, security, and guarantees – all of which whole life insurance provides.
Another advantage of permanent insurance is the ability to use the dividends or cash values to pay premiums. Perhaps your client doesn't want to pay premiums for an extended period of time. One of the newest policies on the market allows the client to select the number of years they will pay premiums, with the guarantee that no more premiums will then be due for the remainder of their lives. This type of financial guarantee during a time of uncertainty may provide financial confidence for your clients.
If your client has had a financial reversal and cannot afford to continue current premiums, the cash values provide a cushion that they can use to pay the premiums and continue coverage. This becomes critical if the client is no longer insurable or has developed a medical condition that would affect their insurability.
While term insurance may be easier to sell, it doesn't fit every problem. Yes, permanent life insurance is harder to sell, but where permanent is the better solution, it should always be included in your recommendations.
