What is the psychology behind final expense??
- Thread starter jody108
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A lot of answers but no information for the poster.
FE is purchased by older people who don't have any insurance or the sense to prepay a funeral and leave a small savings account. You better be able to convince them they need to do it and be a good closer or you'll lose out. It's a very emotional sale. With the high premium cost, there isn't any rationale to use, especially if they're rated up.
FE is purchased by older people who don't have any insurance or the sense to prepay a funeral and leave a small savings account. You better be able to convince them they need to do it and be a good closer or you'll lose out. It's a very emotional sale. With the high premium cost, there isn't any rationale to use, especially if they're rated up.
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- #13
- 707
So what are the hot spots for FE ... what brings out the emotion? What helps them understand the need for this insurance? anyone have any stories where FE would have saved someone a lot grief/expense or where FE did save someone the grief?
Rabi, you got the spirit of my question ... more so than I did ...
what needs to be said to close these sales ...
Thanks for all these responses ... Soooo helpful.
Insurance is fun to learn ... now I just need to get out there and try selling it
...
Rabi, you got the spirit of my question ... more so than I did ...
what needs to be said to close these sales ...
Thanks for all these responses ... Soooo helpful.
Insurance is fun to learn ... now I just need to get out there and try selling it
...- 2,094
In some peoples' minds-this is how FE has become through the years..and it's a shame. This is not the original intent of final expense. The original poster asked the psychology behind FE, and I tried to start with the history, and explain what some real people out there in the field think, and why it's even a valid mindset at all- for the client and the agent.
The original intent of FE is to have something to pay for a funeral. I don't care if you are 28 years old or 68, that's the psychology behind it. To make it into something that is a "hard sale" and "you better get emotional to sell it", blah blah, that's not the psychology behind it at all, in my mind.
And WIN, I agree on mailers and marketing pieces, when I worked in DI sales in a little higher income bracket, I had great success with mailers. Marketing pieces are great. In my final expense or life insurance market, door knocking is way more effective, for me. Mail is not at all effective- for what I'm doing.
Oh, and, to somarco and rabbi: the people I target: they would not pay five cents for a term plan. They want whole life, they believe in whole life, and they only buy whole life, period. As a matter of fact, they really don't understand the concept of term. Trust me, I've tried it. It's like trying to sell a bicycle to someone with no legs. Most prospects I talk to in the field: are very traditional. So there are no "hot buttons" to push, no extra-emotional deals that go along with this. As a matter of fact, the emotional hot buttons get pushed when talking term , in a negative way. Their grandma had whole life, their mom did, and now they do. It's a generational thing. It's a tradition. They tell me they want "life", or "straight life", they mean whole life with cash value.
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Ok...we're on the same page. The issue is when discussing "final expense" we're not usually talking about "working adults"...we're talking about low income seniors that have little to no savings and a very limited budget.
In your scenario given I would generally recommend term with ROP. Most of the time the ROP will cover the funeral expenses even taking into account inflation over that 30+ year period...all while achieving a 5-7% tax free return.
- 2,094
This is where we have gone wrong with FE. All of us in the insurance business. Shame on us for making FE something for seniors with little money.
Is your goal to help clients or earn a commission?
When you help your client solve a problem there is no need for a close.
I agree in part, which is why I qualified my response.
The FE market can also include children's insurance. Adults will sometimes buy a burial policy on a child which again is well and good but not if the adult does not have adequate life insurance on themselves.
When it comes to children's insurance, I suggest buying more than just the cost of the burial. Perhaps as much as $50k.
Why so much?
To allow the parents time to grieve with dignity rather than forcing them to return to work the next day after burying a child. If you have ever known a parent who has lost a child you know the emotional side of that loss and how devastating it can be.
We are in agreement on that one.
These "niche" markets where overpriced policies are sold just to make a buck are a disgrace. The mortgage protection market is another that is widely abused.
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homeservice, what I gather from you is that each person is individual and that is my responsibility to assess what they need.
this seems to be the point of emotion that is being spoken of ... in otherwords, caring about the person ... assessing their needs and solving those needs ... if this is done, then emotion/hot points ... are automatic.
this makes sense to me.
it's not a one size fits all scheme ... however, there is a place for FE ...
Some people are more comfortable with an insurance that has cash value ...
however, it's more expensive and less face value ...
isn't term with ROP very similar and a cheaper way to achieve the same goal?
When you are 74 years old, is term with ROP an option .... or FE there only option ... in otherwords, does FE have easier underwriting guidelines.
Thank you so much ... this is fun post ... learning a lot.
Jody
this seems to be the point of emotion that is being spoken of ... in otherwords, caring about the person ... assessing their needs and solving those needs ... if this is done, then emotion/hot points ... are automatic.
this makes sense to me.
it's not a one size fits all scheme ... however, there is a place for FE ...
Some people are more comfortable with an insurance that has cash value ...
however, it's more expensive and less face value ...
isn't term with ROP very similar and a cheaper way to achieve the same goal?
When you are 74 years old, is term with ROP an option .... or FE there only option ... in otherwords, does FE have easier underwriting guidelines.
Thank you so much ... this is fun post ... learning a lot.
Jody
Alright I'm getting on my soapbox here...sorry. I'm hearing from Home that "shame on us"...the same guy that was out door knocking low and middle income areas and selling them small whole life policies...PLEASE!
This is where the entire problem started, with the basis that one needs to buy a whole life policy as the biggest rock in their financial planning container. While we're at it, let's sell some low income mom a whole life policy on her three young children then we'll make sure there is no room in the budget for enough term to replace income, pay for college, provide for housing and every other thing that enough affordable insurance would have provided.
Why in the world would someone blanket prefer to put 50k of insurance on a child? In these times of wages shrinking, both spouses working, almost NO ONE having enough coverage on themselves to even think about buying 50k of life insurance on a child? One minute we're talking about losing the house and the next about allowing for an extra 40k to take a year off to grieve...don't possibly see how that's in the budget. I'm not saying it wouldn't be nice, but again that is not the scenario painted. I would have to put that extra money behind adequate coverage for the breadwinner, ROP and a fully funded education fund. To cover burial expenses a simple rider can be added for a few bucks per month that cover every child in the family.
Insurance companies are not preying on low income seniors. It costs X amount of money to insure the life of anyone and it's not up to a marketing strategy to set those rates and terms. The fact is if you're a senior, in relatively poor health and have no money set aside for your burial, you have three choices...buy a small whole life policy, ask your kids to pay for the policy if you can't or pass the burden to them if you do neither.
Now before we turn this into a whole life vs. term discussion...which I won't be a party to...I fully understand there is a time and place for permanent plans, but this discussion centers around what's going on with final expense and Somarco's $40/mo or loose the house family...NOT estate planning and other advanced market issues.
For middle America it's really pretty simple. You buy 10-20 times your income in term. You add ROP unless you have proven you can get better than 5-7% after taxes guaranteed on your long term investments. You add a child rider to provide for burial for the kids. Once you've done that to me you're free to buy whatever someone is trying sell you with your additional discretionary income.
Rabbi is on the money. You're dealing with folks that haven't planned up to this point and the purchase will be made based upon a gutteral emotional response. It's a tough spot they're in and not taking action does have tough consequences on the family.
This is where the entire problem started, with the basis that one needs to buy a whole life policy as the biggest rock in their financial planning container. While we're at it, let's sell some low income mom a whole life policy on her three young children then we'll make sure there is no room in the budget for enough term to replace income, pay for college, provide for housing and every other thing that enough affordable insurance would have provided.
Why in the world would someone blanket prefer to put 50k of insurance on a child? In these times of wages shrinking, both spouses working, almost NO ONE having enough coverage on themselves to even think about buying 50k of life insurance on a child? One minute we're talking about losing the house and the next about allowing for an extra 40k to take a year off to grieve...don't possibly see how that's in the budget. I'm not saying it wouldn't be nice, but again that is not the scenario painted. I would have to put that extra money behind adequate coverage for the breadwinner, ROP and a fully funded education fund. To cover burial expenses a simple rider can be added for a few bucks per month that cover every child in the family.
Insurance companies are not preying on low income seniors. It costs X amount of money to insure the life of anyone and it's not up to a marketing strategy to set those rates and terms. The fact is if you're a senior, in relatively poor health and have no money set aside for your burial, you have three choices...buy a small whole life policy, ask your kids to pay for the policy if you can't or pass the burden to them if you do neither.
Now before we turn this into a whole life vs. term discussion...which I won't be a party to...I fully understand there is a time and place for permanent plans, but this discussion centers around what's going on with final expense and Somarco's $40/mo or loose the house family...NOT estate planning and other advanced market issues.
For middle America it's really pretty simple. You buy 10-20 times your income in term. You add ROP unless you have proven you can get better than 5-7% after taxes guaranteed on your long term investments. You add a child rider to provide for burial for the kids. Once you've done that to me you're free to buy whatever someone is trying sell you with your additional discretionary income.
Rabbi is on the money. You're dealing with folks that haven't planned up to this point and the purchase will be made based upon a gutteral emotional response. It's a tough spot they're in and not taking action does have tough consequences on the family.
That's not what I said.
Go back and read my post, this time with comprehension.
I hardly think a $40/mo plan is anywhere close to estate planning.
Again, go back & read my post.
And for one more time . . . there IS a place for FE but not as the be all to end all for everyone. As Jody surmised, you have to weigh each situation on its' merit and go from there.
Not saying anyone does this, but to charge in with a plan to "sell" someone on FE while ignoring their need is unprofessional IMO.
I don't sell folks anything. What I do is help them discover their need and find a way to fill the void. I help them buy what they need but never, ever have a need to close anyone.
