What is the best way to sell against (replace) whole life policies that are already in place and in exchange sell a client a new term policy? I don't want this post to turn into a 'replacement' evaluation or a term verses whole life discussion, rather what is the best way to persuade a client to consider a new term policy over an exisiting whole life policy they already have in place?? The only reason I ask is that I often feel clients are underinsured with whole life policies offering them very marginal death benefits for a pretty huge pricetag...Is it better to just try to sell them a new term and keep the whole life in place? Often however, the first agent who sells them whole life has their life insurance budget maxed out that it almost makes an additional term sale impossible without completely replacing the whole life. I very rarely see the advantage of whole life in the markets that I sell in but often clients feel they are 'locked in' with it and have enough insurance...Not really when you consider a husband and wife with 3 kids and all they have is a $50,000 WL on each of them their home and auto guy sold them....But unfortunately this is something I see all the time. How can we make clients consider term regardless of the whole life they already have in place?
What is the best way to sell against (replace) whole life policies that are already in place and in exchange sell a client a new term policy? I don't want this post to turn into a 'replacement' evaluation or a term verses whole life discussion, rather what is the best way to persuade a client to consider a new term policy over an exisiting whole life policy they already have in place?? The only reason I ask is that I often feel clients are underinsured with whole life policies offering them very marginal death benefits for a pretty huge pricetag...Is it better to just try to sell them a new term and keep the whole life in place? Often however, the first agent who sells them whole life has their life insurance budget maxed out that it almost makes an additional term sale impossible without completely replacing the whole life. I very rarely see the advantage of whole life in the markets that I sell in but often clients feel they are 'locked in' with it and have enough insurance...Not really when you consider a husband and wife with 3 kids and all they have is a $50,000 WL on each of them their home and auto guy sold them....But unfortunately this is something I see all the time. How can we make clients consider term regardless of the whole life they already have in place?
Well, it does constrain replies a bit when you say you dont want it to turn into a term versus whole life discussion because all of the elements of that full discussion need to be kept in mind when working with the client.
Having said that though, I think you have to find out what is going on with the client and their policy versus approaching them with the idea that term is better. What are *they* concerned about. Is it the price of the whole life, or that they have too low a face amount or, or what? Don't assume that that low face amount whole life is useless because people do die when they get older or sooner and when you are on fixed income and get hit with burial costs, attorneys fees to settle the estate, remaining medical bills etc it can be absolutely devastating. Yes, I know everyone says that their retirement and savings will be all built up by then and they will be okay. Nice where it works.
In instances where I have done replacements it is often because the client has already decided or has no choice but to either drop the policy or find a more affordable option. Often this is with UL policies that were oversold based on bullsh*t illustrations of performance and the policy blows up leaving the client with higher and higher premiums when allegedly it would be all paid up at this time.
I am not agreeing or disagreeing with anything you are saying. Just saying that I think replacing a policy is where you end out after fact finding versus "how do I replace policies" approach.
I would at least make sure that the term policy you offer has a good option for converting to whole life if they want to go that route or back there. Had a guy this week who is typical. He got some term ten years ago and is now 60 and has decided that he might be 70 someday, duh. He was rated preferred first time around. Tried to get him approved for additional term but he came back Table F based on a couple conditions that he conveniently forgot about such as the visits to the doctor for the tremors etc. He will be better off just converting his existing policy to whole life maybe at a lower face amount (of course he and his original agent "knew" that whole life was a crock back then. Funny how that can change).
My view anyway.
Winter
------------------------------------ Spending Our Way to Prosperity
Because you feel like they are underinsured: this screws everything up. Trust me on this.
I have 22+ years in this, I can tell you, for certain, if you go into a house and the person has whole life, and you start telling them they did a lousy job picking insurance for themselves, that insults them.
Look, when they bought the whole life, I'm sure the agent spent much time with them, showing them permanent insurance, insurance that is not term, insurance that they do not have to convert down the road to permanent. Term is usually sold with the intention of converting it- down the road to permanent. Well, it used to be sold like that.
The permanent insurance- is already in place with these folks. My advice to you is to leave it alone, and maybe add to it, maybe if they have 50K, add your 100K term to it so they have 150K total, or whatever the number is that they need. But don't try replacing whole life with term. Adding to it and having a term-perm blend, now that may be easier.
It's a lot like this: when millions of people voted for Clinton, then they started coming out with Lewinsky and all this stuff-and all the lies- people really did jump up to defend him. They felt like they had to defend their choice to vote for him. They got really defensive. Well, it's kind of like that-{ to a lesser degree} when you meet someone with whole life, they have to defend their choice, they don't want you telling them they are a fool -for their choice. They took the time to vote for whole life, so respect that.
I very rarely see the advantage of whole life in the markets that I sell in but often clients feel they are 'locked in' with it and have enough insurance.
Why would they change anything if they don't perceive a need for more coverage? Start there, walk them through what would happen tomorrow if they died today. If they don't care, move on. If they do, then start talking budget before ever talking about whole life/term, ect.
Agents who try to sell by tearing down what you have usually don't last long. Rather than trying to convince them perm is bad and term is good, why not do a needs analysis, present options, and let them decide?
You don't say how old the WL is, that matters. Do NO HARM!
Have them consider a 10,15 or 20 year level term as an add on if they feel they need more coverage.
If "they" feel they need more coverage, they'll find the premium. You may be looking at the WL premium and deciding that's where your premium and commission is going to come from, because to you it seems the easiest path as it is already premium.
Right now you're coming off as an Art Williams kind of guy. Be professional, do no harm to the client. Understand replacement isn't necessarily improvement.. That's why you have to fill out the extra paperwork in most states.
An inplace established WL is a good thing. My policies do very well thanks. Especially when my investments have lost 40% of their value.
While I may agree with an agent who points out the need for extra coverage... asking me to tear down my house to buy and live in a tent (temporary shelter) makes no sense at all. If an agent can convience me of the need, I can find the money, even it means sack lunching it a couple days a week.
One of the first things I was taught in the life business is this.
Find the need, find the funds.
If you help them find the need for insurance, you can also help them find the money to pay for it. While replacing may be the best option that should not be your first line of attack.
You don't say how old the WL is, that matters. Do NO HARM!
Have them consider a 10,15 or 20 year level term as an add on if they feel they need more coverage.
If "they" feel they need more coverage, they'll find the premium. You may be looking at the WL premium and deciding that's where your premium and commission is going to come from, because to you it seems the easiest path as it is already premium.
Right now you're coming off as an Art Williams kind of guy. Be professional, do no harm to the client. Understand replacement isn't necessarily improvement.. That's why you have to fill out the extra paperwork in most states.
An inplace established WL is a good thing. My policies do very well thanks. Especially when my investments have lost 40% of their value.
While I may agree with an agent who points out the need for extra coverage... asking me to tear down my house to buy and live in a tent (temporary shelter) makes no sense at all. If an agent can convience me of the need, I can find the money, even it means sack lunching it a couple days a week.
Our job is not to get rid of the coverage they have unless they have a junk policy like an escalating UL that will lapse. Our job is to help them determine the coverage they need and then help them find the money to fund it.
To me it depends on who you're talking to. If you're in the hood, save your breath or start selling WL. If you're not you're going to need to educate, educate, educate. You don't have to look too far to find unbiased information regarding appropriate coverage amounts for the average family.
With regards to a straight WL conversion presentation always take a look at comparing what they have to a solid ROP term product. To me it's a lot easier to show them something that costs the same monthly with a considerably higher death benefit and leaves them with that 50k in hand in at the end of 30 years.
Something tells me the cash value in a par WL will be greater than 50k at the end of 30 years.
Originally Posted by WIN
To me it depends on who you're talking to. If you're in the hood, save your breath or start selling WL. If you're not you're going to need to educate, educate, educate. You don't have to look too far to find unbiased information regarding appropriate coverage amounts for the average family.
With regards to a straight WL conversion presentation always take a look at comparing what they have to a solid ROP term product. To me it's a lot easier to show them something that costs the same monthly with a considerably higher death benefit and leaves them with that 50k in hand in at the end of 30 years.
Something tells me the cash value in a par WL will be greater than 50k at the end of 30 years.
Didn't say it woudln't be. The point is also that the 50k in life insurance coverage is ridiculously inadequate but may be eating up a sizable portion of what's in the budget for life insurance.
Because you feel like they are underinsured: this screws everything up. Trust me on this.
I have 22+ years in this, I can tell you, for certain, if you go into a house and the person has whole life, and you start telling them they did a lousy job picking insurance for themselves, that insults them.
Look, when they bought the whole life, I'm sure the agent spent much time with them, showing them permanent insurance, insurance that is not term, insurance that they do not have to convert down the road to permanent. Term is usually sold with the intention of converting it- down the road to permanent. Well, it used to be sold like that.
The permanent insurance- is already in place with these folks. My advice to you is to leave it alone, and maybe add to it, maybe if they have 50K, add your 100K term to it so they have 150K total, or whatever the number is that they need. But don't try replacing whole life with term. Adding to it and having a term-perm blend, now that may be easier.
It's a lot like this: when millions of people voted for Clinton, then they started coming out with Lewinsky and all this stuff-and all the lies- people really did jump up to defend him. They felt like they had to defend their choice to vote for him. They got really defensive. Well, it's kind of like that-{ to a lesser degree} when you meet someone with whole life, they have to defend their choice, they don't want you telling them they are a fool -for their choice. They took the time to vote for whole life, so respect that.
Not to get political HomeService, but what lies would you be referring to? I actually have learned alot from your posts. Please don't tell me you are a left winger that believes the right wing is out to get you.
This is a situation that depending on your pov coming in means everything. For you folks that don't see the value in owning WL, there really isn't much anyone's going to say to change your thought process from [COLOR=red]"it's a problem."[/COLOR]
For those of us who don't see owning whole life as a problem, we're having trouble with the approach. I don't know if there's anything I can write that's going to convience an agent that sees wl as a problem to change their mind.
Easy - if they're still insurable (i.e. not on a preferred basis when they signed up and a Table 8 rating now), show them how much they can save or how much coverage they can add with a UL policy with secondary guarantees.
They can do a 1035 exchange with the cash value of the whole life policy to buy down the premium with no extra out of pocket expense. You may be surprised, but many people who sign up for whole life have no idea how the product works and that if you have a $300k death benefit with $150k in cash value, you still only get $300k if you die. Now if that same person had taken that $150k and 1035'd it into a UL, maybe they have a $1 million death benefit (these are just random numbers) for the same premium. Will these people need the cash value later in life? Will it be in an irrevocable trust (if so, whole life makes little sense)? What are their needs and goals for the policy? You get the idea.
"no idea how the product works and that if you have a $300k death benefit with $150k in cash value, you still only get $300k if you die"
Sorry you're incorrect. The death benefit for my whole life policies have been increasing every year but the first. There are more than "one" type of whole life available.
Now I'm not suggesting anyone give up selling term for whole life or anything like that but I thought I'd throw in a couple of thoughts.
1. More than 98% of term policies will expire or lapse without ever paying a death benefit.
2. 100% of the people you speak with will die someday. Some sooner, but a whole lot of them will die later.
3. Eventually term becomes cost prohobitive if you live long enough.
For simplicity's sake let's say you sell exactly 100 policies in your career. If you sell all term, only 2 will actually ever pay a death benefit. If you sold 100 whole life policies exactly 100 death benefits will be paid assuming premiums are paid properly (which of course they won't be).
At the end of your career, you would rather be which agent?
We're not miracle workers. We try to do the best job possible for the most people. We can't save everyone.
I would never recomend that a client do anyway WL completely for Term. But what I do recomend is maybe reducing the whole life and replacing the difference or more with term if its needed.
For new clients I usually do a mix....I had a family that wanted 300K on husband an wife.
So I did 25K WL and 275k Term.
------------------------------------ Professional Insurance Web Design
Quality & Custom Designed Insurance Websites starting at $349.95. Get your business on the web today!
Best Way to Sell Against Whole Life?
Linear Mode
