Include these benefits when pitching life insurance to clients or prospects
Life insurance is one of the trickiest insurance products to sell. Unlike auto and health insurance, there are no laws that require you to be covered in the event of a tragedy. For this reason, it can be harder to generate life insurance leads – in addition to their complexity.
Life insurance is a fundamental part of a responsible and reliable financial strategy. Unfortunately, 49% of the adult population doesn’t have any kind of life insurance. Many of these consumers don’t see the value in life insurance – because it’s too expensive, too complex or impossible for them to understand. This dangerous view of life insurance, leaves their families unprotected in the event of a tragedy. As a life insurance agent and marketer, this means that there are plenty of prospects out there who are still in need of coverage.
One of the reasons people don’t invest in life insurance is because they think it has limited use such as covering funeral costs or paying off a mortgage. Fortunately, the opposite is true. Life insurance is highly versatile, customizable and often perfect for creating a comfortable financial cushion for the future.
As a life insurance agent, you know this – but in many cases your insurance prospects won’t. Here’s a look at some of the uses for life insurance that many people haven’t considered to help you sell more life insurance.
Not too many of us have enough property or money put away to leave behind a large inheritance – but even if your clients do, it can be difficult to provide an equal inheritance to multiple people (spouses, children, close family members, partners). Life insurance provides a solution to this problem. It allows the client to give the monetary value of an asset to one heir, while leaving the asset itself to another heir. So rather than having to liquidate an asset to distribute the cash among the family, life insurance can provide a cash value equal to that of the asset itself. A business owner can therefore give a business to one of his/her children, while also giving the cash value of a business to the other child uninterested in running a company.
Protecting Your Business
If your client runs a business, they can use their life insurance “cash value” generated from their long-term investments to pay the premiums on a corporate-owned life insurance policy, or COLI. A COLI policy gives businesses the opportunity to fund benefit plan expenses, while increasing net income for the company overall. Companies that have substantial costs to pay out for group life, medical and other insurance plans can finance these costs with COLI. They can earn a competitive after-tax yield when compared to other investments, act as a hedge against benefit liabilities, match the long-term nature of benefit expenses, and more. COLI death benefits can help your client’s company recover the costs of the plan over the long-term. Corporate packages can offer several advantages that other policies can’t match while promoting growth and limited risk.
Life insurance policies can offer policy holders a tax-free solution to their financial needs, upon the insured’s death. While the client is living, it’s sometimes possible to take tax-free loans from the cash value of the policy. While the client will have to pay interest on these loans, they will not pay taxes on the money received. With some policies, the interest rate can be lower on this type of loan than a traditional bank loan.
Clients may be able to withdraw funds from their life insurance cash value as a source of additional income to cover a wide range of costs from mortgage payments to healthcare bills. Some financial planners suggest using life insurance to cover estate taxes so their other investments can continue to thrive, unimpeded by taxes, beyond the death of the insured.
Planning for Your Legacy
Life insurance can be used to help a business partner maintain the business after a client’s passing; in addition to, helping their family cover costs when they have passed. As a tax-free source of money, the policy recipient can use the life insurance to pay everything from charitable contributions, to paying off debts.
Knowing the many ways clients can use life insurance can help you sell life insurance to new prospects, as well as cross sell to existing clients.
Now that you’ve got a strategy for growth, sign up to become a life insurance lead buyer with Parasol Leads. By buying life insurance leads from Parasol Leads, you’ll have a steady stream of life insurance leads to work, eliminating time spent prospecting for leads. You’ll also reduce your marketing costs. Learn more about our life insurance lead generation efforts, how to buy life insurance leads, our filters and more by contact us today.