Best Way to Sell Against Whole Life?

[Norwayguy]

Term is for temporary problems, permanent is for permanent problems. Use WL/UL for burial, etc. that they will HAVE to pay no matter what. Use term for debt or to protect income while kids are in the house, etc.

I was kind of surprised that most people DON'T want term. They all tell me they don't see the sense in paying for years and years and not getting anything in the end.

I spend most of my time dealing with people 50+ that are coming to the end of there level period on there term policies and guess what they are still alive and they still have needs. They could be like a lot of people that upsized there homes and now still have a rather large mortgage, might have had to take out massive student loans for there children etc....people have a habit of underestimating there needs and the length of those needs. That being said term is still a wonderful tool but that is all it is...I love it when I meet a couple that has dealt with a 1 trick pony agent before that trashes permanent products or term products and I spend the time to educate them about the pros and cons of both.

 

[STIBROKER]

Very thought out and good reply....

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

 

[fostever]

I keep reading post where it is said that the client won't keep this or that. So why sell it to them.

It's like a doctor giving out meds. It's not his fault of the patience does not take his meds. All he can do is try and give the patience what he needs.

You could say, doctor why write his a prescription, he is not going to take the meds. But the doctor still writes it.

It is true that a lot of clients will not keep what protection we have given to them. But we still have to try.

Yes, but does the doctor have the patience to wait for the patience to see the "patient" who doesn't respond when the nurse calls in the next patience? Try bookmarking dictionary.com before yer necks post!

 

[ProsperSBC]

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?

One simple question, "Is the amount of death benefit that your current plan has adequate for where your family is right now and how did you calculate the amount of life insurance you needed?" Then shut-up and listen. Their answer will tell you if you have a sale or not.

 

[xrac]

A Financial Bunker For Scary Times - Forbes.com

 

[TDY418]

A combination of WL/UL and a term product is really ideal for most clients. Taking in account needs and budget. I totally agree why replace WL with a term policy as others have stated not a great idea. Good thread hopefully this will help other agents who run across this scenario. "Knowledge is Power" as an insurance professional we are held accountable for the advice and recommendations we give.

 

[jamesflou]

Well Conseco has a term policy that is convertable for the life of the term, but will Conseco be around that long. Some companies offer conversions up to 5 and 10. Remember when a person converts a term to a whole later on it will be at the insureds attained age. The positive is they will not have to qualify.

 

[Guest]

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?

Thats easy just show them the four funny banking rules of whole life.
Show them the low return on their so called investment part of WL, witch they will never see unless they surrender the policy.
If they borrow against the cash value and it does not get payed back and the insured dies the benificiary only recieves the face value less the monies borrowed.
Not to mention the price tag of WL.

 

[LGilmore]

"Thats easy just show them the four funny banking rules of whole life.
Show them the low return on their so called investment part of WL, witch they will never see unless they surrender the policy.
If they borrow against the cash value and it does not get payed back and the insured dies the benificiary only recieves the face value less the monies borrowed.
Not to mention the price tag of WL."

racjac... become a student of insurance, not just a flunky for one company. Learn Mutual vs. Stock for starters. This would be where taking continuing ed would help.

 

[SalemInsuranceGuy]

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?

I think you've already answered your own question to some extent. You're concerned that if they died today there is only a 50k death benefit. Let's say we pay 10k for the funeral and final medical expenses and now you have 40k left. How long will that last? (Let them answer) Then what? (Usually they will be disturbed at this point and not know).

Let me say I'm pro whole life, I'm also pro term life, pro UL, pro EIUL, etc. I'm pro whatever life policy will be in place when the person dies.

After you've made them realize they don't have enough, I'd tell them they did a good thing buying the policy they have. At least it's something 50k. But let's assume they really need 500k. Ok we're 450k short of what we really need. Then come up with some options on how to cover it. Find out what's in the budget. Show them another 450k or 500k of term at 10, 15, 20, 30 year rates. If they can afford it then your job is done and I'd leave the other policy in place. If they're budget is maxed out and they can't afford a 10 year leavel term of 500k without dumping the whole life, then replace the whole life. None of us know when we're going to die. The purpose of insurance is protect that risk without gambling. So that's why we buy the death benefit we can as if we were going to die today. If there is more in the budget after that then a combo of cash value life can be good. I'd tell them, look there is nothing wrong with the policy you currently have. The problem is you don't have enough coverage. Now we need to find the best way to take care of that.