Children's Life Insurance - How to Start the Conversation?

[Newby]

I'm a captive P&C guy and, like all others, we have those pesky quotas.

I've been selling lots of term. Actually, I've been selling exclusively term. We have UL and WL, but I haven't sold any of it yet.

We also offer what most people consider to be a very innovative children's life insurance product. You pay a single premium and it provides coverage up to age 26. Then the insured has the option to convert it to a permanent insurance plan worth up to 5x the face amount with no health questions. They are given that opportunity again 5 more times. So a simple $10K term purchased on a 1 year old can be converted later for up to $300K of life insurance with virtually no health questions.

My problem is I am extremely uncomfortable talking about life insurance on children. I have a 2 year old and I don't know how comfortable I am with the whole life insurance on children concept.

I know many of you sell children's life so I was hoping for some advice. How do you start the conversation about it? How do you counteract the standard 'I don't believe in life insurance on children' response?

You start the conversation like this: Who do you have your kids life insurance with?

I don't think I've ever heard anyone respond with they don't believe in life insurance on children. If you think that's what you're going to get, you simply need to ask the question and prove yourself wrong.

 

[CaptiveBroke(r)]

Can anyone suggest carriers being used to accomplish this?

Not being very familiar with this, I would suggest a fixed annuity if the child is young enough but there may be tax implications when it's time to cash in for college.

Can anyone suggest the structure of a fixed annuity so that the taxes won't erode the cash value in 15-20 years?

 

[jfnyl]

Can anyone suggest the structure of a fixed annuity so that the taxes won't erode the cash value in 15-20 years?

I am not as well-versed in annuities as I am in whole life or custom whole life, so I may be speaking in error here....but this is precisely my rationale for placing a life policy over an annuity. The life policy is going to do lot more for the family and taxation is much less of an issue.

 

[InsuranceMonkey]

Every company I've worked for I've seen UL, VUL, term on kids. Surprising amount of term. I don't think there's right and wrong here, rather a dollar number the parents are OK with. Cost of insurance on children is so low on term it makes for an easy sale without also trying to sell a financial aspect to it as well.

 

[CommonwealthShield]

IMO, the key in the whole scenario
is that you don't believe in the product. Very hard to sell something that you dont believe in. I'm Captive as well and have the same quotas. I sell the same product and its very possible that we work for the same company. For all of the parents out there that think it is "morbid" to think of benefittig from their childs death, there are more that understand the idea of the product and its benefit.....at least that is what I have found.

 

[InsuranceMonkey]

There are some very real costs to a childs death.
1) Final hospital bills. Big deductable? Insurance that doesn't pay for everything? Hotel/travel costs to stay with child at a specialist center? Cha-ching. Adds up fast.

2) Burial is never cheap. 5-10k is easily hit.

3) The parents may want to take a month or two off work to grieve. (and bills still need to be paid if they're hourly workers. A lot of people can't just take time off because they need to.)

4) Family grief counceling can be very helpfull, but at $75/hour or more, that adds up faster than most budgets want it to.


True story. I once worked with an Agent who had 3 young boys. He, his wife and boys were on family vacation and while driving, the boys were messing around in the back seat, he got distracted, major auto accident. Because the boys were messing around they had their seat belts off, all three were killed in the crash. The Agent and his wife ended up taking 6 months off work to get their heads and hearts back together. I don't know the specifics, but I do know he had 3 small life policies on the boys, that was probably the only reason he and his wife were able to take a chunk of time off to try and pull their lives back together again.

Childrens policies in the 25-50k range makes very real sense. They allow parents to grieve without the unneeded and unwanted additional stress of worrying about finances out of control.

 

[0b1kanobee]

You start the conversation like this: Who do you have your kids life insurance with?

I don't think I've ever heard anyone respond with they don't believe in life insurance on children. If you think that's what you're going to get, you simply need to ask the question and prove yourself wrong.

You da man! Love it!

 

[somarco]

You start the conversation like this: Who do you have your kids life insurance with?

That's good.

Very good.

You are assuming the sale (in a manner of speaking). That kind of intro can be used for almost any product.

As for the "argument" in favor of child insurance, Monkey had the best.

All the talk about future insurability, cash accumulation, blah, blah comes across too much like a tin man pitch and can easily be deflected.

But when you speak to the emotion of life insurance, especially on kids, it changes.

What parent will look you in the eye and say they have no problem returning to work the next day after burying their child?

 

[WinoBlues]

Good post.

To add to reasons. From claims I have been part of.

Client’s son was at fault driver in multiple death auto accident. Client’s best friend's son was one of the deaths. Multiple law suits.

Parents co-sign for large student loans. Daughter dies senior year.

There are some very real costs to a childs death.
1) Final hospital bills. Big deductable? Insurance that doesn't pay for everything? Hotel/travel costs to stay with child at a specialist center? Cha-ching. Adds up fast.

2) Burial is never cheap. 5-10k is easily hit.

3) The parents may want to take a month or two off work to grieve. (and bills still need to be paid if they're hourly workers. A lot of people can't just take time off because they need to.)

4) Family grief counceling can be very helpfull, but at $75/hour or more, that adds up faster than most budgets want it to.


True story. I once worked with an Agent who had 3 young boys. He, his wife and boys were on family vacation and while driving, the boys were messing around in the back seat, he got distracted, major auto accident. Because the boys were messing around they had their seat belts off, all three were killed in the crash. The Agent and his wife ended up taking 6 months off work to get their heads and hearts back together. I don't know the specifics, but I do know he had 3 small life policies on the boys, that was probably the only reason he and his wife were able to take a chunk of time off to try and pull their lives back together again.

Childrens policies in the 25-50k range makes very real sense. They allow parents to grieve without the unneeded and unwanted additional stress of worrying about finances out of control.

 

[HeadCase]

I'm a captive P&C guy and, like all others, we have those pesky quotas.

I've been selling lots of term. Actually, I've been selling exclusively term. We have UL and WL, but I haven't sold any of it yet.

We also offer what most people consider to be a very innovative children's life insurance product. You pay a single premium and it provides coverage up to age 26. Then the insured has the option to convert it to a permanent insurance plan worth up to 5x the face amount with no health questions. They are given that opportunity again 5 more times. So a simple $10K term purchased on a 1 year old can be converted later for up to $300K of life insurance with virtually no health questions.

My problem is I am extremely uncomfortable talking about life insurance on children. I have a 2 year old and I don't know how comfortable I am with the whole life insurance on children concept.

I know many of you sell children's life so I was hoping for some advice. How do you start the conversation about it? How do you counteract the standard 'I don't believe in life insurance on children' response?

To sell life insurance for children you don't even have to sell it. Just do what I did and buy some insurance on your 2 year old then tell people about your experience in a casual conversation and why you did it. The next thing you know your scratching more paper.