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Why is 10 pay so important to your client? Did you suggest it or did he? Why not just go monthly and purchase more coverage? Is there a reason not to do this?
Old American question
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Why is 10 pay so important to your client? Did you suggest it or did he? Why not just go monthly and purchase more coverage? Is there a reason not to do this?
- 5,990
In my as yet short career as an insurance agent, I get this asked this once a week: "Do you mean I got to make that payment for the rest of my life? Even if I lived to 90? Don't you have anything that ain't life pay?" I haven't sold a limited pay yet, but the interest is there. @Baseball7 is in my state, and I think he sells a bit of limited pay. There is demand for it. And if an agent brings it up it may be an edge over the last 10 agent's who were all peddling more or less the same thing.
Me: "I'm glad you asked Mrs. Jones! Yes, as a matter of fact we are one of the few agencies in the country that can help clients get a policy that's paid up within 10 years. Keep in mind it will be more expensive per month than a lifetime payment plan, much like a 15 year mortgage is more expensive per month than a 30 year mortgage. Let me share those prices with you too and then you can make a decision on which price is best for you and your budget Mrs. Jones"
Usually the 10 pays are best for people under age 60 but I can still make sense for those up to age 65.
- 5,944
I understand the older market has been some what primed for this... but in this case he loves filling out cards... I could under cut that premium enough to replace if I wanted to... and price means a lot to this market...
If he is a buyer (likes to fill out mail in cards) you have to protect the business... other wise your filling out paper work that won't stick.
In reality a life pay is almost always the better buy.. You can usually write an increased face amount for the same premium that you charge for a limited pay (especially a 20 pay) and at the end of the period for the limited pay, the life pay will have about the same amount of paid up insurance. Best of both worlds, more insurance during the premium period and paid up insurance at the end..
This PDF describes the OA products.. It says the increasing benefit increases at 5% per year for 20 years. That would be $7500 at the end of 20 years not $8400.
http://www.joinwg.com/pdf/Matching_the_Right_Product_to_the_Need.pdf
http://www.joinwg.com/pdf/Matching_the_Right_Product_to_the_Need.pdf
I don't do 20 pays only 10 pays so your 20 pay example wouldn't apply to my sales approach.
The Last 10 pay I did was on a 55 yr old lady who just purchased insurance about five months before I met with her. The price was pretty good so my last option was to show her a 10 pay option. When I did that she didn't know that a 10 pay was even an option. Keep in mind this happened BEFORE Settlers 10 pay option increased in price. Long story short the client started doing the math and it was a no-brainer. With my option they were going to pay about 6000 into her $10,000 plan and with her current lifetime option that I was replacing, if she lived to life expectancy (I showed her the chart) she was going to pay almost double than what she would have paid with mine.
Those numbers wouldn't be as nice today since Settlers has raised their 10 pay prices however but she & her husband happily decided on the 10 pay.
Also one of their biggest pros to the 10 pay was being done paying for it by age 65. Since they were currently working it wasn't a big deal to pay that extra cost now so that way when they retire they will have one less bill to worry about and more Social Security money in their pocket.
Don't get me wrong.. I am not criticizing you or anyone else for writing limited pays. Just making a statement about how a life pay may often be the better option. But that also creates a problem of trying get the client to understand what you are suggesting . And, even if they understand today, many will not remember it 5-10 years down the road.
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Far too often our clients forget much of what we tell them. Over the years I have been amazed at what a client thinks they have or did just after only a few years. Media hasn't helped the confusion factor much and deteriorating metal health is always a factor.
Often the bottom line after a sale has been made (even years after that sale) falls down to two items... the cost of the plan and how much they think of you as an agent... (based on how well they remember of course.)
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