Why Term over Final Expense?

Would love to hear why some of you sell Term and not Final Expense.

Thanks for your input.

Because you are dealing with seniors, who are usually in poorer health and MAY NOT qualify for a term product, or they may not need that much coverage.

Another factor is their age. Do you really want to sell someone at age 60 a 20 year term that is going to run out on them at age 80 if they didn't convert it (if it's even convertible). Would you like to be the one to explain to the client why you sold them something that is going to run out on them?

I'm not saying there aren't reasons a senior would need a term policy, but for simple burial and final expense needs, term is not the answer.
 
You need to be clearer in your question. There are a lot of different ways to interpret what you are asking.
 
Would love to hear why some of you sell Term and not Final Expense.

Thanks for your input.

Term is to cover insurance for temporary needs.

Whole Life is to cover their entire life time. FE is a version of whole life.

For example: young workers with families have a temporary need for insurance. They may or may not recognize it. But if the husband (or wife) dies young, during his working years (income generating years) the surviving family members have a huge financial problem from losing his income. They need a BIG term insurance policy to replace that income. That need goes away after the kids are raised and through college and the insured is retired and living off his retirement savings.

Since most people don't die younger than 65 and the term policies rarely have to pay a death claim, it's very, very cheap to protect this risk with term life insurance.

On the other hand a policy that is to cover funeral expenses needs to be permenant. The need is never going to end until you die. That's why all proper FE policies are whole-life.

Both types of policies are excellent at what they are designed to do. But when either policy is sold for the wrong purposes they are a bad choice.

Your 1st step as an agent is to determine how long they need (not want) the insurance to cover them.
 
Your question is not clear, however, I generally have much more cross selling opportunities with a 35 year old grad student who makes 30K a year with 2 kids than a 72 year old on Social security with no retirement savings. I am not going to get more than $100 a month from either one of them, it is just that the younger one has more potential for referals/cross selling.
 
Thanks for the responses.. Do you guys have agents that sell/market for both? or mainly agents that focus 100% on one or the other
 
Looking for benefits/reasons why an agent would focus on selling Term 100% vs selling FE 100%
 
Looking for benefits/reasons why an agent would focus on selling Term 100% vs selling FE 100%

Not many agents focus on selling Term alone. Seems most of those agents are telesales agents anymore. If you are marketing for Term, you're going to run into many situations that will be better suited for a UL. You'll even find times when a FE policy makes more sense. WinoBlues (Lee) sells Term, UL, and the occasional FE policy.
 
Because you are dealing with seniors, who are usually in poorer health and MAY NOT qualify for a term product, or they may not need that much coverage.

Another factor is their age. Do you really want to sell someone at age 60 a 20 year term that is going to run out on them at age 80 if they didn't convert it (if it's even convertible). Would you like to be the one to explain to the client why you sold them something that is going to run out on them?

I'm not saying there aren't reasons a senior would need a term policy, but for simple burial and final expense needs, term is not the answer.

I believe there is a gigantic market, currently almost totally ignored, for selling 20 year term to 60-year-olds (for example) to mitigate the loss of Social Security income if one spouse dies early in retirement.

Obviously it has to be explained properly and accurately, but that is a potential multi-billion-dollar market that is going begging at present, as far as I can tell.
 
One reason I got into the insurance business many years ago was because of the possibility of a residual income stream through renewals. But term policies stopped paying renewals several years ago. Final Expense policies, on the other hand, offer the largest renewal payouts of any life insurance product (although that seems to be gradually changing, too, in favor of higher FYC). Building a renewal base is important to me, so even though I still sell term when it's appropriate, it's not my primary focus.
 

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