I recently received a one-page description of life insurance. The original author is unknown, but it appeared by the style and wording to have been written some time ago. This description of life insurance made me think of where our industry is today and where we need to focus our energy tomorrow: on the growth of permanent life insurance.
Too many of the newer agents in our industry don’t understand what permanent life insurance really provides to our clients or have not been in the business long enough to have experienced a death claim, but that’s when the true magic of life insurance is understood. Have you ever had a client call to say they had too much cash value at a time when they needed access to cash, or a beneficiary tell you they didn’t need or want the death proceeds? Probably not.
Financial pundits tell their readers they should only buy term insurance and invest the difference and never purchase permanent life insurance. Why? Because they say it is a bad investment. But how many of our clients actually invest the difference in wealth building accounts or products? Very few. Most spend the money to maintain their lifestyle.
What happens if the term insurance terminates at a time when the client’s health isn’t good, and he or she is not able to renew the policy or cannot afford the guaranteed premium rates? Wouldn’t the client have been better served with a permanent policy that cannot be outlived?
If the client has been able to build wealth, but it’s in bricks, stone and steel, or needs to be retained for a long period of time to achieve maximum value, do these same advisors recommend that these assets be sold at a loss? Permanent life insurance, “the worst investment,” becomes the best investment at death, because the cost has only been pennies for each dollar of death benefit provided. It pays the most at a time when it is needed the most, a time when financial certainty is of the utmost importance.
I have revised the wording of this description to be more appropriate for today and wanted to share it with you. This does a superb job of putting life insurance in perspective and would be an excellent piece to deliver with your clients’ policies.
I am a life insurance policy.
I am a piece of paper, a drop of ink and a few pennies of premium.
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