As an insurance agent, you need to be aware that financial circumstances can vary greatly from client to client. This means you’ll need to familiarize yourself with each different insurance product your company offers. Different customer circumstances dictate different insurance needs. As an analogy, why not consider car manufacturers: each creates a variety of different models, and each of these models will appeal to a different type of consumer. As an insurance agent, you can do this in a similar fashion, by offering a variety of policies and products to suit the unique financial situations of each of your customers.
What Type Of Clients Are Suited To Permanent Insurance?
While term insurance will undoubtedly be the most popular form of policy you sell, there are lots of reasons why customers might want to consider a permanent form of life insurance, including the potential for coverage spanning an entire lifetime. There are several different types of permanent life insurance to choose from, including universal life insurance, whole life insurance and variable universal life insurance. In this article, we’re going to focus on three ways to sell permanent life insurance by highlighting its advantages:
1) Permanent Life Insurance Gains Cash Value
While all life insurance policies provide a death benefit to their beneficiaries, permanent life insurance policies actually earn additional real cash value. This cash value can be borrowed from the policy in the form of a policy loan, which provides some liquidity to the permanent policy. However, you should make it clear to prospective customers that the amount borrowed in cash value will reduce the overall death benefit available to the recipient in total.
2) Permanent Insurance Provides Permanent, Lifelong Coverage
When the required premium is paid, permanent policies will only terminate if the owner surrenders the policy. Certain policies mature at a stipulated age (at age 100, for example). This means that if the insured party is alive at 100, premiums no longer need to be paid, but the death benefit will still be distributed among recipients when the insured party dies. In some cases, policy rules may dictate that cash value is disbursed or the death benefit is paid out if the insured party lives to the maturity age of the policy.
3) Permanent Life Insurance Premiums Don’t Change
With a whole life insurance policy, your premiums are guaranteed to stay the same. The declared premium at the time of policy issuance will remain in place, regardless of the age of the insured party. This means that a $50,000 policy with a $500 annual premium will provide a death benefit of $50,000 when the insured party dies, whether they are 40 years old or 100. The death benefit remains the same, and so too does the premium. The $500 annual premium won’t change, regardless of how long the policy exists.
While it’s true that permanent life insurance can work out slightly more expensive than term life insurance, it’s worth pointing out to your prospective customers that it not only provides financial protection when the insured party dies; it also gains cash value which could be used during the lifetime of the insured party.
If you would like to know more about how to sell permanent life insurance policies, why not arrange some training with us?