You have a big problem. People think the products you sell are in unlimited supply. If they buy today, next month or next year, you will place their order. How can you create a sense of urgency that makes sense to your client?
1. Terms are changing. You’ve seen this with health insurance policies. A friend bought one. They liked the terms and told you about them. Later, you decided you wanted one just like it. Unfortunately, that product is no longer offered.
2. Rates are changing. We’ve been in a low-interest-rate environment for some time. Rates haven’t started going up yet. If an insurance company can’t get the return they need to deliver a guaranteed future rate on a product, they might announce a cutoff date. Policies written after that date get the new rate. Will it be lower?
3. What are you going to do with the money in the meantime? Sometimes people pay for insurance through monthly premiums. Other times they pay in a lump sum. Annuities are a good example. If a prospect has an abundant cash reserve, what’s their rationale for waiting?
4. Let’s hear your argument. This ties into the strategy above. As their advisor, you feel now is the right time to commit. You give your reasons, aligned with the economic backdrop of what’s currently happening. They want to wait. What’s their rationale for keeping the money where it is? Why do they think that’s a better place? What do they think the economy might do? They might not have a counterargument. You need to do this respectfully and politely.
5. You need protection now. Life insurance gives you peace of mind. If something happens to you, your loved ones are protected financially. If you think it’s wise to wait, do you feel you don’t need that level of protection until later?
6. Tax-deferred growth. Whole life insurance and annuities build cash value. This is true with other retirement savings vehicles. Isn’t it better to get that growth without having to possibly pay taxes on interest and capital gains in the meantime? Isn’t it better to defer taxes until later?
7. Paying taxes on that money now. This approach ties into the one above. If you were to earn the same rate of interest from a bank certificate of deposit as you would within an insurance product (you would check), why would you want to pay taxes now when you didn’t need to?
8. Can’t predict the future. The pandemic has taught us anything can happen. It’s best to be prepared for the unexpected.
9. It’s cheaper to buy five years too early than one minute too late. No one knows when their time is up. It’s not always a health issue. It could be a drunken driver going through a stop sign. There might not be time to buy insurance before you really need it.
Will you still be insurable then? You might think you are healthy until a doctor tells you that you aren’t. Generally speaking, insurance companies don’t write large policies at modest premiums for people who might not be around much longer. Certain insurance products require health exams. You don’t want to learn you either aren’t insurable or the premiums will be enormous because you waited too long.
In all of these situations, the objective is to make the case why acting promptly is in the prospect’s best interest. It’s a matter of polite persuasion, not entering into an adversarial situation.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book “Captivating the Wealthy Investor” is available on Amazon.
For more ideas on talking with clients about insurance:
- Communicate the value of life insurance (MDRT member exclusive)
- 10-minute lesson on selling whole life insurance (MDRT member exclusive)
- 10 minutes of favorite sales ideas from two industry greats (MDRT member exclusive)