A true living benefit

By Vertical Vision

Vertical Vision


What if you could tell your client that if she continues to care for her health, she can receive a discount on life insurance?

Have you seen some of the new marketing campaigns that auto insurance carriers are running? The guy from the TV show The Unit comes on and, in a booming voice, discusses how great it would be to save money for safe driving. What a novel concept.

It is against the law not to have car insurance, but what if you never need it? You are essentially throwing money away, right? We understand that the risk is worth the reward. You may not need it, but if you do, you’ll be glad you have it. So auto insurance companies decided to pay drivers for safe behavior. If you go a period of time without an insurance claim, you get a discount.

This campaign has changed the view of car insurance. Sure, you have to have it, but at least you pay less if you are less of a risk. Why hasn’t a life insurance company figured this out?

I love the calls that I receive about which companies have the best living benefits. I hear the same plea for a company with critical illness, chronic illness and disability riders. I would argue that these are not living benefits. These are “on your way to death” benefits. Sure, the life insurance company pays a portion of the death benefit to your client, but they are smiling all the way to the bank.

Think about it. As a person approaches possible death, the insurance company buys out. They folded because they didn’t like their hand. They dropped the class before they failed. Whatever the analogy is, they are off the hook.

They only have to pay a portion of the death benefit, but only when you have had something happen that has put you closer to death. Am I the only one that does not get this?

I understand the safety net you provide to your clients. I understand that when discussing these riders, you can tell your client that they can enjoy the fruits of their labor while they are still living, but what about a true living benefit? What if you could use the auto insurance approach and tell your client that if she continues to care for her health, she can receive a discount?

Think about it just like the auto insurance example. If your client cares enough about her health to go to the doctor on a fairly regular basis and keeps her weight within a reasonable range, she should get a discount. So as the years go on, she gets this discount to her policy for being healthy, or at least attempting to stay that way.

Each time a premium is due, she pays a little less. Instead of just a flat dollar amount, let’s make it a percentage of the premium due. That way, as she gets older (when the cost of insurance goes up as well) the discount gets larger.

Pretty soon, she would have a paid-up policy. Think about that illustration presentation: “Mrs. Client, here is what your yearly premium will be to have a no-lapse guarantee forever. Oh, and here is the same policy if you decide to do your best to stay healthy over the years.”

She will inevitably ask, “Why does the premium get smaller and eventually go away?”

You will of course explain that the insurance company plans on rewarding her for her diligent effort to maintain her own health. You have created loyalty, synergy and most likely a sale. Now if only more life insurance companies offered this truly unique living benefit.