How to sell cash-value life insurance

By Lew Nason

Insurance Pro Shop


Are you struggling to sell cash-value life insurance? Are you having problems finding enough of the right prospects for life insurance and setting appointments? Are you lucky if you are able to sell one cash-value life insurance policy each week?

You're not alone. The average insurance agent or financial advisor is only selling between 35 and 50 cash value policies per year, and is earning $40,000 to $50,000 annually. That's roughly an average commission of $1,000 per case, with bonuses, etc. And, that's before we got really involved in this recession.

According to the U.S. Department of Labor, "The median annual wages of "wage and salary" insurance sales agents were $45,430 in May 2008. The middle 50 percent earned between $33,070 and $68,730. The lowest 10 percent had earnings of $26,120 or less, while the highest 10 percent earned more than $113,930. Median annual wages in May 2008 in the two industries employing the largest number of insurance sales agents were $48,150 for insurance carriers, and $44,450 for agencies, brokerages, and other insurance related activities."

According to LIMRA International, when it comes to cash-value insurance, whole life sales are picking up steam. Annual sales of whole life insurance were up 12 percent in the third quarter of 2009, compared with the same period of 2008. By contrast, annual sales of universal life and variable universal life insurance dropped 14 percent and 64 percent, respectively, throughout the same period. And term insurance sales, after several years of strong growth, have been flat.

Would you like to sell three to five cash value policies every week and earn $150,000 or more per year?

If you want to sell more cash-value life insurance, in spite of the current recession, then let's take a look at a few of the reasons agents and advisors continually struggle with selling cash-value life insurance.
  • Have you have fallen prey to the "buy term and invest the difference" myth? There is so much negative publicity out there about cash-value life insurance that most agents are afraid to even try to sell anything but term insurance. Mainly, it's because they don't know how to overcome the prospects' confusion about the value and validity of cash-value life insurance.

    Note: If you believe that you can consistently average a 12 percent return in the market, then buying term and investing the difference might make sense for you. However, do you really want to put all of your money at risk in the market? Do you want to have some safe money?

    Take the time to do the comparisons for yourself, and become a believer. Most good life insurance companies have illustration software that will compare their products to "buy term and invest the difference," and it clearly shows that cash-value life insurance is a much better buy at realistic stock market returns.

  • Do you understand how cash-value life insurance really works and how you and your prospects will truly benefit by owning it? Most agents who are trying to sell cash-value life insurance don't really understand the incredible power of tax deferral, or how cash-value life insurance can provide a tax-free income in retirement. Many also don't realize that because of the disability waiver of premiums and the death benefit, cash-value life insurance is the only self-completing college funding and/or supplemental retirement savings plan, or that its creditor-proof. Plus, it doesn't count as an asset when you apply for college financial aid. And by over-funding a cash-value life insurance policy up to the MEC guidelines, it can become "investment grade life insurance." These are just a few of the outstanding benefits that make cash-value life insurance a very unique savings vehicle and an exceptional buy.

  • Do you believe in cash-value life insurance enough to own it yourself? Most agents and advisors have all the same objections that their prospects have to buying cash-value life insurance. How can you sell something you don't really believe in and own yourself? If you want to sell cash-value life insurance, then do your homework. Learn everything you can about cash-value life insurance. Become a believer, and then buy it yourself. One of the best ways to learn about cash-value life insurance is to join NAIFA and take their life insurance courses. And, I would also recommend you read articles by Jeffery Reeves, along with his book Money for Life.
Overcoming the biggest problem to selling cash-value life insurance

While the above are a few of the major reasons why so many agents and advisors struggle with selling cash-value life insurance, they are not the primary reason. Consider: What's the most common objection a prospect gives you for not buying cash-value life insurance? "I can't afford it!"

The problem is that most sales people just expect their prospects to somehow come up with the additional money needed to buy their permanent cash-value life insurance. However, if the prospect is like most people today, they are probably just barely making it financially. Many people today are just a paycheck away from financial disaster. So, in effect, aren't you asking your prospects to decide, "What do I have to sacrifice in order to purchase your product?"

If you want your prospects to buy your permanent life insurance, then you must help them to "find the money." They must learn to reallocate their dollars in order to get what they need and want, without having to make huge sacrifices or change their current lifestyle.

So, where can you find the money to help your prospects afford cash-value life insurance? Here is a list of ideas that could help:
  • Raise the deductibles and waiting periods on their current insurance policies.

  • Remove unnecessary and/or expensive riders.

  • Cancel unneeded policies.

  • Free up money by refinancing their home and lowering their monthly mortgage payments.

  • Use equity from their home to eliminate credit card debt or an auto loan to free up those payments.

  • Reallocate payments currently going into qualified retirement plans, college funding vehicles, etc.
It all boils down to helping your prospects to set their financial priorities. Helping them to decide what's most important to them so they want to take action. Help your prospects get the life insurance protection they need in order to protect their family and help them to save money for their future using cash-value life insurance.

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