How do you convince people to buy cash value life insurance?

By Lew Nason

Insurance Pro Shop


If you want to sell more permanent, cash value life insurance, then you have to help your clients to convince themselves that they need and want the additional benefits of cash value life insurance.

Every day we get e-mails and phone calls asking, "What do you say to convince people that permanent, cash value life insurance is better than term insurance?"

The simple answer is,"You can't convince them!"

If you want to sell more permanent, cash value life insurance, then you have to help your clients to convince themselves that they need and want the additional benefits of cash value life insurance.

The problem is that cash value life insurance is not better than term insurance, if all you are looking for is the death benefit. Consider, for example, mortgage protection insurance. If all I see is that I need $200,000 to pay off a home mortgage for my family, and if I die in the next 30 years, then why do I need anything but 30 year term insurance? Isn't term insurance going to be the lowest cost over those 30 years?

However, if you were to ask me, "Would you like to pay off your mortgage five years early and save $79,000 in mortgage payments?", you might grab my attention and some interest. But, although it may sound good to me, it does mean spending more money that I don't have or want to spend right now.

Unless you help me to see that paying off my mortgage early is really important and a priority, it's just something I might consider in the future, if I have some extra money. However, if we talk about the importance and advantages of having my home paid off before I retire so I'll have more money to spend in retirement, then it could become a real priority in my mind.

Now, you'll have to show me why cash value life insurance may be the best way to pay off my mortgage early, versus just paying extra towards the mortgage each month. Plus, I'll need to understand the additional benefits of how I can use the cash value in my policy as an emergency fund, how it accumulates tax deferred, saving me on my income taxes and how I can access it tax free, without a penalty.

It's the same concept if you are using life insurance to replace income or fund a buy-sell agreement. If all they see is the need for the death benefit, then all they need is term insurance. You have to help your clients to convince themselves that cash value life insurance can help fill their other needs and wants.

How about discussing their retirement needs, a college education fund for their children or the cash needed in the future for a business buy out? Help them establish their priorities first, and then show them the additional benefits of cash value life insurance and how it can be used to kill two birds with one stone.