It is a truism that life insurance is sold not bought. Here is a thought that may help.
Any business must make the distinction between user and customer. A user is anyone who uses the product or service. A customer is the one who pays. For many products they are one. Like Baskin and Robbins. I pay and then eat the product.
Only users can judge value.
Problems arise when the payer is not the user. Payers also have a value set, but it is not related to the way the product behaves. It is related to other factors like price, convenience and absence of complaints from the users.
Term life insurance is of little value to the customer. They will be dead when it passes to the eventual user. It is easy enough to take the customer away from their value set but you must do so consciously. Family development. Security for family and creditors, business continutity. If you do not establish the parameters of the baseline discussion, the client will. Worse, you do not know what that baseline will be.
Know that no one pays money without a comparison to baseline values. Their values.
If you establish that there is a duty to supply resources for surviving members of a family or for a business, then the product liquidates that liability. No worries is a present value. The price in comparison to all other methods of accomplishing the same thing is very low.
Disability, critical illness and long term care insurance have value to the customer and can be sold more conventionally. They create resources that the customer can use in their lifetime. Be careful. The user here is the future self and that one has only a little connection to present self.
Another alternative approach is to enlist the users in demanding that the customer acquire the product. Watch some commercials on children’s programs. Children do not buy this stuff, they pressure the customer, parents, to do so. Employee benefit sales sometimes arise this way.
It is not enough to know the user’s value, it is necessary to establish the value set for the people who pay. Think it through. Most people will exchange money for value when they know what they get and can see the fairness of the exchange.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.