How to help prospects see the value of life insurance

Selling insurance is not an easy task. In today’s time, prospective consumers need to be educated about the importance and value of the product for offer. The seller needs to play the role of an educator as well. In the case of life insurance this is more important than other products as people are afraid to talk about death and they do not want to believe that it will eventually happen. They always think it is a very faraway thing. In this case, it is important to educate the prospect about the value and importance of a life insurance policy. In order to make the prospects see the value of life insurance, there is a need to fully explain the concept of a life insurance policy and the types of plans available for them.

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A plethora of options available in the form of different plans offered by different insurance companies creates confusion for people thinking of buying a life insurance policy. This makes starting the process of buying a policy difficult. The different types of plans available are term insurance plan, Whole life insurance plan and guaranteed universal life insurance plan.

There are various important roles that are played by a life insurance policy. These are:

Income Replacement: Pay out from a life insurance policy can cover costs in uncertain circumstances and help in maintaining the quality of life of the family. In case the primary earner of the family dies, the family can obtain funds for their survival through the pay out from a life insurance policy.

Paying outstanding debts: Majority of people have debts, be it a mortgage, credit card bills or in the form of auto financing. In case of unexpected death of the insured, the outstanding debts can be taken care of through the amount received from the life insurance policy rather than the family being responsible for paying off those debts.

Children’s education: Life insurance can help in covering the tuitions and other educational costs of the children or other dependants.

Retirement Savings: Life insurance policy reduces the dependence of the family on the retirement pension and savings in case of unexpected death of the insured. A life insurance policy provides additional support to the family of the insured.

Tax Benefits: Premium paid on a life insurance policy is tax deductible under section 80C of the income tax act, 1961.

Wealth Creation: Most insurance policies also offer savings plan wherein the money is invested in various other profitable investments.

Loan Facility: Some insurance policies offer the option of borrowing a certain amount of money as a loan from the insurance company.  

Some helpful tips to make prospects see the value of life insurance plans are:

Don’t call it Life Insurance: People don’t readily respond to the words life insurance in a positive manner. Using terms like family coverage, income protection etc. are more likely to grab the attention of people and they might be more willing to invest in it.

Talk Numbers: Explain the importance of life insurance by talking about the financial obligations and the amount of money required by the family after the death of the insured. Ask the prospects questions like, would their family be able to maintain the same standard of living after his/her death. Let the prospect answer these questions and think for themselves rather than pushing them to.

Involve the entire family: Try to arrange meetings where the other members of the family are also present. A life insurance is meant to benefit the survivors. Talking to the one person who would not be at the benefiting end of the policy is not wise. Talking to the family will make it easier for the prospect to understand the value of a life insurance policy.

Quote Social Proof Statistics: Talk about how many people with comparable income and standard of living have subscribed for life insurance and how they should join the bandwagon. It is not wise to talk about how many people don’t have insurance but should subscribe it as it gives the prospect an excuse not to subscribe to the life insurance policy.

Talk about responsibility: Talk about the responsibility that the prospect has to shoulder and tell them how a life insurance policy is an important part of that responsibility. Talk about how the prospect has to fulfil their responsibility of helping their family carry on even after his or her death and how a life insurance policy is the best way to do it.

Wealth and Social status: Try to treat the prospect like they would want to be treated at a luxury store. Tell them how people with the same level of income have insurance covers and how they should also have one. After all, not everyone can afford a life insurance.

Prices: Make sure that the prospects know how cheap a life insurance policy can be. Stress on the fact that the eventual benefit of the policy outweighs the costs of the life insurance policy.

Main point: The main benefit of a life insurance policy is to protect families against unforeseen circumstances. Make sure that in the process of selling the policy, you don’t forget to drive across this point enough.

By educating the prospects about the importance and value of a life insurance policy in their life, you make them realize the need for one. Securing a life insurance cover offers peace of mind to the individual as it provides financial security to his/her loved ones. The various benefits of a life insurance when seen by the prospect, will make them realize the true value and urge them to invest in a life insurance policy.

Author: Justin Weinger

photo/ Gerd Altmann