How To Convince Someone To Buy Life Insurance

Whether you have personal or corporate clients with you, start conversations that hold their attention. Instead of rambling about facts, figures, and other such information, bring life to an insurance policy that can help them out in the future.

how to convince someone to buy life insurance

Discuss specific insurance application examples. Tell inspiring stories about parents who left their struggling children small fortunes because of life insurance. Balance it with those who missed several opportunities to protect their families after death.

Some things are just priceless. When you have the protection of life insurance, you can get peace of mind that your family and loved ones will have financial security in the event of your death. It can also assist with debt payoff, replace lost income, and provide a diversity of investments for your portfolio.

If you own a business, purchasing a life insurance policy is particularly important. If you were to pass prematurely, your policy would cover your business obligations and debts. For business owners in a partnership, both partners should maintain a current policy for maximum protection.

Avoid the babel and niche down your offerings. It may prove beneficial to niche down your offers. In the least time given to you by your prospect, you can easily focus on explaining the life insurance clearly.

You can spread information only after you know their terms. So, ask them their opinions on life insurance. Get a clear view of where they stand on the topic of buying policies. And after getting a clear picture of their stance, fill them up with the necessary information.

Reasons to buy insurance are different for everyone. But the decision to purchase insurance is, at its core, all about providing financial security for yourself and the ones you care about. Learn why life insurance is important, and who needs it.

Buying life insurance protects your spouse and children from the potentially devastating financial losses that could result if something happened to you. It provides financial security, helps to pay off debts, helps to pay living expenses, and helps to pay any medical or final expenses.

Your life insurance policy can deliver a specified sum of money when you need it. Upon your death, your family will receive your policy payout immediately. And that death benefit is generally not subject to federal income taxes. For example, a $500,000 policy provides $500,000 in death benefit proceeds directly to your beneficiary.

5. Dividend potential One of the benefits of purchasing whole life insurance from New York Life is that you will be eligible to receive dividends.4 Although they are not guaranteed, when dividends are awarded, you can take them in cash, use them to offset your premiums, or use them to buy paid-up additional insurance that increases your coverage and cash value, use them to offset your premiums, or take them in cash.

1The life insurance death benefit is the amount that is paid when the policy is in effect and the insured dies. The insured is the person whose life is covered under the policy. Accessing the cash value of a Whole Life policy for special expenditures will reduce the available cash surrender value and the death benefit.2A living benefit is any benefit the policy owner can access while the insured is still living. Not all life insurance policies are designed to offer living benefits. 3All guarantees are based on the claims-paying ability of the issuer4While dividends are not guaranteed, eligible policy owners have received them for more than 160 years. Some policies are participating but are not expected to receive dividends.

Life insurance offers many benefits to both policyholders and their beneficiaries. While there are different types of life insurance policies that have different stipulations, the three main reasons people buy life insurance include:

More than half of Americans think life insurance is three times more expensive than it actually is. Millennials, in particular, overestimate the cost of life insurance by more than six times its actual cost. This misperception, sadly, causes most people to not even bother looking into their options.

The best way to overcome this roadblock: Present the value of life insurance upfront and encourage them to think of it as an investment rather than an expense. Show your clients the differences in policy costs now compared to getting them at a later time and how those costs can fluctuate as their health, situation, and life change. Let them know that the sooner they purchase a policy, the better. In fact, 40% of people say they wish they had purchased life insurance policies at a younger age since they can typically get lower premiums.

When it comes to how much coverage they should get, a good guideline is about seven to 10 times your annual salary. In 2019, the median wage was $19.33 per hour, which equates to roughly $40,000 a year. Using this model as an example, the average person should get between $280,000 and $400,000 in life insurance.

While a little over half of Americans have life insurance, 30 million American households are actually underinsured. This means that the majority of American families will struggle financially after the death of their policyholders.

With almost half of Americans lacking life insurance coverage and 27% of people only having group coverage (which is usually insufficient and rarely portable), there are likely many leads in your current book of business you could cross-sell.

However, life insurance comes with a specific benefit for student loan borrowers: A policy that covers the amount owed to lenders can act as a way of protecting those loans from becoming a loved one's burden.

Term life insurance offers coverage for a set period of time, say 20 years or 30 years. Once the term has expired, the policy terminates, unless you renew it for another term or convert it to a permanent or whole life policy, which can be much more expensive.

Whole life insurance, on the other hand, offers coverage for the remainder of your life as long as you pay the premiums. These policies come with a cash value account that accumulates on a tax-deferred basis.

A healthy 30-year-old man can expect to pay just under $18 a month for a 20-year term life insurance policy with a $250,000 death benefit, according to Policygenius, an online insurance marketplace. The average premium for a woman of the same age is about $15 a month.

For some high-net-worth individuals, life insurance can provide an opportunity to keep money in the family and shield it from taxes. In addition, a life insurance policy with an investment component and cash value is a good way to create tax-free savings, if you regularly max out your retirement accounts."}},"@type": "Question","name": "Can You Make Money off a Life Insurance Policy?","acceptedAnswer": "@type": "Answer","text": "If you purchase a permanent life insurance policy with a cash-value component, you can borrow from your policy. You can also sell or surrender your policy or borrow from your policy to get cash. However, an insurance policy in and of itself doesn't earn the policyholder much money, although their beneficiaries will monetarily benefit from it.","@type": "Question","name": "What Kind of Life Insurance Builds Wealth?","acceptedAnswer": "@type": "Answer","text": "Life insurance can build wealth in many ways, the primary one being the death benefit, which is passed along to your beneficiaries. This wealth transfer strategy is a way to immediately provide a cushion of wealth (depending on the death benefit amount) to surviving family members. A permanent policy, like whole or universal life, comes with a death benefit and cash component that may earn interest."]}]}] Investing Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All Simulator Login / Portfolio Trade Research My Games Leaderboard Economy Government Policy Monetary Policy Fiscal Policy View All Personal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All News Markets Companies Earnings Economy Crypto Personal Finance Government View All Reviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All Academy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All TradeSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.InvestingInvesting Stocks Bonds Fixed Income Mutual Funds ETFs Options 401(k) Roth IRA Fundamental Analysis Technical Analysis Markets View All SimulatorSimulator Login / Portfolio Trade Research My Games Leaderboard EconomyEconomy Government Policy Monetary Policy Fiscal Policy View All Personal FinancePersonal Finance Financial Literacy Retirement Budgeting Saving Taxes Home Ownership View All NewsNews Markets Companies Earnings Economy Crypto Personal Finance Government View All ReviewsReviews Best Online Brokers Best Life Insurance Companies Best CD Rates Best Savings Accounts Best Personal Loans Best Credit Repair Companies Best Mortgage Rates Best Auto Loan Rates Best Credit Cards View All AcademyAcademy Investing for Beginners Trading for Beginners Become a Day Trader Technical Analysis All Investing Courses All Trading Courses View All Financial Terms Newsletter About Us Follow Us Facebook Instagram LinkedIn TikTok Twitter YouTube Table of ContentsExpandTable of ContentsTax Laws Favor Life InsuranceBusiness Owner ProtectionLife Insurance as an AssetLife Insurance StrategiesOnly for the Wealthy?FAQsThe Bottom LineLife InsuranceStrategiesWhy the Wealthy Should Consider Buying Life InsuranceByBarbara A. Friedberg Full Bio LinkedIn Twitter Barbara Friedberg is a veteran investment portfolio manager, fintech consultant, and expert investor. She is a published author of several books.Learn about our editorial policiesUpdated January 05, 2023Reviewed by 041b061a72