Life Insurance: The Unholy Trinity

How do you sell people stuff? 

Simple. You scare people into the consequences of not having your product.  This sales technique was crafted by life insurance agents many, many moons ago.  And is still in force today, in many industries. 

 

  1. You don’t want to run out of money, do you?
  2. Do you know how many homes are broken into in the US per second?
  3. What if you die? What happens to your loved ones?

  

And the list goes on and on.  I’m sure you can come up with many others.  You’ve always got to be on the defense against people peddling doom because they have an ulterior motive; Separate you from your money. 

 

Of course, it’s not a bad thing to make people aware of the risk they’re taking. Please DO think about this question, “What if you die? What kind of situation are you leaving your family in?” That’s a very valid question and needs an answer.

 

Or “What if we do take another 55% decline in the SP 500, what does that do to your retirement plan?”

 

But the way these questions are asked should be in the context of your overall financial situation, without a quick one-size-fits-all solution that many peddlers-of-doom provide.  Let’s visualize this in a conversation with a good financial planner who may also be a life insurance agent.

 

“Mr. Jones, I appreciate you taking the time to speak with me today.  Let me ask you, what kind of financial situation would you leave your family in if you were to get killed on 400 while driving home from work today?”

 

That’s actually a very well phrased question. Notice how the good financial planner paints a picture of Mr. Jones dying on the very highway he drives every day.  In fact, Mr. Jones may even be mentally recalling an accident he saw just yesterday where he was thinking “that could have been me.” Good technique there.  This good financial planner also phrased his question in a meaningful way; “What kind of financial situation…” as opposed to “what happens if”. 

However, Mr. Jones is prepared and will no doubt be on guard because he knows the good financial planner is going to try to sell him something. Mr. Jones will say, “I have life insurance through work”, as if that’s the end of the conversation. Of course, he’s no clue what he has, maybe 3 times salary with some AD&D thrown in there? Who knows?

The good financial planner will dive into Mr. Jones’ answer deeper, though.  “That’s great you have coverage at work. Glad to see you’re taking advantage of it.  But let’s just say you’re making $50k a year, so 3 times salary means you have $150k.  Not too bad at all.   

May I ask how much your mortgage is?”

And we’re off.  Ultimately, the good financial planner who happens to sell life insurance, will ask enough questions of Mr. Jones so that Mr. Jones will acknowledge he really has no clue what he has, the cost, and that AD&D is not REAL life insurance. 

 

Once Mr Jones comes to this realization himself, by being led down the path from the professional financial planner who sells life insurance, Mr. Jones will be MUCH more accommodating to the idea of buying a new policy.  Because HE, Mr. Jones, sees he is lacking in this area of his financial plan. 

 

Now a rookie, or a cookie-cutter salesman, will simply say, “Mr. Jones, I appreciate you coming in today.  Let me ask you. Have you thought about what happens to your family WHEN you die?”

 

Mr. Jones, again prepared for this, will say, a bit smugly even,  “Oh, you’re talking about life insurance. I’m covered on that front. Have it at work. But thanks for asking.”   

 

But then the rookie, in a panic that he is losing the business, will say, “Well life insurance rates have dropped a LOT.  Maybe we can save you some money by getting a quote.”

 

Mr. Jones will say, “no. I’m good there.  I really just wanted to talk about a retirement strategy.”

 

Case closed on the life insurance discussion.  But this is unfortunate as Mr. Jones IS absolutely under-insured.  Just because he’s ignorant about it, remember ignorant means ‘don’t know”, it doesn’t mean one is stupid, doesn’t make the gaping hole in his financial plan go away.

 

Going back to the good financial planner who sells life insurance, if smart, he wouldn’t even bring up life insurance until he saw the totality of Mr. Jones’ financial situation. And then he will say, “I really appreciate you laying this out for me, sir. Incredibly helpful to get the lay of the land.  You’ve done an excellent job, here.”

 

And then the professional goes into what he’s done right.  Finally he wraps up with “there are a couple holes you’ll want to consider plugging.  Can I share those with you?”

 

To which Mr. Jones will invariably say, “sure.” In his mind, Mr. Jones is aware that THIS is the time of the sales pitch, so his defensive mechanism is up.

 

The good financial planner knows this too, though. He’s been down this road a million times to Sunday and recognizes HE can’t make people act.  Only the person on the other side of the table, in this case Mr. Jones, can make that determination. What the good financial planner will do is lay it out for him, what he sees are the points that could be improved on and let the chips fall where they may.

 

Mr. Jones will do 1 of 3 things at this point.  

  1. Act with the professionals help.  
  2. Act without the professionals help.
  3. Don’t act. 

 

Whatever path Mr. Jones takes is beyond the scope of the good financial planner.  But either way, the good financial planner can go home that night, KNOWING that he educated someone about the risks inherent in his financial plan who was previously ignorant. 

 

If Mr. Jones decides to accept those risks, that’s completely fine.  There is nothing wrong with taking on risk, as long as you’re aware of it!

 

But the good financial planner need not worry about Mr. Jones decision. He just moves on to educate someone else.  He knows that if he does this enough he will get more than enough business to handle. It’s the way the world works. 

 

In fact, the interesting thing is, the MORE you give, the more finds its way to you which allows you to give MORE.  It’s almost Biblical. (You really should read Randy Alcorn’s book, “The Treasure Principal – Unlocking the Secret of Joyful Giving”. This is one of my all time favorites, actually)

 

The good financial planner who happens to sell life insurance gives away some of his experience to anyone and everyone willing to hear.  Some folks will choose they want to pay MORE for his expertise and thus will hire him or buy life insurance from him or whatever. But for the good financial planner he knows he did what he was put on this earth to do; Educate.  And because he knows he can do no more than that, he leaves it up to the Mr. Jones’ of the world to decide what they want to do next. 

 

He worries not, because he believes in abundance, as the Treasure Principal teaches.

The rookie, or cookie-cutter salesman though, doesn’t believe in abundance.  He lives in scarcity. Thus if he lets Mr. Jones out the door without making a sale, he is worried there won’t be another prospect for him. So he’s going to throw everything at Mr. Jones.  Whatever he learned in sales training will be deployed in order to make that one sale.

 

Of course, by then, Mr. Jones will be almost frightened by this guy’s level of desperation.  And when he walks out the door he’ll say to himself, “whew. That was weird. I’m never doing that again.”

 

Yet the problems for Mr. Jones are still there!  They haven’t gone away just because a salesman couldn’t articulate them well.  And unfortunately if Mr. Jones does get killed driving home from work on 400 one evening, his family will face the consequences. 

 

In this scenario, the rookie, or cookie-cutter salesman, created a net loss to society all around. It would have been better for Mr. Jones and his family to have not met with that guy in the first place.

The moral of this story is just because you don’t understand YOUR risks, does not mean they don’t exist. Think about this stuff!  What would happen IF…

And secondly, if you are in sales position of some sort you really need to develop an abundance mind-set. Don’t live in fear of scarcity.  Living in fear is a sure way to run you out of business in a New York minute.  

© Copyright 2018 Heritage Wealth Planning