Selling need. Not cost.

By Alan Friedman

When selling life insurance, emphasize the need, not just the cost. 

There is no principle in the business that will lead to more closed sales.

Having been in the insurance business for almost 40 years, I have seen many agents and consumers fall into the trap of focusing solely on the cost of premiums. While affordability is undoubtedly a crucial factor for many potential clients, it's essential to remember that selling life insurance is about much more than just numbers on a page. Successful agents recognize the importance of selling the need for life insurance and how it can protect and provide for loved ones in times of uncertainty.

This focus is particularly important when a case is approved other than applied for.

Recently, after a needs analysis was completed, an application was submitted on a 45-year-old male for $1 million of 20-year term insurance. We assumed he would qualify as a Preferred Best Non-Smoker. Unfortunately, based on his medical history, he was approved as a Standard Non-Smoker. This resulted in an 85% increase in premium. 

Let’s look at the numbers closely:

The annual premium at Preferred Best would have been $993, at Standard it is now $1,836 - an increase of $843.

In this scenario, what has changed?

Not the need, just the cost.

But although the increase in cost seemed substantial, the agent was still able to place the case. How? Because the sale was based on the need. The agent compared the increase in cost to that of coffee. Assuming that the cost of a single cup of coffee at Starbucks is $3, the increase in premium of $843 is equal to 281 cups of coffee, which is less than one cup of coffee per day. He asked client if providing his family with $1,000,000 of protection worth an additional cost of approximately ¾ of a cup of coffee per day? 

Long story short, he placed the case.

When selling life insurance, it's essential to shift the focus away from the cost of premiums and instead emphasize the need for protection and financial security. By educating clients about the various ways life insurance can benefit them and their families, you address their concerns about cost by emphasizing the value and benefits of life insurance relative to its cost. By highlighting the long-term value of coverage, you can help clients make informed decisions that provide peace of mind and security for the future even when faced with an adverse underwriting decision.

Selling life insurance isn't just about selling a policy; it's about helping clients protect what matters most.