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Full Coverage for Your Clients

By Mike Struebing, CLU, LUTCF

If you’ve ever found yourself grappling for a simple way to open up a discussion with a client or prospect about whether or not he has enough life insurance coverage, consider this strategy: Ask him to jot down the total amount of life insurance he owns. For argument’s sake, let’s say he has a $1,000,000 policy. Ask him to cross the last four zeroes off that amount. The remaining number—$100—is the daily benefit that the life insurance will provide. Then ask him: “How does that amount compare with your current earnings? And is it enough of a substitute for those earnings? How will your family get along on what you are leaving?”

As far as crossing off the zeroes, if you do the math, what you find is that the $100 equates to a return on your client’s money of about 4 percent a year—and that’s before taxes. Certainly, the crossing-off-zeroes strategy, as well as its stated 4 percent rate of return, does set you and your client up for some debate about whether or not the numbers are accurate. But that’s a good thing because you’ve got your client or prospect thinking about whether or not he’s underinsured. In my experience, people who go through this exercise find that it’s a real eye-opener—they don’t equate $500,000 in the bank with a $50-a-day return. If anything, this approach works well with people who are underinsured and have a dual household income of between $75,000 and $150,000 a year. It gets them thinking about whether or not they have enough coverage—and that’s your real objective.

Mike Struebing, CLU, LUTCF, is a member of the National Membership Committee and the National Committeeman of NAIFA Nebraska.

For more of this month’s sales ideas, see the article, “The CRT Advantage.”


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