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Stop Acting Rich: Buy Life Insurance

By Thomas J. Stanley on Mar 23rd, 2010 in Lessons Learned

Some of the richest people in America have little or no life insurance. Many billionaires, for example, believe that they are essentially self insured. And who could argue with those who have a billion dollars backing them? But what about those high income producers who have low levels of wealth and have family members who are dependent upon them? Too many of them have little or no life insurance. They need to stop acting rich and protect their families. High income does not translate into being self insured.    

It is not easy to sell life insurance products, even to people who are high income producers. Often, prospective customers find it difficult to conceptualize the need for such products. This is especially true for affluent prospects who are under 40 years of age. Many of these prospects consider premature death so unlikely that it does not warrant the “high premium” associated with a large amount of life insurance. Those who have life insurance often purchase much less than they should.

How can marketers of life insurance encourage the affluent, especially the younger ones, to become more sensitive to the need for their products? In a conversation with a reporter from The Wall Street Journal, I learned about a unique technique developed by an extraordinary sales professional (ESP) whom he had encountered.

This ESP concluded that verbal cues were not strong enough to convince insensitive prospects that they needed substantial amounts of life insurance and that visual cues had to be used to break down the resistance of such prospects.

He spent his spare time walking through cemeteries, where he sought fresh graves with flowers around and on top and with gravestones or markers indicating that the deceased had died at under 40 years of age! He took pictures of such graves, focusing on the “critical dates.” Then, when he encountered the usual objection (“But I don’t need life insurance-I’m too young to think about such problems”), he would extract several of his visual cues from his briefcase and hand them to the affluent prospect. After a brief moment, he would suggest to the now sensitized prospect, “All of these people probably thought they were too young to need life insurance.”

3 responses to “Stop Acting Rich: Buy Life Insurance”

  1. JS says:

    With all due respect to the life insurance industry and the marginal benefits they provide to society – that sounds like an insurance agent’s trick….

    Life insurance is necessary for the breadwinner – who checks out early – so the spouse and children can maintain their lifestyle – thats all.

  2. James Morgan - Puritan Financial Advisor says:

    This ESP concluded that verbal cues were not strong enough to convince insensitive prospects that they needed substantial amounts of life insurance and that visual cues had to be used to break down the resistance of such prospects.

  3. Drew says:

    I’d love to hear your take on cash value life insurance policies vs. buying term and investing the difference.

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