Perspectives Q4 2022 Perspectives Q4 2022 | Page 32

TERM LIFE

Here ’ s the scoop !

Recently , Jackie & I took our two-year old granddaughter , Sophia , to a local ice cream shop . Mimi & Papa expected to “ help ” her finish off a dish of some exotic flavor , but that didn ’ t happen . Soph chose vanilla ice cream . Yep , vanilla , the most basic flavor of ice cream in the shop .
When it comes to life insurance conversations with the people we serve , every conversation comes down to two questions , “ How much ?” and “ What kind ?” Not that different from Sophia peering into the ice cream case .
After 25 years as a life insurance professional , you would think my conversations with people wanting to own life insurance would be even more complicated today . Nope . The longer I serve others in this profession , the more I realize life insurance conversations are very similar to choosing ice cream .
Dean Harder , Founder of H , focuses on helping people make meaningful financial decisions to realize and safeguard dreams . Financial professional and Board Member of Forum 400 , Harder is also author of Stop Pitching ! The Role of Conversations in the World of Sales .
The longer I serve others in this profession , the more I realize life insurance conversations are very similar to choosing ice cream .
Exoctic vs . vanilla
Perhaps the most missed conversation about life insurance is the “ How much ?” conversation . When I delivered a check for over $ 7mm to the widow of one of my best friends in life 10 years ago , I vividly remember saying to my buddy about 3 years prior , “ Phil , I know you love all the bells & whistles of the whole life insurance , I love those too . But all those bells & whistles are not going to provide the life you just told me you want Brenda and your kids to experience if you don ’ t come home one day .” He said , “ Let ’ s do the term life too .”
The over $ 4mm of individual term life insurance , along with some additional whole life and group term life delivered all of Phil ’ s future paychecks to his stay-at-home wife and their four young , adopted children , when he suddenly died at the age of 46 .
Vanilla ice cream is pure ice cream . No bells & whistles . Soph couldn ’ t have finished off a triple-scooped cone if she tried , regardless of the flavor .
How much ?
Have you ever considered the right amount of life insurance death benefit for a person who loves their family is perhaps the number of future paychecks they would earn if they lived until they retired someday ? If someone is 35 , earning $ 100,000 a year , with a desire to retire in 30 years , about $ 3mm is appropriate . A 50-year-old earning $ 200,000 a year , retiring in 10 years should consider about a $ 2mm amount . The “ How much ?” question is ideal for business situations too . “ How much money would you want your family to receive in exchange for their $ 5mm value in the business ? $ 5mm or some amount less ?” Term life is great to initially fund the buy / sell agreement .
Let ’ s stop making it complicated . It ’ s not .
Right time and place There is a time and a place for all the various flavors of life insurance , but term life is always a great flavor to share with your clients .
32 Perspectives Q4 2022