Clients have never had more options for saving money than they do today. Consequently, today’s advisor must add the role of navigator to counselor, sage and prognosticator, among many others. That is no small task, given the numerous vehicles available. The life insurance marketplace is a microcosm of that financial services universe with hundreds of carriers, each with multiple products, riders and endorsements providing multiple features, benefits and opportunities for clients to save and accumulate wealth. Such a wide array of choices provides opportunities for success and growth for just about every client and their wide array of hopes and fears. However, with those same myriad choices come many opportunities for dissatisfaction and second-guessing.
Our products are more customizable than ever before, providing our clients with ever-more-affordable death benefit coverage, ever-more-valuable cash value accumulations and ever-more-flexible income options. Yet despite all of the innovation in product design and pricing that our industry has brought to the market, we still have clients who are dissatisfied because their policies have underperformed what was originally illustrated for them. In some cases, declining interest rates are to blame. In others, inconsistent premium payments have played a role. In still others, overly optimistic illustrated rates of return contributed. Those are all reasons. However, to the client looking at an underwhelming statement of account, they just sound like excuses.
We have the ability to do so much good with the products that we offer. We can help a family send their children to college and plan for retirement. We can help a small business owner protect what he has spent a lifetime building and reward those who have helped build it. We can help create a safety net for unexpected expenses after retirement and a path toward creating a legacy that outlasts our lifetimes. With so much potential good to be done, how do we help those clients who have become disillusioned with our industry because of past experiences? Just as important, how do we prevent more clients from joining their ranks? Put another way, how do we add to the ranks of clients who are satisfied—by far the majority?
We can start by setting proper expectations. We know that most life insurance products will work if properly funded and positioned. If we accept that, then in running illustrations we must focus on the probable or even the guaranteed, rather than the possible, and fund based on that. Is there a client in today’s environment that would be disappointed with a consistent five to six percent long term return? Sure there is—the client that was promised seven percent. If the client funds based on a lower rate of return and gets that rate of return, then we look like the sages they need us to be. If the rate of return is a little better, then we look like heroes.
Another step we can take is to stop propagating the “silver bullet” sales philosophy and acknowledge that no one single product or product design is the right solution for every client all of the time. Be your client’s navigator. If the right solution is IUL, sell IUL. If the right solution is whole life, sell whole life. Match the right product to the right client and promote the benefits of life insurance as the solution to your client. Promote, don’t disparage. Tell them why this solution is right, not why other solutions are wrong or bad. Clients don’t distinguish among types, to them it’s life insurance. Placing negative thoughts in their heads about life insurance only lends credibility to the person who tells them “you don’t want life insurance.”
It is with these thoughts in mind that I invite you to take another look at an old friend—participating whole life. Not in place of what you’re currently selling, but alongside it. The product on which many in the industry cut their teeth can be your source for organic growth in your practice or your agency. The story of strong guaranteed death benefits and cash values along with potential dividend returns still resonates. There are many clients whose primary concern is what will be (guarantees) rather than what might be (potential returns). Certainly many of those clients who have become disillusioned with our industry fall into that category. Focus on the guarantees built into participating whole life, and the first day of your client’s policy is the worst day it will ever have. With potential dividends, the only changes will be positive. For the client who has become disillusioned with our industry because of a policy that didn’t perform, is there any better message? Even among those clients who look for and demand higher rates of return, there are some who are not entirely comfortable with all of their eggs in one basket. A participating whole life policy in combination with another solution may garner additional business that otherwise would have gone elsewhere.
According to LIMRA, 35 percent of individual life premium written through the third quarter of 2015 was whole life. What part of that was yours in 2015? What part of that could be yours in 2016?
