Permanent Life Insurance: The Time Is Now!08/10/2020
I’ve always been the biggest believer in the power of permanent life insurance.
In today’s world, the case of permanent life insurance is even stronger. There’s NEVER been a greater need for permanent life insurance and for advisors to have that conversation with clients.
The simple reason why is that it provides certainty in an uncertain world. Right now, there is probably no better word to describe the times we are in than “uncertainty.”
What are the biggest fears on people’s minds right now? In the midst of this global pandemic, hands down, they are worried about job loss, serious illness, and death.
Permanent life insurance is probably the only tool in the world that can help address all three of these issues. Here’s how.
Accessibility to Cash
At the time of purchasing a permanent life insurance policy, nobody buys the product for its ability to provide access to cash. It’s an afterthought.
But cash is king in times of need. And life doesn’t go in a linear path. It throws some curveballs, and COVID-19 has been a big one for millions of people.
Despite the fact that the statistics on jobless claims have been improving, each week since the middle of March, we have seen jobless reports of an additional 1 million or more people and the overall unemployment rate stands at about 11% as of August 2020.
Typically, the cash value from a permanent life insurance policy can be accessed through a withdrawal or by taking out a loan against the policy. The fact that permanent life insurance comes with accessibility to cash, that doesn’t require a bank loan application or a cosigner, and can be quickly transferred to an individual’s bank account, is a huge deal.
Also, I have yet to ever see anybody ask their advisor when they need to access their cash value say, “Oh by the way, what was the rate of return on that policy since I started funding it?” Nobody cares. What they care about is that the money is there when they needed it most.
Waiver of Premium Feature
I often think about the word control. Most breadwinners have some degree of confidence that they will always figure out a way to provide for their family no matter what happens. They think even if they needed to work three jobs to create the necessary income, they’ll do whatever it takes.
However, there are a few things that are out of our control. One of them is in the event that you become disabled of have a long-term serious illness that prevents you from working.
Disability insurance obviously plays a critical role in managing this risk. However, from a life insurance perspective, the waiver of premium feature is another powerful tool.
This benefit is typically added as a rider. While it can differ from policy to policy, the basic premise is that if you (the policyholder) cannot do the job that you’ve been trained, educated and experienced to do, the life insurance company will make the premium payments on your behalf.
In other words, it literally becomes a self-funded long-term financial security tool. This is an incredibly important feature to speak to your clients about that doesn’t exist in any other financial instrument out there.
Guaranteed Death Benefit
Last, but definitely not least, is the guaranteed death benefit of permanent life insurance. Over 163,000 people in the U.S. have died from COVID-19 since March.
People want certainty that, if God forbid something were to happen to them, their family and loved ones would be OK financially. During times of a pandemic, the risks are obviously higher and so is the need and demand for having a guaranteed death benefit.
In fact, a recent Wall Street Journal article reported that some carriers were having to turn away business from some Americans who want a life insurance policy!
Whether it’s a young couple in their 30s, a married couple approaching retirement, or a senior looking to leave a legacy or avoid being a financial burden, life insurance is critically important. And permanent life insurance is the only kind that is guaranteed to provide a death benefit when you die.
The time to plan for this is not when you’re sick or in the midst of a global pandemic. It’s during a time in life, as early as possible, when you think you are never going to need it. The current crisis opens the door wider than ever before for this important conversation.
Life Insurance Provides Certainty in Uncertainty
The best outcome of a solid financial plan is that it gives you options. No one knows if or when you’ll get sick or disabled, be out of work, or how long you’ll live. That’s why permanent life insurance is the eighth wonder of the world – it gives you the flexibility to handle so many of life’s curveballs.
I hope that this gives you a renewed sense of purpose and commitment to talk to every single one of your prospects and clients about life insurance. Don’t wait for the next crisis. Don’t wait until they bring it up to you – by then, it’s usually too late. Start now with the foresight that the only thing certain in life is uncertainty.