Basics of Life Insurance
What is the main purpose of life insurance?
To provide financial protection for loved ones in the event of the insured’s death. Death Benefit Protection.
What is a rider in life insurance?
An add-on provision that provides extra benefits or coverage.
What acronym is used to identify your ideal prospect?
A.I.M. Age, Income, Marriage (Couples)
What is are the first 2 steps of any presentation?
Build Rapport and 2 min story.
Kevin (29), single, no kids
Earning $80,000/year
Student loans: $30,000
Healthy, active lifestyle
Kevin says, “I don’t need life insurance because I don’t have dependents.”
How would you respond and position life insurance for him?
Life insurance is cheapest while young/healthy, locks in insurability, can cover debts, and builds cash value for future goals (like retirement or family planning later).
What is the difference between Term and Whole Life? Explain
Term provides coverage for a set period, Whole Life provides lifetime coverage with cash value.
What rider lets the insured access part of the death benefit if terminally ill?
Accelerated Death Benefit rider. Terminal Illness Rider. Living Benefits. Terminal Illness.
What’s a good way to overcome the objection “I don’t need it, I’m healthy”?
Remind them insurance is cheapest and easiest to qualify for while healthy
What does the DIME acronym stand for? Explain why for each letter.
DEBT - Your major debt transfers to your next of kin when you pass. Collect all the major debt over $3,000.
Income- Take the annual take home income and multiply it time 10. To replace your income for up to 10 years.
Mortgage- Take the remaining mortgage and add it to the insurance need.
E - Every child under 18 and 100,000 per child
Jake (32) and Maria (30)
Two kids (ages 2 and 4)
Jake earns $65,000/year, Maria is a stay-at-home mom
Mortgage: $200,000 remaining
Only coverage: $50,000 term group life through Jake’s employer
Jake asks if his group life policy is “enough coverage.”
What type of policy and coverage amount would you recommend for Jake, and why? Also What happens to his insurance, if he leaves the job?
A Term Life policy (20–30 years) with at least $500,000–$1,000,000 coverage to replace income, cover mortgage, and protect the kids until adulthood.
If he leaves the job he no longer has life insurance coverage.
What is a beneficiary?
The person(s) or entity who receives the death benefit when the insured passes.
What does “convertibility” in Term Life mean?
The option to convert a term policy into permanent coverage without medical exam.
What is your response to "I don't have time"
Do you like sales? Yes or No. Great let's talk about it. What's better today or tomorrow?
Solve this DIME.
Debt: $20,000 student loan, $10,000 car loan, $2800 medical debt
Income: $74,000
Mortgage: $400,000 home and $240,000 remaining
Education: Twins 5 years old. One 17 year old.
DIME: $1,310,000
Your clients income is $5,000 per month and they have $4800 per month in expenses and savings. The client puts $0 per month in savings. The clients insurance need is 1,500,000.
The client is desires to have to most amount of life insurance coverage and cash value but is a 29 year old female with great health. What type of product(s) would you suggest to the client?
Convertible term
Does Term Life build cash value? Explain
No, only permanent life insurance builds cash value.
Which policy type offers flexible premiums and death benefits?
Universal Life
What does it mean to “sell the need, not the product”?
Focus on solving the client’s financial problems, not just describing features of a policy.
What’s the benefit of using storytelling in sales?
Stories create emotional connection, making the need for insurance real instead of abstract.
Your clients income is $10,000 per month and they have $9800 per month in expenses and savings. The client puts $2000 per month in savings. The clients insurance need is 2,500,000.
The client is desires to have to most amount of life insurance coverage and cash value but is a 49 year old man with high blood pressure. What type of product(s) would you suggest to the client?
Hybrid coverage. Convertible term and a IUL.
What’s the most affordable type of life insurance for young families?
Term Life.
Name two policies that build cash value
Whole Life, Universal Life, Smart UL.
How would you respond to this. "I have a friend who tried it and it didn't work out?"
That's normal. You wouldn't quit school and drop out if your friend dropped out would you? The same goes for business.
Do you know anybody who tried to make it in real estate or to become a doctor or lawyer and quit? That doesn't mean real estate and school doesn't work, does it? So, whats better for you today or tomorrow?
A client says, “I can’t afford insurance right now.” What’s a strong response?
Reframe by comparing small daily costs ( “It’s less than a coffee a day”) and emphasize the greater financial risk of not being covered.
John (67) and Linda (65) fairly healthy for their age.
Children are grown, mortgage is paid off
Net worth: $1.5 million, mostly in investments
Concerned about estate taxes and leaving money to grandchildren. They want to pass wealth efficiently without burdening heirs with taxes.
What product would you suggest to them?
Fixed index annuities