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What is your full insurance budget? • The insurance problog

Asking someone about their entire life insurance budget may seem strange as the conversation starts from the end first. Usually, most agents start by identifying the customer's need for a certain amount of death. But what if the desired result for the client is to grow the cash value as fast as possible? <! – ->

I know it seems like a question that Fast Eddie would ask you as soon as he went to the used car lot. You know the exercise, "What monthly payment do you need for me to get you in this car today?"

Sounds familiar to most of us. And no, that's obviously not what we're after when we interact with potential customers. But it may sound safe that way.

What we are actually trying to determine is much more nuanced than the very question, "what is your budget for whole life insurance?". It's not a sales tactic. We try to match your budget with your expectations and determine if the whole life insurance is worth it for you . <! – ->

Budgets are important and must be adapted to goals [19659008] I was on the phone with a potential client a couple of weeks ago and we talked about their goals, what they saw to achieve with the whole life policy they were considering etc.

When our conversation ended I asked "What is your budget?"

Immediately I felt that I had said something too direct. <! – ->

I have no excuse. The only explanation I can offer is that this lack of pace comes from several years of conducting these types of meetings. And honestly, I do not mean to ask it in a way that tries to squeeze out the most premium I can from a client but it dawned on me that it might sound like that?

This is really unfortunate because Brandon and I work very hard to add value, not be too selling. Of course, we have to sell policies in order for our business to survive. I do not think any of our clients are dissatisfied with our capitalist motives.

The whole life insurance and its moving parts

But here's the reality. If you tell me that you are looking for a participatory life policy that has the best chance of quickly accumulating cash value and that you need "x" death amounts, I immediately think about how we should

My next question, "So how did you really want to commit to politics "or" What is your budget for this plan "or" How much on an annual basis do you see applying the policy "all mean the same thing. The only reason I ask is that I immediately think of the most effective design for you to achieve what you're looking for.

In other words, I cut the premium dollars between the base policy premium, time mix and paid supplements. Well, I do not when I talk to you, but I have to when I design the policy.

Think about this …

For example, you can reach a death benefit of $ 500,000 on an entire life insurance policy with 5,000 USD in annual premium, or you can request $ 20,000 in annual pre mie and receive the same death benefit of $ 500,000. (Note that these figures are purely hypothetical and pulled them out of thin air)

Premium budget for the whole of life

If you commit to the larger premium expense (20,000 per year), you accelerate cash value growth within your policy. You take full advantage of the tax status of the cash accrual throughout your life insurance. And you can take the extra and add the magic paid supplements .

On the other hand, if you can only spend $ 5000 against the policy, that's fine, you just will not get the same quick accumulation on the cash value side of the ledger.

Pretty simple, right?

What you have to realize is that it is not the same as buying futures insurance where you would say, " How much will a 20-year period of 20 years drive me? " <! – ->

The whole life insurance has many more moving parts (and fortunately for everyone involved, Brandon and I have mastered the art of fine-tuning all of these parts to create a plan that comes as close as possible to cope all client goals).

Here is the bottom line

When we ask someone about their budget, it is not us who try to get them to pay more than is required for a certain death benefit. Keep in mind that 99% of the time (it's an official issue) we are dealing with customers who still only see the death benefit as a secondary problem.

Most people we work with want to use cash value. life insurance as a tool, a uncorrelated asset … not to mention that they do not need the death benefit or even want it but that is not their primary focus.

That's why we might think you & # 39; would be interested in committing more premiums than required for a particular death benefit. <! – ->

Perfectly logical … right? we minimize the death benefit to the lowest level we can get away from (working hard to keep the policy from becoming an MEC ) with for a certain premium. Most customers contact us with, " Hi, I would like to put $ 45,000 / year into a policy for the next 20 years, then turn on the income tap … can I do that? Our job is to maximize cash growth to make the best use of their premium dollars.

And I would be unhappy if I did not close with a shameless contact. If you or someone you know might be interested in talking about the use of cash life insurance as an alternative savings, a non-correlated asset, or just because they like to go against the flow of all pop culture financial "gurus", we are more than happy to help. Only use our contact form to get in touch with us.

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