Not every sale can be a ‘whale’

Everyone wants the whale sale. Who wouldn’t love to have all of the large premium, large face amount, large target premium cases they can get?

The standard case study these days seems to be for at least a $1 million death benefit or $10,000-$25,000 premium per year for 20 years with income via policy loans and withdrawals afterward. The outcomes from those sales to the families purchasing those policies could be truly life-changing. But don’t forget about the impact a life insurance sale of any size can have on clients and their loved ones.

My mom

My mother died earlier this year. She was by no means well-off by American standards. She lived on Social Security checks and, as my father was a veteran who predeceased her, she received money from the Veterans Administration. She was unable to work for several years due to nerve issues that left her first using a walker, then a wheelchair.

She did not make life insurance a priority until around 2010. By that point, she was not able to qualify for favorable rates or policies with meaningful long-term care or chronic illness benefits. I discussed some options with her numerous times and showed her how much she could expect to pay for a variety of smaller face amount options that could fit her budget. These policies fit under the larger umbrella of simplified issue and guaranteed issue life products.

Let’s pause our story to ask, “what is simplified issue and what is guaranteed issue?”

Simplified vs. guaranteed issue

Simplified issue underwriting means that clients have the potential for no medical requirements during the underwriting process. Underwriting decisions generally are based on answers to questions on the application and information available on electronic databases, typically with an accept or decline decision, with accepted cases issued as non-tobacco or tobacco use. SI is generally for clients who are older or have medical issues that could preclude them from qualifying for carriers’ accelerated underwriting programs.

Guaranteed issue underwriting is generally for those who cannot qualify for life insurance based on medical or lifestyle issues. There are no medical exams, health or lifestyle questions, and no underwriting. It is the least invasive but most expensive per $1,000 type of life insurance available.

Every little bit helps

My mom did some research, made some phone calls and purchased a variety of smaller face amount policies ranging from $5,000 to $50,000 that did not require much, if any, medical underwriting. Her mixture of policies might not make a producer’s typical “big case” list, but they certainly make the “big deal to the beneficiaries” list. It is a final way for your loved ones to take care of their family, and every little bit helps and means something.

Life insurance can turn cents into dollars. The fact that life insurance death benefit checks are tax-free on both a state and federal level cannot be overstated because the beneficiaries can trust that they can keep what they receive.

Every policy can help a family, whether the benefit lasts months or years. Every policy that can be sold is worth the time to sell because every policy can change a family’s future to some degree. Make sure to pay attention to the smaller fish in the sea while keeping an eye out for the whales.

Jason Patterson, ALMI, ACS, is a life product analyst at Crump Life Insurance Services. Jason may be contacted at [email protected].

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Jason Patterson, ALMI, ACS, is a life product analyst at Crump Life Insurance Services. Jason may be contacted at [email protected].