Chances are, very few of your clients and prospects are millionaires. That’s why you should always consider the sales opportunity of a gift of life insurance. For the millions of “average” citizens (non-millionaires), gifts of life insurance offer some unique advantages.
Now, why life insurance? Well, there is a “frustration” level in many people who would love to make a sizable donation to an organization (church, charity); however, they lack the capital to make that donation. But, if they purchase a life insurance policy, the “substantial” donation has been made with small dollars — essentially cents on the dollar.
People buy life insurance for many reasons, but it’s primarily for LOVE — love for the family. The purchase is made to ensure the family’s financial well being when one of the breadwinners passes away. Well, that same logic, LOVE for an organization, applies when someone purchases a life insurance policy and names that organization the beneficiary of the proceeds.
We won’t discuss the potential tax deductions and other financial planning pluses by using life insurance as a funding vehicle — those issues can be discussed with a CPA/financial planner. Instead, let’s just focus on why life insurance is really an ideal funding vehicle. Some of the advantages of using life insurance for charitable giving:
Life insurance assures the size of the gift in advance. The organization will receive a guaranteed sum, promptly, and in cash, at the death of the insured/donor!
If the organization owns the policy, it may surrender the policy for its guaranteed cash value, or borrow on the cash value at an attractive interest rate, during the insured’s lifetime. (again, a “must check” with a CPA/financial planner)
So, on your next sales visit where the client says “I don’t need any more insurance”, ask that person about his/her favorite organization (church or charity). Ask the person if he/she would like to contribute “big” dollars with affordable dollars by using life insurance as a funding vehicle. Help that person dream that upon his/her passing, a sizable check can be issued to the organization of his/her choice. Yes, that life insurance policy will help ensure that the member’s favorite organization will receive a generous financial contribution when he or she is longer here.
So, when the client says “no” to life insurance, pivot to life insurance as a charitable gift — incredible sales potential.