If you anticipate a prospect’s objections as part of your presentation, you can create easy closes. We named this strategy CheckMate Selling®, and here is an example using the Various Financial Alternatives module in the InsMark Illustration System:
George Baker, age 45, is considering a proposal for $500,000 of Indexed Universal Life illustrated at 7.50%. Premiums are $20,000 a year for 20 years. Starting at age 65, after tax policy cash flow of $60,000 a year is illustrated continuing to age 95 (withdrawals to basis; loans thereafter).
Like so many prospects, “compared to what” may loom large in George’s mind. Let’s confront this directly and compare the life policy to some alternatives using a CheckMate Selling® strategy:
- Taxable Account at 5.00%;
- Tax Exempt Account at 4:00%;
- Tax Deferred Account at 7.50%.
George is in a 40% tax bracket, and below is a summary of the comparative results:
Various Financial Alternatives
Account Values
1 Taxable account accruing values are shown after tax. Tax deferred account accruing values are also shown after tax since, unlike the life insurance, there is no way to access them without paying income tax.
Various Financial Alternatives
After Tax Retirement Cash Flow
($60,000 a year starting in year 21)
Column 1: Taxable account assets are depleted in year 31.
Column 2: Tax exempt account assets are depleted in year 33.
Column 3: Tax deferred account assets are depleted in year 38.
Column 4: Indexed UL values are not depleted.
Click here to review the illustration in detail.
Suppose George tells another adviser (maybe his CPA) that he is in the process of purchasing $500,000 of life insurance with a premium of $20,000 a year for the next 20 years. Suppose the CPA asks, “Why would you spend $20,000 for something you could get for $600?”
If you haven’t armed George with the information as to why, he may well be stumped for an answer ? and there goes your credibility. It’s far better to teach him “why” as part of your presentation. So Checkmate Selling® has a second component, a comparison to “buy term and invest the difference”. If you go to my Blog #4, you’ll see that when the cash flow exists to buy what you want, the purchase of term insurance can be a dreadful mistake.
If you don’t use the financial firepower of these two CheckMate Selling® concepts (there are others that I’ll cover in later Blogs), George may decide not to buy -- and you may never know why. They are also formidable motivators when used in conjunction with illustrations of executive benefits.
For a license to use the InsMark Illustration System, go to InsMark or contact Julie Nayeri at InsMark at julien@insmark.com or (888) InsMark (467-6275). Institutional inquiries should be made to David A. Grant, Senior Vice President ? Sales at (925) 543-0513 or dag@insmark.com.
If you are licensed for the InsMark Illustration System and would like to review the menu prompts we used for this analysis, please send us an email, and we will get the Case Data file (Workbook) right out to you. (Be sure to ask for the Workbook for Blog #17, “(CheckMate Selling)”.