CHEAPEST LIFE INSURANCE

Cheapest life insurance is short term cover where the insurance company is betting you don't die during the life of the policy.


I said earlier that financial advisors only promoted themselves to life insurance salesmen after they got their first death claim and this happened to me very earlier on in my career. I had started out believing in life insurance but became evangelical having had to deal with my first death claim.

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One Friday evening, Mike was on his way to an appointment when he passed a client who was standing outside in his garden talking to a neighbour. He had wanted a savings plan for his children and because his wife had no insurance, we had really given him a tough time and eventually persuaded hum, with his wife's help to add a further twenty thousand pounds worth of term assurance to the policy. In fact, we had nearly lost the sale because he was so opposed to spending a further 3.00 per month on something where he could see no benefit.

On the Monday morning the client rang to say that his wife had woken on the Saturday morning, sat up in bed and collapsed with a cerebral haemorrhage that killed her instantly. He was left to cope with two young children under the age of ten years old. Being our first death claim, I accompanied Mike to go and complete the paperwork.

We sat together on his sofa, unsure of what to say when he opened the conversation. "You know I really hated you guys for pressurising me into buying this life assurance policy and now I have to thank you because I don't know how I would have coped without this money."

Condolences offered and paperwork complete we drove away in silence. Despite the client's gratitude, we knew we had not done a good job. Twenty thousand pounds was nowhere near enough to help him through the next ten years and had we not bottled it for fear of losing the sale, we should have persuaded him to insure his wife for five times that amount. It was a sad lesson in pitiful salesmanship.

THE MOST EXPENSIVE LIFE INSURANCE

A sales manager says to one of his salesman "How are you doing this week?" to which the salesman replies. "Well, on Monday I sold a life insurance policy, Tuesday I didn't sell anything and on Wednesday the client phoned and cancelled the policy. So I think Tuesday has been my best day so far."

We are all going to die; few of us plan for it and when it happens it always comes at the most inconvenient of times. It's not too bad if you have had a long and meaningful life but families can be decimated both emotionally and financially when a loved one dies at a young age.

Life insurance policies being cancelled during the fourteen day cooling off period were a financial set back to any life insurance salesman because the commission was clawed back. In fact, if a policy lapsed in the first two years, some or all of the commission could be clawed back. Simply selling an insurance policy was not sufficient, you had to work hard to ensure the policy remained on the books.

I was sitting opposite Mike one day when he took a call from a client cancelling a policy he had just taken out. The client was moving house and wanted to cut his overheads but promised to take out another life assurance once he had settled in and he had got his finances sorted out.

About a month later the office took a call from the clients' wife asking us to call round that evening. "Must want to start that policy again." Said Mike and put her down in the diary. It was a nice feeling knowing you were going to get a certain sale of an evening.

We turned up in good time and settled ourselves on the sofa. "Where's Allan?" I asked. "Didn't your office tell you, Allan was walking back from cricket Sunday evening and died from a heart attack. Thank God he took out this policy with you." She said producing the documentation. Mike spoke first after an awful pause. "Allan cancelled the policy, didn't he tell you?"

She sat there for a minute and then got up and put the policy back on the shelf and we left knowing we had done a pretty poor job of not trying to persuade Allan to keep the policy going through what is one of the most stressful periods in anyone's life. Allan was thirty eight and had three children and no history of heart problems. He left his wife with nothing but a bitter taste in her mouth.

Incidences like that tend to harden life assurance sales people to face even the most belligerent of potential clients. Death claims didn't happen very often but when they did, if I or Mike had done a good job and the client was well protected, we knew whichever partner was left behind, the least of their troubles would be financial.

Over the years, as I gained experience I learned to counter every objection or insult thrown at me on people's doorsteps. The one thing I could be certain of was the fact that nobody ever had enough life insurance.

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