SOLUTION
The client discovers that specific Leap strategies for reallocation of their money will provide them with greater benefits, money supply or both when compared to where and how they are currently allocating their money.
Goal
Learn Key Leap Strategies First
Become proficient at commonly used strategies to better fulfill the client’s needs with a customized solution.
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1
Objective
Leverage Consultative Practices to Achieve Greater Results
Integrate specific consultative practices to maximize the client’s understanding and consideration to adopt an alternate strategy.
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2
Objective
Follow the Same Approach to Position Each Strategy
Use a proven 4-step approach to position each strategy or money move to better enable the client to take action.
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3
Objective
Underscore the “Living Benefits” of the Permanent Life Insurance
Reinforce the value and living benefits of permanent life insurance during a client’s full economic life cycle.
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4
Objective
Learn Key Leap Strategies First
There are countless strategies or money moves that you and your client can work on together to analyze and test their effectiveness and value.
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Download the Master List of Leap Strategies & Money Moves
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There are four foundational money moves you will need to learn and become proficient at positioning:
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Buy Term & Save the Difference
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Term Opportunity Cost/Conversion (“True” Cost of Term)
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Person A Person B
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Retirement Pressures
In the upcoming, Follow the Same Approach to Position Each Strategy section, it will demonstrate the strategy and associated conversation to use with a client who is considering buying term and saving the difference.
Leverage Consultative Practices to Achieve
Greater Results
The key to a great strategy meeting is to incorporate more effective consultative habits and techniques to increase the clients understanding and motivation to consider an alternate financial strategy.
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Consultative practices that you should adopt and apply:
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Understand how Your Clients Learn, Think and Make Decisions
We all have a preferred learning style and way of thinking. When you are aware of your client’s preferred style your rapport will increase and future discussions will be more productive. Clients can often be divided into one of three preferred styles of learning.
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Visual Learning
The visual learner tends to use language that contains visual words and phrases.
2
Auditory Learning
Auditory thinking may be indicated by words and phrases.
3
Kinesthetic Learning
Kinesthetic learners like to handle product materials and to take notes.
Recognizing DISC personality profiles can also help you understand how clients make decisions. When you want to better engage with your clients, get a feel for the type of words they prefer to use and adapt to their personality style.
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DISC Personality Profiles
Direct, decisive, independent and to the point. Bottom line and results oriented. Often strong-willed, enjoys challenges and
immediate results.
Optimistic, social and outgoing. Enjoys being on teams, sharing openly, entertaining and motivating others.
Team players, cooperative and supportive of others. Prefers being in the background, working in a stable environment. Often good listeners and avoids
conflict and change.
Cautious and concerned. Focused on what is “correct.” Plans ahead and concerned about accuracy.
Introduce Your Strategy Incrementally
Incrementally introduce your strategic alternative to address how your client is currently managing their money. Laying it out all at once can be overwhelming for the client, instead, proceed with one move at a time.
Here’s why:
It ensures the client fully understands each step of the strategy before introducing the next step.
You can make
sure the client acknowledges there’s a problem and they want to do something about it.
It allows each move
to stand on its own as an integral part of the overall strategy.
It gives the client the opportunity to affirm that this is something that they want.
The client’s own discovery is crucial to the client taking action.
You position
yourself as the architect of financial strategies, not the seller of financial products.
The client
understands how each
step is reducing/
eliminating a problem
or adding a benefit
and/or increasing
money supply.
Tips and Considerations for Introducing a Strategy
Make sure that you don’t overwhelm the client. As we mentioned previously, show only one move at a time.
When using calculators, start with a few years at a time, begin with 5 years of columns and rows, instead of 30 years.
Engaging the client with a visual, mathematical, and tactile process actually increases their ability to absorb information while feeling like they are co-architects of proposed strategy.
Use Strategy Worksheets incrementally to build the story. Go slowly when using calculators and stop frequently to inquire if the client has questions and to confirm their understanding.
Be sensitive to not only what your clients are saying, but how they are saying it and the words they are using.
Make sure the client has a clear understanding of how the strategy works.
Emphasize the Key Objectives of Every Strategy
The goal is to improve the client’s entire financial situation over their lifetime by accelerating their results in a more efficient and effective manner to meet any economic challenges that they may face along the way.
When introducing any strategic alternative, it’s important to reinforce the following objectives:
1
Build more wealth or the ability to spend and enjoy more wealth
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Expose the client and their money to the same or less risk
3
Increase protection against lawsuit, disability, critical illness or premature death
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Achieve these results with no additional out-of-pocket outlay
Explain the Three Phases of Wealth
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Three phases of a client’s economic life cycle:
ACCUMULATION
Accumulation Phase: from today until retirement, help your client reach their Maximum Financial Potential.
Distribution Phase: the goal is to make sure they can spend their assets in retirement any way they want without ever worrying about running out of or outliving their money.
Conservation Phase: pass on up to 100% of their wealth to whom they want, when they want, and in the amount that they want.
Every dollar that a client has earmarked for wealth must be analyzed in three ways:
1
Will it allow them to build their wealth to maximum levels?
2
Will it allow them to spend and enjoy their wealth in retirement at maximum levels?
3
Will they be able to preserve and pass on the maximum amount of their wealth?
Follow the Same Approach to Position Each Strategy
Strategies or money moves should be introduced in the same manner every time and must take into consideration the following:
Strategies and moves should be done one at a time and then brought back to the macro.
Recommendations should be based on their current Present Position Model, and the desired result.
Each strategy or money move should be supported with a strategy worksheet and any associated calculators and product illustrations to validate the proposed strategy or move.
Every suggested strategy should demonstrate the result of alternative flows of money and the resulting increase in benefits, money supply or both.
Follow this four-step process to position a strategy more effectively:
STEP 1
Understand why the client is currently doing what they are doing.
STEP 2
Use a strategy worksheet to show the projection of what they are currently doing.
STEP 3
Outline the strategic alternative that will better achieve their needs and desired results.
STEP 4
If the client shows interest, show the Strategy Worksheet showing the projection of the strategic alternative.
For example, if your client is spending money on term insurance and saving/investing the difference, you would apply the four-step process in the following way:
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Step 1 – Understand Why the Client is Currently Doing What They Are Doing
As a result of your data collection, discussions with the client, and review of their Present Position Model, you’ve learned the following:
The client is 45 years old and plans to retire at age 65
They have a $500K 20-year Level Premium Term Life Policy for $740/year
They are saving $10,000/year into a non-qualified investment – earning 8% per year
Using the client’s model and Strategy Worksheet, start by asking:
What do you like most about your “Buy Term and Saving the Difference” strategy?
Typical responses may include:
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The low cost of term life insurance
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The fact that if they live, they will have wasted only a small amount of money on their term life insurance
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The growth potential of wherever they are saving the difference or compounding the interest in drawers S7 – G9.
After loading the client’s data in the Buy Term and Save the Difference calculator, point out the future projected value of their non-qualified investment in drawer G6 after 20 years, at age 65, would be $494,229.
If we were to fast forward 20 years and your investment account is worth $494,229 as we calculated, what would you do with your term life insurance that is expiring?
Most will respond that they would cancel their term life policy since their investment account is almost equal to the $500K term life insurance death benefit. In other words, they believe that they could “self-insure” themselves. If this is the answer that you receive, simply make note of this in drawer P9 on the client’s strategy worksheet.
Referencing their Present Position Model and inputs, ask the client:
If we are sitting here 20 years from now and your investment account has grown to be worth $494,229 and you did not need your term life policy because you lived, would you be pleased? Is this the result that you really WANT from this Buy Term and Save the Difference strategy?
Step 2 – Show the Client a Strategy Worksheet Showing the Projection of What They
Are Currently Doing
A simple yet powerful way to help illustrate this is to share the following visual with the client comparing their often-idyllic financial plan to the harsh reality that can occur over time.
If the client discovers the inherent problems in their buy term save the difference strategy, the following insights would be raised:
When you add it all up, the client loses $100,000’s if not $1,000,000’s by having term insurance. As a result, is potentially losing $100,000’s if not $1,000,000’s by having term insurance a concern for the client?
As we have just discovered, in order for you to accomplish the results that you want in the future (approximately $500K over 20 years) using a “Buy Term and Saving the Difference” strategy you must HOPE that….
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You never get sued
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You never get disabled or have a chronic illness
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You don’t die prematurely
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You have money saved up in your model to pay all taxes on the investment account
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You are invested in the market during the best period of time
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Your investment account balance grows to exceed the total amount of money that you will lose by having term life insurance
In considering all of these risks and costs as I have outlined and verified for you, you now realize that your “Buy Term and Save the Difference” strategy is a financial strategy that is based on HOPE.
Step 3 – Provide the Client with a Verbal Preview of a Strategic Alternative That Will Better Achieve Their Needs and Desired Results
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Give a high-level preview of how they can reallocate the same money using a strategy that will better achieve the things they need and want while helping to eliminate or minimize the problems, concerns, and cost associated with their current strategy.
Mr./Mrs. Client, if we could design and implement a strategy with the following benefits…
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We will use the same money (i.e., the amount of money they are currently allocating to their “Buy Term and Save the Difference” strategy).
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We will create either more money or the ability for you to spend and enjoy more money over the same period of time (typically from now until retirement).
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We will add protection in the event of a lawsuit.
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We will make sure your monthly savings (i.e., the amount of the “difference” of their “Buy Term and Save the Difference” strategy) will still be contributed even if you are totally disabled or have a chronic illness.
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We will make sure this strategy self-completes for your family in the event of your premature death.
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We will include guarantees to help offset market volatility.
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We will avoid and therefore recapture all or a large portion of your future tax costs.
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We will avoid and therefore recapture all or a large portion of your lost wealth associated with your term life insurance policy.
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We will help you spend, enjoy, and then pass on more of your wealth to your spouse, family and/or charity.
…can you think of any reason why you would not want to implement this strategy?!
Step 4 – Projection of the Strategic Alternative
If the client is committed to implementing the alternate strategy, provide them with a conceptual diagram of the strategy resulting in the desired solution. Using a Strategy Worksheet, build out the solution one move at a time.
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Download the sample Strategy Worksheet with step-by-step instructions
Diagramming Strategy Alternative to “Buying Term and Saving the Difference”
Using Leap’s Dimensions of Life Insurance calculator, click on the “Multiplier” tab. Here you can underscore all the benefits of permanent life insurance. The key to getting the client to adopt and stick with their new money strategy until retirement is to define how the death benefit and cash value in permanent life insurance can serve as Asset Insurance. This provides the best opportunity to maximize their retirement income without the worry they will outlive their money or not be able to leave a legacy to loved ones left behind.
Grow Retirement Income
Accumulation
up to age 65
Peace of Mind
Distribution
after age 65
Leave a Legacy
Conservation
after age 65
The death benefit allows the client to maximize their retirement income from their qualified plans, investment accounts, real estate, and low basis/highly accumulated assets during their retirement years. At death, their retirement assets that were exhausted in order to maximize retirement income are replenished for their spouse, family, and/or charity by the death benefit of their permanent life insurance.
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Cash value can be a source of retirement income that is not affected by the volatility of the market, referred as Non-Market Asset. Having access to a fairly predictable cash value allows them to keep their other retirement assets invested in the market and withdraw more income each year without the worry of a down market causing them to outlive their retirement assets.
Tips and Considerations for Diagramming Strategy Alternative
Use the Person A Person B calculator to explain and measure the increase in retirement income.
Use the Retirement Pressures presentation and calculator to explain the concept of using cash value.
Help your client to fully understand the “good” and “bad” aspects associated with their current money strategy (e.g., flexibility, control, risks, protection, liquidity, wastefulness, taxes, etc.).
Make the “good” aspects of their current money strategy, better while at the same time eliminating or reducing the “bad” aspects of their current financial situation.
Underscore the Value of Permanent Life Insurance
Permanent life insurance is an integral part of every client’s overall financial strategy. As long as people die, it’s the only product in existence that has the capacity to serve three distinct purposes during a client’s economic life cycle: accumulation, distribution and conservation.
Solution Success Factors​​​
Become proficient with the four foundational money moves
Recognize and adapt to your client’s learning styles
Always make sure your client has a clear understanding on how the strategy works
Understand the living benefits of permanent life insurance