When a businessman signed the personal guarantees from the bank, they are removing their family from being their first beneficiaries and replaced them with the bank. We need to point out that for every action taken now, there is a potential consequence at some future date.
We must help our client to realise that whilst they insure all their assets, the plant and machinery, vehicles, stock, even the desk and chair at which they sit, they have not insured the most valuable asset of all – themselves. It is not necessarily a lack of belief, more a lack of understanding. It is not the stock or the machinery that makes the money, it is the prospect (businessman), the only income producing asset in the business. It is important that our prospects understand that the people running a business are more valuable than the business they run.
We do not have to persuade a prospect who runs a business of the importance of insurance, they have already believe in the product. We just have to make them aware that they, and perhaps other key staff also, are more valuable than other assets they have already insured. Very few business people are not prepared to insure against catastrophe. Loss of profits through death or disability is much more permanent and much more damaging and therefore more in need of cover. We just have to slightly widen our prospect’s view of the risks of being in business. Two people in business together are like two people on a seesaw, balancing each other. When one gets off, the other falls off.
We can make the business partnership a fair relationship by insuring each of the business people for the full value of the business. When one of them dies, their family will receive cash to the full value of the partnership and the surviving partner will have the business.
A business, no matter how good it may be, nobody is certain of the loyalty of their clients or customers. Everything can be fine as long as the business people are around, but without the business people running the show, the competitors could have a field day. They will be around like wolves, waiting for business people’s family to make a slip and the wolves will move in to pick up the business. We can ensure that we can help to bring in enough cash in the event of the business people death, or disability, their family will be able to lock the doors and keep out the wolves.
The prospect will often say that their business cannot afford the premiums. If they cannot afford it, they should borrow the premium, as they can better afford to borrow and pay interest whilst the business people are here, running the business, than leave your family or your business partners to borrow and pay interest on 100%, without the prospect here to help run the business.
The choice still lies with the prospect. They can avoid the premium but they cannot avoid the problem. If they avoid the problem, they just leave the problem to their family, or their business partners. The premium is only ever a fraction of the size of the problem. The prospect do not have to buy the insurance but we have to point out where the problem is and point out the size of the problem, tell them it is going to occur and we just do not know when.