The “Triangle of Protection”: simple to explain, simple for the customer to understand, and extremely powerful when demonstrated.
This conversation can be had with all homeowners, but it’s mandatory it’s had with NEW homeowners, as well as newly-written customers.
Start with a blank sheet of paper on your desk and explain:
“Mr. Customer, there are four main ways you can lose your home. THREE of them I can help you protect against.”
I draw a little picture of a house in the middle of the paper and then draw a triangle around it.
“The first way is due to a fire.” (write fire on the bottom of the triangle).
“The second way is due to loss of income. This can happen for one of three reasons. Sickness or injury, death or loss of job. Remember I said there is one I cannot protect against? That one is loss of job. Unless you want to be an insurance agent…then you can call me for that too!”
(Write disability on one side of the triangle and death on the other side).
“Now, we have a full replacement cost homeowners insurance policy in place for you that offers $225,000 in coverage and costs $54/month.” (write $225K and $54 below fire).
“How much is the monthly mortgage on your home?” (let’s say they answer $1,000).
“So then, we can make sure that if you are ever out of work for an extended period of time due to sickness or injury, your mortgage payment will keep getting paid and the cost of that policy is only $18/month.” (Write 1K mortgage payment and $18/month below disability).
“How much do you owe the bank for your home?” (let’s say they answer $150,000).
“So then, we can make sure that if you lose your life during the time you have that mortgage we will pay off the balance and leave the rest of the money to your family so they can stay in that home without having to make future payments. The cost of that is $23/month.” (write 150K and $23/month below life).
The next step of this conversation is the statistical probability. Start with fire…
“Mr. Customer, did you know that the statistical probability of your home burning to the ground over the next 30 years is less than half a percent?” (write 0.5% under fire).
“The statistical chance of you being out of work due to a sickness or injury at some point over the next 30 years is 32%.” (write 32% under disability)
“The statistical probability of you not being alive 30 years from now is just under 2%.” (write 2% under life).
“So as you look at this triangle of protection and the associated numbers, what stands out to you?”
Let them answer so they are engaged in the conversation. How they answer doesn’t matter, but some will notice the disproportionate cost of the home policy as compared to cost and risk.
I answer with this…
“Of the 3 protections we are looking at here. Which is the ONLY one that the mortgage company REQUIRED you to have?”
(They will know homeowners insurance is the answer to that question.)
And then I ask “Why is that?”
Most will know the answer to that too, but even if they say it, you say it again to reinforce the point:
“Because if the home burns down the mortgage company owns your home and they want their money! However, they do not require life or disability insurance. Why is that?”
(let them answer)
“Because if you cannot make payments for an extended period of time due to sickness, injury or death…they will simply come take your house back. Understand that your home policy is protecting the BANK’s interest. The life and disability protection on the mortgage protects YOUR interest.”
Then, finish by asking…
“Do you see the value in protecting your home with ALL 3 of these coverages?”
If they balk at price or object. Do what we do in the sales process…use the FEEL, FELT FOUND technique.
“I understand how you FEEL, Mr. Customer. When it comes to monthly budgets I always FELT the same way as you, keep the bills low. Then I got into this business and FOUND how devastating life can become when a family cannot make their mortgage payment due to sickness, injury or death. Suddenly the couple dollars a day for the extra protection didn’t seem so bad. This is 100% up to you though…what are your thoughts?”
Typically they will choose one of the two…life or disability.
Again, simple, easy to understand and powerful when it comes to talking to homeowners about the “Triangle of Protection.”