If you’re looking to increase sales of insurance products and develop deeper client relationships, you should consider applying a modernized version of the old-school sales technique known as the “will funding” concept.

In its earliest form, the approach involved getting your clients to consider the immediate costs and the potential problems that could arise upon their deaths — and then showing how life insurance would save the day.

Experienced insurance advisors with financial planning designations say that with a few tweaks, this basic approach can still serve as a focused strategy to urge your clients to consider risk management and estate planning.

There may be a vast market in Canada to which this strategy might appeal, says Jim Ruta, an insurance industry consultant and president of the Expert Institute in Burlington, Ont. Some studies, he says, put the percentage of Canadians without a will at 60%.

“It’s a way to cut through the noise and get some clients interested,” Ruta says of the will-funding sales method. “And clients might be more interested in this than sitting down to lay out an entire financial plan.”

Ruta has added a catchy tool to the old technique to make it more engaging for clients. He has drafted an “un-will,” a mock document that includes 16 paragraphs describing the hazards of dying intestate — without a will. One by one, the “un-will” lists the unwanted outcomes, up to the point of absurdity.

Meticulously detailed, the “un-will” describes the costs, the time and the lack of control survivors experience when an estate is settled by the government. The “un-will” hands over to the state the power to distribute heirloom keepsakes willy-nilly; it also states that any business owned by the deceased can be disposed of, giving “no thought to employees, partners, shareholders and their families.”

Many clients will be familiar with the main benefit of a will: it enables them to control what assets will be distributed to whom when they die. But more important to you, as an advisor, Ruta says, the discussion motivates your clients to start thinking about what they want to happen when they die.

“This is important, and not just from a business-development perspective,” he says. “Clients don’t hear enough simple ideas about how to make their lives better.”

When your clients understand that after death, their assets, including all bank accounts, are frozen until their estate is through probate, they’re willing to consider giving relatives access to some capital to cover immediate expenses such as the funeral, says Jason Abbott, a certified financial planner and owner of WealthDesigns.ca Inc. in Toronto.

“The key issue is liquidity,” he says. “There’s always an issue about getting the money now. Any insurance advisor can look a client in the eye and honestly say that.”

The Life Insurance Act ensures that your clients’ policies stay outside of the probate process. Their beneficiaries get access to cash to pay for the funeral, legal and accounting fees and other incremental but immediate costs, says Abbott. Family members might also want to pay off credit card bills and lines of credit immediately.

For a middle-aged client who expects to live to an average age, Abbott estimates these sorts of costs could reach about $50,000 in 20 years, when inflation is taken into account. He says clients don’t want to pay life insurance premiums into their retirement, so small, guaranteed permanent life policies can be paid up by the time they reach 60. Says Abbott: “I encourage [clients] to pay it off quickly.”

For many clients, buying a home had motivated their first purchase of life insurance — a term policy that covers the debt obligation to the mortgage issuer. But if the need hasn’t been addressed already, Abbott notes, a guaranteed permanent policy can include a term rider for a larger death benefit to pay off that debt, or any other debts incurred during the client’s life. When the mortgage is paid off, the rider can be removed.

In this way, a soft version of the will-funding approach can lead to more complex estate planning issues once the topic has been broached. With debts and immediate costs covered, the conversation can move to more detailed estate planning much more naturally.

“It comes down to how you frame the facts,” Abbott says. “I always ask [clients] what they want to happen when they die, rather than telling them what to do. Then, I can educate them about options.”

Advisors are aware that there are myriad estate-planning issues; and most know that permanent insurance policies offer a swift way to pay off estate taxes triggered by the disposition of any unregistered assets, such as tax-free savings accounts or property.

For example, one of the more common requests for clients who own cottages is for a permanent policy that equalizes bequests to children, says Brian Shumak, a CFP and insurance advisor in Toronto who started his career with London, Ont.-based London Life Insurance Co. ’s Freedom 55 division.

“Let’s say only one child is using [the cottage],” says Shumak. “Most clients want to treat kids equitably, so they buy a $100,000 life insurance policy for Child B, and then they might have an additional $50,000 plan to pay for the taxes on the cottage.”

In a slightly different example, if the children don’t want to own the cottage, a payout from a permanent insurance policy can pay immediate costs on the property— such as taxes, utilities and maintenance — while the estate moves through probate or in the event that the heirs don’t want to sell the real estate in a down market.

“What if you got this discussion about wills going?” asks Ruta. “What else could you do? This could be another way to get into your prospect list that you wouldn’t have been able to in any other way.” IE