Prospecting/ My 20 Point Day System

[sman]

" Ah, a permanent guy. I hope you're not one of those that believes EVERYONE should have permanent coverage. "

How can you do a 412i, Def Comp, Split Dollar, Rev. Split Dollar, Executive Bonus, plan without WL/UL?

WL is not the all end all and everyone does not need it. However term is not useful for some cases.

Anyone who sells only WL or only term is crazy. Sometimes the need is for WL. Like estate planning you need WL, you need to make sure it stays in force for life. Anyone who does not see how good WL is for some cases needs to go and study the product and the laws and regs.

It is not as much product as much as it is process. The main goal of LI is to do a job. What fits the job best and why it fits the best what you need to know. When you know what fits the best that is what you sell.

Couldn't agree more. If your market is the 412i, estate planning, etc., then you obviously won't write much as much term.

 

[NHB_MMA]

You're right, MOST wouldn't call it the ultimate retirement tool, but I know some who will recommend a WL, EIUL or VUL over investing in a 401k or Roth IRA. That's just scary. The "significant" portion of funds should only come after one has maxed out all other deferred options.

For retirement purposes, WL is okay for the Average Joe if he has a conservative mindset and low market risk tolerance, but he'd still be a fool to sink all his money into WL for retirement planning purposes, IMHO, and if that is his chosen route he'll have to dump a boatload of money in each month. It's not what I would recommend, unless someone is deadset against anything for some reason.

As for the 401K or Roth, it's a different kind of situation. Presumably, your employer will match the 401K up to a certain point. Everyone should contribute up to that amount, if at all possibly, but I wouldn't put anything more into it. If I'm not getting "bonus money" hell if I don't want my hands directly controlling it. I don't understand guys like a former coworker that had a match up to 3%, but he put in 10% of his pay. It's awesome that at least he was doing more responsible retirement planning than most people, but it's not what I would recommend. The Roth appears to have some great advantages and seems to be one of the best retirement planning tools to come about in recent times. Keep in mind, I am only now studying for my 6 & 63 and will fully admit I don't know everything, so it's my layman's opinion.

One drawback, it would seem, to a Roth is that one HAS to start taking distributions at age 70 1/2. Compare that to a permanent policy and you can leave the money in a permanent policy to continue to snowball, and snowball it does indeed when you get past that age. I am thinking particularly of a VUL when I speak of this. Remember, insurance companies are predicting that folks will live longer and longer over the next few decades, with advances in medicine. I don't know if I buy it, but that's what the experts are saying. I don't know anything about EIUL products, but VUL is an awesome product if it's started at an early age when the term component is so small. When you consider VUL has some of the intangibles life insurance offers (shielded from creditors, cash value recognized by banks for borrowing purposes, tax-free death benefit in the event of death, etc.) it seems like a great tool to be a significant piece of the planning pie, though not the entire pie. Once you get past the matching dollars issue of the 401K, is the Roth IRA or a VUL better? The obvious answer is BOTH, if you can afford it, but both have pros and cons. What I personally like about VUL is you can start them at an early age for a very modest premium anyone could afford and you can have a considerable asset if you want to cash it in at age 70, 80, or older, but if you don't feel you must do so, wish to keep it for the life insurance benefit, and may live till age 90 or 100 the death benefit gets to be enormous. If you're speaking in terms of the death benefit and that is a major consideration of your life insurance, you'll beat the hell out of the Roth, because the Roth will get taxed. In the case of high-end clients, they'll exceed the income restrictions on the Roth, for whatever that is worth as we don't all work with nothing but those clients (oh wouldn't it be nice).

As for my original comment about certain individuals putting a significant portion of their would-be investment money into life insurance vehicles, I was thinking mostly about those that are likely to be sued and may need the creditor protection. I think I mentioned it in another post, but a NYL agent I know has been working on a married pair of physicians putting $4,000 per month into a WL policy, due largely to that aspect and their CPA thought it was a sound idea. I believe they were in their mid to later 30's and I personally would see how a VUL might compare, since they may be young enough given their willing to put so much premium in it.

 

[sman]

As for the 401K or Roth, it's a different kind of situation. Presumably, your employer will match the 401K up to a certain point. Everyone should contribute up to that amount, if at all possibly, but I wouldn't put anything more into it. If I'm not getting "bonus money" hell if I don't want my hands directly controlling it. I don't understand guys like a former coworker that had a match up to 3%, but he put in 10% of his pay. It's awesome that at least he was doing more responsible retirement planning than most people, but it's not what I would recommend.

Assuming a 3% contribution allows a person to reach their retirment goals, that's just fine. But for many, it will take much more than 3% with an employer match to reach their goals. I generally recommend people to contribute up to the match, then a Roth (if eligible) and if they still have money to invest, max out the 401k. If there is still money to invest, we can then look at some of the alternatives.

One drawback, it would seem, to a Roth is that one HAS to start taking distributions at age 70 1/2.

Sorry, but you need to do more studying. And not from the 6 & 63 manual. There is NO REQUIRED DISTRIBUTION from a Roth. There is from a Traditional IRA, 401k, 403b, etc., but not a Roth.

Compare that to a permanent policy and you can leave the money in a permanent policy to continue to snowball, and snowball it does indeed when you get past that age. I am thinking particularly of a VUL when I speak of this.

Please don't get caught in that trap of advising people to put their money in a VUL instead of 401k's and Roth IRA's. There are times where it may be warranted. For example, someone makes too much money to contribute to a Roth. But I've seen too many reps use a VUL as THE retirement solution.

Once you get past the matching dollars issue of the 401K, is the Roth IRA or a VUL better? The obvious answer is BOTH, if you can afford it, but both have pros and cons.

The answer is not both. The answer is first the Roth (if one qualifies) then the VUL if they have the additional monies to over fund it.

because the Roth will get taxed.

Oh really. In what world does that happen. You really need to study up before you go giving advice.

 

[Atlas]

" Couldn't agree more. If your market is the 412i, estate planning, etc., then you obviously won't write much as much term. "

Agreed, however do mostly but-sells and cross-sells. They start with term and convert over time that way the funds are guaranteed to be there at a later time when they are needed.

 

[midwestbroker]

Some great posts here, but if you are not passionate about your product you will never be a success at selling it.

I can talk about Medicare, issues relating to Medicare, why supps are good and bad, why MA plans are good and bad, etc.

I think that is the key. They look at me as a resource, not a salesman. They know that I know what I am talking about, they usually laugh a few times in the presentation, and they appreciate that I am not shoving a policy down their throat.

That is why I am successful. That and the hard work at doing something I love to do. If you do not do that, you better find a spouse who is rich.

 

[James]

Imagine Maria Carey writing a book on how to sing. You could read it cover to cover and you'll never have a 7 octave range.

I'm a strong believer that sales is teachable, done it in other fields and I see no difference in the Insurance Industry. If anything has failed it has been the sales training push upon people such as so many No's equal a Yes! It rarely works for the most part and those that excel in sales understand this at some point in their career.

The 5 Way, is nothing more then a opening line to be used as a prospecting tool not a sales system, most understand this. I have no doubt that most people never used this and most business owners have never heard this line so the claim of it being "Old School" is quite puzzling, old school as in no one knows of it! I've studied and used the 5 Way going on about a year now, I've not found a better opening line to create a dialogue when prospecting businesses on the life side. Yet if one is so weak that they think that the use of the word "Bankruptcy" is going to create ill feelings is being overally cautious. As in most business owners have failed in the past so they tend to be keen on protecting from future failure. As in business is business, most understand being emotional about their business is not a favorable postion for future success.

 

[Crabcake Johnny]

I disagree. You cannot teach personality. There are also people who simply relate to others better - also not teachable.

 

[James]

I disagree. You cannot teach personality. There are also people who simply relate to others better - also not teachable.

Well everyone has a personality, while I agree some personalities will thrive better then others.

but if you are not passionate about your product you will never be a success at selling it.

How many times do people go to work and does a bang up job yet they don't feel passionate about it? I can set up a camera and lights and take a saleable if not a great family portrait and I can do this with no great passion or as some suggest getting myself up for the ordeal. I would rather save my passion for things that are passionate such as my wife!

This is exactly what I'm referring to, the misuse of the issues that make it possible for a successful sales career! The notion of having to be passionate or on an emotional high (as in getting oneself up for the day) is a major factor of the burnout of the salesperson. I've known people that have done sales, did good but felt as though the emotional rollercoaster wasn't worth it in the end and decided to pursue other types of employment even though they had achieved a workable income.

The first thing I suggest anyone that seeks to improve their sales career is to eliminate the "Emotional" factor. I always fall back on my knowledge of building a House, you have to view it in "Stages". First comes the act of prospecting to the end desire of a signed contract. If I failed depending upon how much time I have invested is to be viewed not as a success or failure but an act of staging the sale. Most of the time when I don't get a signed contract it relates back to bad prospecting. Plus I don't view myself as an educator but an active listener that simply lays out a solution. If they reject my solution then itÂ's their problem, if I suggest a MA or Supplement I would feel strange offering B after they rejected my A plan. I sold 18 policies out of 12 appointments last week by my method, 11 MA's, 6 Supplements and 1 Final Expense, never did I attempt to educate the client!

Yet though I really didn't enjoy myself. I really see the senior market as a burnout, personally that is! I mean 4 appointments a day for three days that took a solid day of telemarketing to stage properly. Just isn't worth it! Yet some thrive off of it, more power to you! I'll do it up to Christmas I suppose the money is just too easy to pass up for now.

 

[NHB_MMA]

Assuming a 3% contribution allows a person to reach their retirment goals, that's just fine. But for many, it will take much more than 3% with an employer match to reach their goals. I generally recommend people to contribute up to the match, then a Roth (if eligible) and if they still have money to invest, max out the 401k. If there is still money to invest, we can then look at some of the alternatives.

It obviously varies by situation, such as the example with the physicians or anyone else that might be likely to get a judgment against them, but I think your advice is pretty sound. I differ at max out the 401K. I see no reason to put that money that I could put in any vehicle I want at my disposal in something not completely in my control.

Sorry, but you need to do more studying.

I admitted I basically work with a layman's opinion at this point.

And not from the 6 & 63 manual.

I didn't get my Roth comments from the manual. I haven't read about the Roth in the manual yet. I would think that whatever I read in the Kaplan manuals should be reliable info.

There is NO REQUIRED DISTRIBUTION from a Roth. There is from a Traditional IRA, 401k, 403b, etc., but not a Roth.

Did not know that. Another plus for the Roth.

Please don't get caught in that trap of advising people to put their money in a VUL instead of 401k's and Roth IRA's. There are times where it may be warranted. For example, someone makes too much money to contribute to a Roth. But I've seen too many reps use a VUL as THE retirement solution.

I know you seemed biased against it from the other thread sometime back, but I think it's a pretty good product. Should all money go into a VUL? No, I can't imagine ever recommending that. I think there are many people that a Roth is ideal for that a VUL would be a poor selection for. I have absolutely nothing against the Roth and think it seems like a great product. I have three people that have expressed some interest in getting a Roth set up once I'm sixed and sixty-threed. But I'll also suggest a VUL policy for their young children.

With a VUL started at a young age, you can put about $30 per month in a plan that should reach $1M by retirement age and $3M-$4M by policy maturity, again with some of the added benefits of life insurance. My own father purchased a UL plan on me when I was around 15 or so, for about $30 per month. It's performance has been okay, but it would be worth a hell of a lot more if it had been in a number of funds over that time period. Some parents see the value in buying a permanent policy on their children, as a permanent asset and protection in the awful event of a premature young death. Why not something that can actually have substantial growth? Most everyone needs life insurance as they get older and have family responsibilities. Why not start a plan at age 10 that will cost not much more than term insurance will only years down the road, with the level premium? Get 75K or 100K in VUL as a kid, and add 500K or 750K in term at age 30 and your life insurance needs are set, and you'll have $1M when you retire.

The problem with the Roth at such an early age, from what I've seen, is that no one wants to set one up with less contribution than $100 per month. A family with three kids can't afford that. I'm sure you're going to show me somebody that will set one up for a smaller monthly contribution, but most require a higher minimum than many families will be willing to pay.

Oh really. In what world does that happen. You really need to study up before you go giving advice.

The comment was made by an estate planning attorney. Perhaps he spoke in error or I misunderstood his example during a comparison.

I am currently studying. I am not, at this time, giving advice. I enjoy such debate/discussion, but there is no need for a condescending tone.

If there is one thing I have to bitch about regarding this board, it's that guys that make it in this industry invariably get started with a captive operation like myself, leave for whatever reason and go independent like many do, advise any new agent to get with a major player cause you have a snowball's chance in hell as an indy coming out of the gates, then those same guys ridicule every idea you talk about. It's amusing, but discouraging. Guys that have written more WL than I'll probably ever write (statistically) in so many words call you a crook for even suggesting WL. It's laughable. And I'm not even saying they're wrong, but to say their mocking tone is counterproductive to having a good board with a lot of ideas is an understatement. The only reason I don't let it get to me too much is that even if a person isn't an expert (I freely admit I'm still learning) he can recognize a blow-hard after a while. Anyone can, in time, spot someone that may be somewhat knowledgable, but thinks he has tens times more knowledge than he actually does. The insurance industry has come out with a number of products over the years, with various pros and cons, that are more or less suitable for various situations, but if some of these guys were the Insurance Commissioner tomorrow the only products even approved for sale would be term life and high deductible major medical.

Sman, I got on a rant that went way outside of our discussion. I think when I typed the word "condescending" it brought old thoughts into my mind of some nasty threads, even ones I didn't post on. Please don't think the last few comments were directed at you personally, but I just got in a mood that reminded me of many threads here and at the old board over the past few months. It's just a frustration with the board in general, at times. I have no beef with you, regardless if your opinion of VUL differs somewhat from mine, and respect much of the advice you've posted here.

 

[Guest]

The problem with the Roth at such an early age, from what I've seen, is that no one wants to set one up with less contribution than $100 per month.

If anyone is interested:

1. AARP will open a Roth for exactly $100. No further contributions required. www.aarpfunds.com

2. State Farm will open one for $250. No further contributions required.

3. T Rowe Price will open one for $50 per month until it hits $2,500 (the minimum required to open one).