The Sale

[James]

Having problems on how to describe my selling technique of an actual sale. So I decided to describe how I perform when selling to an average client interested in life insurance. I use Newsletters, ads and COI to develope prospects, say I'm walking into a situation of middle class Mr and Mrs America, we'll call them Chad and Belinda, they have two children, one is 7 and the other is 9. Now I don't know these people at all, they live in a moderate house of around here in E. TN a value of about 175 grand, I see two late model cars nothing special.

I walk up to the door and give it the old knock and they come to the door, kids screaming in the back ground about someone who stole someones gameboy or something and Moma yells back to go downstairs and do something. I make my introductory, "Hello, I'm James how are you doing today". I carry a small bag that contains a Review, some brochures and my trusty old Yellow Pad, no I don't use a Laptop and of course some rate cards and a few App's. I think any Life Ins. Agent caught without App's on person should be penalize $50 on the spot!

I usually suggest sitting at the kitchen table, just the "old school" part of me! First thing I do is suggest I'm there to perform a review of their insurance needs and check to see if they have proper amount of insurance in place now. In a way I hope they do have some insurance, too little or too much insurance, I find this better then those that don't have any insurance in place. Obviously those that have insurance in place see the value of insurance, those at this age with children that don't have any insurance is likely not to see the value of insurance which makes for a harder sale!

This is where I love to be, no matter what they say I have to figure a way on how I can do better for them. I have about thirty minutes to convince them that my plan is better then the plan of the last agent, LOL, yea the last agent! My golden parachute, most agents I assume got out of line when God was passing out common sense! Most people that have insurance in place, placed by an agent have not heard back from that agent, I rarely ever cross the paths of clients that have any relationship with their agent. So that is where I first go, when the last time you heard from your Life Insurance Agent? NEVER is almost 100% reply and that gives me my first in. So the idea is to review on how much they are paying, I call it Wedge #1 issue, they are paying too much, don't even have to think about it.

Okay, now let me place this on the table again, I'm a "Term then Convert" type of guy. I'lll quickly and can back up the idea of ten year term or even a 1 year policy with GR (guarantee renewable) over the idea of 20-30 year term policy and win about everytime in most issues of Suitability. I've even grown tired of the pathetic reasons for Long Term, Term Policies, it is basically a no brainer, it is called Term for a reason! Yet though, no one is gonna touch my prices.

This is the price Wedge Issue without having to sell cheap term policy. You sell the shorter term that requires a constant review of their insurance. In other words placing long term term products does little for your client or yourself as there agent, unless you don't expect to deal with clients for the next 20-30 years. There are other Wedge Issues, but I'm gonna have to take a break for now.

 

[Crabcake Johnny]

This is where my knowledge is lacking. The term is guaranteed convertible to perm without re-underwriting at the same DB? Can I increase the DB during the conversion? If not, you at least need to make sure the DB is the correct amount. I'd imagine that's some potential liability for an insurance company; take on a healthy client, age 40 with 10 year cheap term. 8 years later he's diagnosed with an illness and moves to convert to perm. If re-underwriting is involved to make the switch then it's gamble that they're still healthy when they want to make the switch.

And in practice do most of your clients end up converting? I agree that selling 30 year term leaves no reason for the client to convert to perm.

Do you subscribe to "at last some perm" - meaning maybe a $50,000 perm with the rest being a term rider? Would that even make sense for a client?

 

[James]

This is where my knowledge is lacking. The term is guaranteed convertible to perm without re-underwriting at the same DB? Can I increase the DB during the conversion? If not, you at least need to make sure the DB is the correct amount. I'd imagine that's some potential liability for an insurance company; take on a healthy client, age 40 with 10 year cheap term. 8 years later he's diagnosed with an illness and moves to convert to perm. If re-underwriting is involved to make the switch then it's gamble that they're still healthy when they want to make the switch.

And in practice do most of your clients end up converting? I agree that selling 30 year term leaves no reason for the client to convert to perm.

Do you subscribe to "at last some perm" - meaning maybe a $50,000 perm with the rest being a term rider? Would that even make sense for a client?

Renewable and Convertable are two different things. The One Year Contract and many 5 year plans still use the Renewable Clause, stating that you can Renew the contract base on age, no underwriting involved.

As far as the Conversion, I find this year I'm doing more Replacements or Add Ons as in Final Expense. In my first meet I attempt to add on a small WL or UL in the amount of around 25-50 grand as in that is the least amount of insurance needed for their entire life as in old age, now obviously many don't go for it on the first go around. Yet in the second year I'm finding as we look more closely in detail the need for a larger Perm. Policy is obvious. Or should I say it this way, on the second year review process I am finding that they are more open to do a complete financial review or that the Trust factor is far greater then that of the first year meeting.

Yet though I was talking more of the first meet, as in new client and new agent. In this I find about (give or take a few points) 5% of prospects that buy Term will bite for a small FE Policy may it be a UL or WL. I believe in most cases I can replace existing policy which generally speaking is a 20 or 30 year term loaded with ryders not needed and replace that with a 1,5 or 10 year policy even using Mass Mutual (most expensive?) contracts cheaper then they have now (esp if we are talking the likes of a Home Certain product from OMG) and once I throw in a small FE Policy the amount is insignificant.

Mass Mutual 5 year Term plan which is Convertable (something worth converting too IMHO) is about 600 dollars a year for a standard rating of a 40 year old.

Banner 20 year Plan which also convertable (but convertable to what????) is about 800, base on a Standard Rating most go up from there.

To me that means I have 5 years to have them in a complete package that will last them thru their death. Meaning a true amount of insurance has been found thru several years of meetings or a perfect balance of Term and WL/UL's are in place including DI and LTC being addressed. I would find it hard to come up with the strategy that would have me find a solution and have the clients sign off in one or two meetings over a months period. I just given myself and my clients 5 years to work out a more perfect solution.

 

[James]

Yes, Convertable usually means you can go up to 100% or less of the amount over too a WL plan with no underwriting but base on age. Yet though most middle income people can not afford a 500, 750 or 1 Mill WL policy. So yes we are talking partial conversions over time.

 

[James]

Wedge Issues, these are priceless! First wedge is Price Structure, or the 5-10 year term Vs the 20-30 year term. You can use more solid house hold names Vs companies no one has ever heard of, such as Banner, a fine company but not exactly a major player. Not like Mass Mutual or AIG, I really don't care if you want to sell Mutual or Corporate Insurance Companies, yet choosing those with known names is nothing but a plus in branding yourself.

The next Wedge Issue is the "Service", use the well known invisible agent to your favor. Be there, offer them a $50 bill if you don't stay in touch, I assure my clients that I'll be there, that if they don't get a call from me in 6 months to check in they can call me and ask for the $50 dollar penalty I owe for not staying in touch! It's a great incentive, I assure you most clients (even though many say they hate insurance agents) are disgusted with their insurance agent that never hear from! Well everytime they recieve a bill or have their premium withdrawn from their checking account.

Now for other Wedge issues, not all are as simple or straight forward. Some of the best can be found within the contracts you sell or don't sell. I suggest having two core products that can be use in a wide arrange of usages that you know front and back wards. Such as the UL (Secondary Guarantee), most of these guarantees are not worth the paper they are written on. Most state that you need a positive CV in to maintain it, now that is fine and dandy but if you view their policy and start performing illustrations using 4-6% at their rate of premium more then likely their CV is going to be negative in 20-30 years! Meaning their guarantee isn't worth much now is it? Yet, some companies or many have what you call target premium, most do not sell the target premium because it tends to be higher then the minimum premium, once you explain that you can usually take the UL and flush it and just rewrite a new Application! Several times I came accross this very scenario, after the review we found they did not need that much Perm. Insurance and I quickly found myself writing a fairly large Term and WL Applications on two people or 4 Contracts!

My Core Term Products, the AIG One and Mass Mutual 5 year term. Then you have the MM WL offerings, simply the best of the best. Don't over look Mutual Trust, a wonderful company that I should add to my core product.

Also keep alert, at times I've blown more then one sale. Many times people tend to be interested in DI or CI, these are issues that come up usually under certain timing such as "The Moment" as I refer to it when you realize you are no longer immortal, most people hitting 40 will know what I mean.

 

[Crabcake Johnny]

One of the reasons I feel uncomfortable selling life it the "damned if you do damned if you don't" feeling I get. Everyone wants cheap term which is crap. I have 30 year term and I fully realize I'm throwing my money away. Maybe I'll be jogging one day and a piece of wing will fall off an airplane and my wife will get paid. Chances are though that Banner will pocket $120 a month from me for 30 years and laugh when it lapses. But I tried offering perm products to my existing client base about 2 years ago and simply ran into a brick wall.

So if term is afforable but junk and perm is fantastic yet no one can afford a correct DB then the life insurance industry has yet to create a product that isn't so heavily tilted towards the favor of the insurance company.

 

[James]

One of the reasons I feel uncomfortable selling life it the "damned if you do damned if you don't" feeling I get. Everyone wants cheap term which is crap. I have 30 year term and I fully realize I'm throwing my money away. Maybe I'll be jogging one day and a piece of wing will fall off an airplane and my wife will get paid. Chances are though that Banner will pocket $120 a month from me for 30 years and laugh when it lapses. But I tried offering perm products to my existing client base about 2 years ago and simply ran into a brick wall.

So if term is afforable but junk and perm is fantastic yet no one can afford a correct DB then the life insurance industry has yet to create a product that isn't so heavily tilted towards the favor of the insurance company.

I never said term suck, I said that the 30 year term is basically not needed and most will end up with more or less DB then needed in any given year. Why I proudly serve up short term, adjust it as you need it and pay the least amount starting with year one! This basically means sitting down with people (the same people) every 6-12 months, yet guess what? Referrals really become an issue, I don't ask for referrals per say but when I send out my Newsletter I suggest they can give me names and addresses (no phone number needed but I won't reject them) so I can send a newsletter and a letter of introduction to them. If the referral is interested they can give me a call!

Yes Life Insurance is like Health Insurance, you buy it hoping you don't need to use it! Yet the agent, well the Old School idea of Health if I remember correctly is sell when they are healthy and hope they become sick or whatever so they are stuck on the plan that you sold them! At least I had several long term Health Agent use that saying.

I would suggest you checking out shorter term policies, esp with Renewal Clause, that way you cut your cost and then adjust it as time goes on. Lets face it, as one gets older the need for DB tends to decline. The main trick is coming up with a certain amount needed for life, that amount no matter how small or big should IMHO be placed in a WL or UL as soon as possible and the rest of the temporary need of a DB should be place in short term as this amount will fall as you progress in Savings and as Life progresses and issues are no longer issues such as debt, college savings for children, income replacement being replace by actual savings etc etc...

 

[Crabcake Johnny]

Well, I most certainly don't hope any of my clients gets sick and if they do they'll be happy I recommended a HSA.

I'm gonna try your method of recommend 5 year term just to lock them in at the price and take it from there. I know I must be doing something drastically wrong since I can't seem to cross sell to my existing clients too well.

Something's wrong when I close a $550 monthly health premium, the husband has no life but wants to think about $60 a month for term. Yeah...he'll get back to me and never does.

 

[James]

Well, I most certainly don't hope any of my clients gets sick and if they do they'll be happy I recommended a HSA.

I'm gonna try your method of recommend 5 year term just to lock them in at the price and take it from there. I know I must be doing something drastically wrong since I can't seem to cross sell to my existing clients too well.

Something's wrong when I close a $550 monthly health premium, the husband has no life but wants to think about $60 a month for term. Yeah...he'll get back to me and never does.

I think the hardest Life Sale is to the person that doesn't have it to begin with! Much like Health Insurance, I would recommend starting with people that have Life insurance in place already if you have a good way of asking that is. Such as, "Have you recently price Term Policies? The price is falling and if your Life Insurance is over a few years old I may be able to cut your cost!". Then its just a matter of explaining Short Term with Renewable and Convertable to the Long Term Price of the 20-30 year term. I would imagine if one take to heart the BTID that would be a no brainer, lets face it every dollar place in any savings or investment in the early years are the most important! Plus you already acknowledge you have to stay in touch with them yearly, another opening, most life agents suck at "Service" end of the business!

 

[insuremojo]

Well, I most certainly don't hope any of my clients gets sick and if they do they'll be happy I recommended a HSA.

I'm gonna try your method of recommend 5 year term just to lock them in at the price and take it from there. I know I must be doing something drastically wrong since I can't seem to cross sell to my existing clients too well.

Something's wrong when I close a $550 monthly health premium, the husband has no life but wants to think about $60 a month for term. Yeah...he'll get back to me and never does.

You are definately doing something wrong. With as much health that your're selling you should be getting an ok to quote 1 out of 4-5 health clients, and since you're already their health agent you should be closing most of those deals. I don't know....maybe it has something to do with your general attitude towards life insurance? If you believe that you're throwing your money away for protection then that's gonna show through to the client and their gonna hesitate over a $60 month premium (cheap).