403b Market & Life Insurance

[baggins415]

I'm putting a question out here to all of you working the 403b market. I would like to know the general mix of annuities vs life insurance sales you perform in this market? I'm always shocked to learn I'm the only guy I know that produces huge life insurance numbers in this market. I have developed a methods to do this but figured I wasn't alone in doing this. Now I'm starting to wonder. So let's hear those ratios fellas! And is it mainly term or perm?

As many of you know I've worked the 403b market hard for years. But what I've found is that most agents have NO CLUE how to sell life insurance in this market. It just blows my mind. (Maybe some of you are different in this forum?) I'll admit, here in California though, the 403b flow sales alone you can make a very good living off of. In California where I'm at I'd say my average client is doing 500-600 monthly into their annuities. Many of the teachers are married to business owners or silicon valley types so many like to max out their 403b's - this is of course the easiest annuity sale ever that just keeps giving every year.

But again, I've noticed that virtually NO agents are selling life insurance (aside from the normal family need for a term or perm policy here and there).

The fact is this market is phenomenal for life sales! Even for single or divorced teachers it's super easy. I've never made easier life sales than I have in this market - and the premiums average 3,000-5,000 per policy. It has to do with understanding exactly their pensions work. You can certainly sell IUL's / UL's as an annuity alternative too. This is easy if you know what you are doing. It also helps to have a good software illustration system. One of the companies I deal with provides this and it makes life extremely easy and puts it in a visual for the client to see.

Many times I have a client already doing let's say $800.00 per month into an annuity...and when I'm done with them I've gotten them to reduce their annuity to $450 and give me a check for $350 for a life policy. Again if you know what you're doing it will make complete sense to the client. Do the math on those commissions!

The best part about this market (as shown in my example above) is that you often don't have to ask for anything!! Many either will just throw money at you because they are desperate to save - or, they are already saving - so you just have to show them a better use for those saving they are already putting away. You don't have to effect their net take home pay at all. Just redirect the funds and reap the big rewards. Nothing could be easier!

If I sit down with any agent in this market for 2 hours I would literally explode his/her commissions by incorporating life sales into their 403b business.. There are so many clear opportunities to sell TONS of life insurance in this niche but it blows me away how few agents do it. I'm not sure if it's laziness, or just ignorance?

--If you need help in this I am available for consult.

 

[russelltw]

Baggins,

Those sound like great sales, but in NC, those situations are rarely there. Our teachers are struggling to make their home and auto payments. If I told some of my clients who are teachers to invest $800 a month in this, they would laugh at me.

Not trying to be negative, but just realistic for my area. Getting clients to buy a $30 a month term policy is a struggle for them financially. Congrats on finding the niche. It does sound like it's working for you.

 

[j20a00g]

i'd have to agree with russell. i believe the avg salary in FL is right about $40k.

how are you getting the typical teachers to invest $800/mo? Certainly not all teachers are married to successful business owners or wealthy people.

naturally, in your state, salaries are higher though the cost of living is as well so it may be comparable.

is this quantity over quality to be successful?

 

[baggins415]

Baggins,

Those sound like great sales, but in NC, those situations are rarely there. Our teachers are struggling to make their home and auto payments. If I told some of my clients who are teachers to invest $800 a month in this, they would laugh at me.

Not trying to be negative, but just realistic for my area. Getting clients to buy a $30 a month term policy is a struggle for them financially. Congrats on finding the niche. It does sound like it's working for you.

Wow, are you serious? Getting 30$ a month for a term policy is hard? Are you really working in the 403b market? Even my newbie teachers all start at least 100$ - 200$ per month 403b or life plans (I give them options).
I'm sorry to hear things are so dismal in your state. Starting salary out here depends on the district (maybe 50k) but I have many teachers making 70k and higher. Principals out here make 120k.
I find teachers to be very good savers. They don't have vices, don't smoke, don't drink (much), and live conservative lifestyles never beyond their means. This really helps make them attractive targets for 'savings' type programs. They are also deathly afraid of not having enough money after they retire so getting them to put more money 'away' is always pretty easy.

 

[Norwayguy]

Wow, are you serious? Getting 30$ a month for a term policy is hard? Are you really working in the 403b market? Even my newbie teachers all start at least 100$ - 200$ per month 403b or life plans (I give them options).
I'm sorry to hear things are so dismal in your state. Starting salary out here depends on the district (maybe 50k) but I have many teachers making 70k and higher. Principals out here make 120k.
I find teachers to be very good savers. They don't have vices, don't smoke, don't drink (much), and live conservative lifestyles never beyond their means. This really helps make them attractive targets for 'savings' type programs. They are also deathly afraid of not having enough money after they retire so getting them to put more money 'away' is always pretty easy.

Yeah California is a totally different market...Your starting pay is pretty much the top end pay of teachers in Maine...But on having seen recently a list of the top 10 people in california getting pensions and these topped 500K per year I'm in the wrong spot.

You are right by and large teachers are primarily conservative with their money non-smokers and non-drinkers...But I know I got a shock on day when a life policy I wrote on a teacher client got declined...Drug Abuse..he had been using pot daily for 30 years, never mentioned it to me thought I know I always ask about drugs but did disclose it to the paramed.

 

[baggins415]

i'd have to agree with russell. i believe the avg salary in FL is right about $40k.

how are you getting the typical teachers to invest $800/mo? Certainly not all teachers are married to successful business owners or wealthy people.

naturally, in your state, salaries are higher though the cost of living is as well so it may be comparable.

is this quantity over quality to be successful?

I didn't say everyone puts $800 a month in. My average teacher is doing in the $500 dollar range though. That's averaging the newbies doing $150 a month and the salty 25 year vet who didn't save in the early years and now her kids are out of school and she's doing near the max - (lot's doing $15,000 or more in this group).
I find it hard to believe that you guys are talking only about the 40k teachers. I bet if you were really entrenched in this market you'd find teachers making MUCH more - they are out there. You can't judge the whole market on 'starting salaries' alone! Every teacher like every client you'll have has different circumstances. Many got into teaching because they don't 'need' to make a lot of money. You'd be surprised how many teachers are in this boat.
I love the newbies though because even though they are financially challenged and on the low end of the pay scale - they will grow every year in salary. Also it's a perfect time to get them in an IUL instead of the 403b. So what if they only have $100 a month to invest? On a 403b you'd make nothing but on a life policy - well, you know....the sales becomes not only super easy but more profitable and in my opinion much better for the client than just dumping a measly 100$ month into a 403b.
I do a cotton swab, a life app and i'm out the door with the IUL issued a week later.
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...But I know I got a shock on day when a life policy I wrote on a teacher client got declined...Drug Abuse..he had been using pot daily for 30 years, never mentioned it to me thought I know I always ask about drugs but did disclose it to the paramed.

well sh*t happens right Peter? Still, I find teachers to be my 'cleanest' market for life insurance sales. Rarely any issues at all....
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i'd have to agree with russell. i believe the avg salary in FL is right about $40k.

I'm sorry guys , but I just did some quick research and found (using a few sources) that the average salary of teachers in FL to be not 40k as you said, but 47-50K. That's a really big discrepancy isn't it? You don't need them to put 9k away a year to be successful. But could you get a teacher to put away $300 or $400 a month into a program who's making 47,000? YES , EASILY.
(Of course if she has 5 kids and her husband runs around in a wife beater all day chain smoking, drinking and gambling with NO job, then we might have a problem.) But I find that teachers also (for the most part) marry responsibly. -Yet another nice bonus to this market.
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Baggins,

Those sound like great sales, but in NC, those situations are rarely there. Our teachers are struggling to make their home and auto payments. If I told some of my clients who are teachers to invest $800 a month in this, they would laugh at me.
.

Russell, also-- i'm sorry but this just sounds like you are making excuses for not making better sales. Look, we all know this economy sucks, that people on all levels of society, bought too much house, too many cars, too out too many lines of credit, and many are now struggling more than ever before. Welcome to the USA! Time to man up and get creative! It's just harder now (in almost every market), not impossible.
What I think you need to focus on is the positives: And in the teachers market there are MANY: 1- being tenured and job security. 2- They have pensions! Who has these cushy pensions anymore but government employees? 3- the nature of prospect's profile: conservative, savers, clean living, responsible. 4.-once you are in one school and make a good impression with ONE teacher it can lead to 20 more clients in that one spot alone! We're not talking AFLAC here. This is something MUCH better but the same concept. Look at each school like a medium sized business. The potential is incredible if done correctly.
I'm not saying it's not worse in FL than here in Cali, but I assure you if you were dedicated to the 403b market and had a bigger sample of teachers as clients you wouldn't be complaining. I assure you that.

The sales are there- and lots of them. By writing mixing in a good amount of IUL into your sales (instead of only writing 403b) you would lessen the impact of a 'bad' economy.

 

[russelltw]

Baggins,
I appreciate your response. These are the stats for my area. One of the poorest counties in my state. I have my teacher clients call me to switch their auto payments to monthly, so they won't have a big payment twice a year. I have 4 close friends I go to church with that are teachers. Very limited income with 20 year experience. Average in NC with bachelors degree and 30 years experience is $49k/year. I could go on and on. One other item, Horace Mann agents have been in the school system for years. One of their assistance left to work on our office for more money. If you can't pay your licenesed help much, it tells me you are not making much. That was confirmed thru a friend. He's been in insurance longer than I am, but still makes less than I do.

I don't do much with 403b admittedly, but from friends and other agents, I know I can make more income in other areas. Like I said originally, just trying to be realistic. Congrats on finding a great niche!

I may need to move to California and set up shop!

 

[j20a00g]

i wonder how accurate the numbers you posted for FL is. I'm thinking they include benefits (health). not questioning you as i'm sure that you got them from somewhere else.

in my area (the 4th largest district in the state last i looked) a teacher must have 17 YEARS AND A Ph.D to earn $50k. quite sad.
http://www.pasco.k12.fl.us/library/hr/salary_schedules/instructional_salary.pdf

i understand what you are saying though in regards to not making a lot off of the 403b and more on the life insurance though. I manage some 401k's and often make more on the 'add-ons' than I do the actually plan.

 

[baggins415]

Baggins,
I appreciate your response. These are the stats for my area. One of the poorest counties in my state. I have my teacher clients call me to switch their auto payments to monthly, so they won't have a big payment twice a year. I have 4 close friends I go to church with that are teachers. Very limited income with 20 year experience. Average in NC with bachelors degree and 30 years experience is $49k/year. I could go on and on.

Well that's very unfortunate for them and for you. I suppose you can't get blood from a stone right? It's sad that there are parts of this country that are so poor and depressed. I guess the only thing you can do is move. There are many areas in the country though where teachers do quite well.... (maybe TOO well to be honest.)
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i wonder how accurate the numbers you posted for FL is. I'm thinking they include benefits (health). not questioning you as i'm sure that you got them from somewhere else.

in my area (the 4th largest district in the state last i looked) a teacher must have 17 YEARS AND A Ph.D to earn $50k. quite sad.

If this is true why would anyone ever get a Phd?
Look guys, I'm not saying this market rules the roost everywhere. I'm speaking mainly of California (I know it's good here). You have to know your own area and demographics to market effectively. With these numbers you report from Florida...not only would I not market there....I wouldn't live and work there.
Also it's nice that these numbers are public information - so you can look at your local and determine if its' 'worth' it or not to you. Also, everything is relative. I live in the Bay Area...and the cost of living in MUCH higher than your area i'm sure. Still, I have teachers doing good amounts into 403b's and life insurance. Everything is relative. I may need $300-$500 dollar sales to make it worth it for me. But you may only need to get $100-$200 a month to make it worth it. If you have a client making 40k-45k a year and can't get them to see the need and save $150 a month (pre or post tax) for themselves, maybe you are in the wrong business. EVERYONE WANTS TO SAVE. Especially teachers for some reason.

 

[0b1kanobee]

I work the 403b market in Florida. There are teachers who recognize that when they get older if they don't contribute to their 403b, they will be eating cat food. I have a couple of 18 y.o. girls contributing something to a 403b. I always tell them something is better than nothing and the whole time vs. money deal. Some teachers say they are broke yet they have iPhones, they are fat heffers and they just waste money. If a teacher looks at their budget and trims a little fat, there is always some money to contribute.

With regards to life policies sold, the agents who actually sell them are the ones who ask. I can't tell you how many agents simply don't ask. The girl who trained me started asking all her new clients and existing. I don't know how many policies she sold but she won a vacation and a nice TAG Heuer watch for her efforts. She sells term with living benefits mostly if not 100% of the time.

One agent in our office retired someone a few months back with 2 annuities and one life policy. His comp was close to $150,000. He's also a millionaire already so 150k isn't really a big deal. He's a rainmaker. They teach whoever wants to learn 1x a month. All the 403b agents get together and usually one or two share recent cases, what they did and discuss new as well as old ideas. Afterwards everyone eats pizza and drinks beer. One of them is the 2nd best 403b agent in the country for ING. That guy works harder and plays harder than anyone I know. Real nice guy too.

Biggest part of selling life insurance to anyone is simply asking if they have it. I'm sure you could get more technical but in its simplest form, the ones selling it are asking for the sale or about there life insurance or lack thereof.

Oh Baggins, I just read where you wouldn't work the Florida market because of the difficulty. I think these guys I know would tell you fine, they will take care of it. I personally don't care for the 403b market myself. I don't like all the politics involved with it and special treatment some reps and companies get. I guess I wouldn't care if I was doing 5 million a year in annuity premium like some of these guys in the office.