Principal does it.
Business Valuation. Nice idea. Any tools available ? From Met or Principal ?
Best Door-Opener Product For Small Biz Canvassing?
- Thread starter AllenChicago
- Start date
- 614
Principal does it.
Business Valuation. Nice idea. Any tools available ? From Met or Principal ?
Once you get contracted, you'll be able to access everything. From what I know of the Principal program, their support staff will walk you thru the entire process and assist with client meetings by phone if needed. Here's more info on the program.
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- 10,329
I will chime in here with my 2 cents since the small business market is my target market.
Business Valuation is useless unless you combine it with something that is going to solve a problem for them. Because the honest truth is that most business owners did not wake up that morning and think "hey I need to get my business valuated". Most see no need for it unless if a shareholder is entering or exiting the picture or if they are getting a loan or something.
What Business Valuation easily combines with for the insurance agent is Buy/Sell Funding. Call and ask "when was the last time you reviewed the insurance policies funding your buy/sell agreement?". "Do they reflect the business growth you have had since first taking them out?". That is when you can pivot into the valuation talk and pitch that as part of the buy/sell review.
It is an easy conversation to get going over the phone when prospecting and it is a fairly simple concept to understand for all parties involved.
As far as products go, I personally have never had any traction marketing Critical Illness to business owners. Most have sufficient savings stashed away that they already have an extra $30k in the bank if they have a heart attack an need extra cash for it. The whole point of CI is to help people who do not have enough savings to help with the extra expenses of a major illness. To me, it is a mid income type product. And my efforts in marketing it to business owners in the past (mostly existing clients) pretty much backed up my opinion that CI is best for the mid income market.
Most times that I talk about CI to a successful business owner, they usually say something like "between disability insurance and savings I dont really see the value in that type of policy". And honestly they are correct for the most part. If they have DI, BOE, and decent savings; then the need for CI is not huge if it even exists at all.
But speaking of BOE, that can be a great door opener. Lots of business owners have personal DI. Not a lot have BOE.
So in my opinion, the best door openers (especially for someone fairly new to the small business market) are BOE, Buy/Sell reviews and funding, and to a lesser extent key man insurance. Reviewing their DI is another good door opener. If their income has increased significantly since taking it out then there can be real opportunity there. And protecting their income is something that most business owners have a very high interest in.
Business Valuation is useless unless you combine it with something that is going to solve a problem for them. Because the honest truth is that most business owners did not wake up that morning and think "hey I need to get my business valuated". Most see no need for it unless if a shareholder is entering or exiting the picture or if they are getting a loan or something.
What Business Valuation easily combines with for the insurance agent is Buy/Sell Funding. Call and ask "when was the last time you reviewed the insurance policies funding your buy/sell agreement?". "Do they reflect the business growth you have had since first taking them out?". That is when you can pivot into the valuation talk and pitch that as part of the buy/sell review.
It is an easy conversation to get going over the phone when prospecting and it is a fairly simple concept to understand for all parties involved.
As far as products go, I personally have never had any traction marketing Critical Illness to business owners. Most have sufficient savings stashed away that they already have an extra $30k in the bank if they have a heart attack an need extra cash for it. The whole point of CI is to help people who do not have enough savings to help with the extra expenses of a major illness. To me, it is a mid income type product. And my efforts in marketing it to business owners in the past (mostly existing clients) pretty much backed up my opinion that CI is best for the mid income market.
Most times that I talk about CI to a successful business owner, they usually say something like "between disability insurance and savings I dont really see the value in that type of policy". And honestly they are correct for the most part. If they have DI, BOE, and decent savings; then the need for CI is not huge if it even exists at all.
But speaking of BOE, that can be a great door opener. Lots of business owners have personal DI. Not a lot have BOE.
So in my opinion, the best door openers (especially for someone fairly new to the small business market) are BOE, Buy/Sell reviews and funding, and to a lesser extent key man insurance. Reviewing their DI is another good door opener. If their income has increased significantly since taking it out then there can be real opportunity there. And protecting their income is something that most business owners have a very high interest in.
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Mr Jones, if your partner died last night, would you be in business with his wife today?
- 11,277
Voluntary Insurance, such as CI, is a want product... not necessarily a need product.
Why spend through their savings when they can transfer the risk?
When one has had a heart attack, stroke, or cancer diagnosis, one can survive it and thrive. However, personal stress can impede one's recovery. Could you imagine having a heart attack and surviving it... and having to take off a few WEEKS to recover AND dealing with bills? I know I'd feel better with a cash influx of $100k or so to deal with these things, so I can focus on getting better faster, rather than spending the money I've got.
For the business owner - and agreed, we're talking about a smaller business owner - having such a policy can be a great relief. Not only will they have a personal policy for personal expenses, but they can have a business policy to help pay the bills for a short time and just not worry about it for a while.
Like with ALL forms of voluntary insurance... it's an EMOTIONAL decision to buy, not necessarily logical.
The advantage of CI is that the small business market is massive. Business owners are under stress. You can explain the product in a simple way. You explain your benefit and ask for a short appointment. Either they buy or they don't.
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Another thought on selling DI/BOE to the business owner is to ask them: "Are you covered personally on your workman's comp program?" It's been my experience that most owners don't cover themselves. It could also be a good opening to offering either a Group DI or a voluntary payroll deduction program. I think Assurity Worksite might be a good option here for the employees.
- 10,329
We will have to agree to disagree about this one. More important than the need, as I mentioned in the post, when I tried marketing this to existing clients who are small business owners they did not have the emotional response to buy it. Perhaps someone else would have better luck though. Just my personal experience.
But I disagree about the need. That is what an emergency fund and DI is for. Considering that there are 1001 things that could cause that owner to miss work other than a critical illness, that $60-$100/m you are going to spend on a $100k CI policy would, imo, be much better spent on a Short Term DI policy.
The major financial pain of a critical illness is loss of income. So why insure for a small list of risks when you could use the same funds to insure for a much broader list of risks?
But like I said before, isnt that what an emergency fund is for? Once you are already self insured, why buy insurance? Why not just add to the self insured fund?
jmo
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I love an insurance agent who says don't buy this insurance...credibility abounds.
That being said, David makes a good point in transferring this risk.
All in, most small business owners (present company included) want to save money.
Taxes are the easiest angle here...pension plans, indy 401ks, cash balance, and other tax savings vehicles (like Penn's Restricted Property Trust) are going to be well received by a successful business owner.
- 11,277
No problem.
Here's the thing about DI - especially in California - benefits are coordinated with any state DI benefits. Generally not an issue for business owners, unless they are paying into the state program.
Also, there is ongoing qualification & evaluation with DI. If you have a $5,000/month benefit that usually has an elimination period of 30-90 days... that's 30-90 days of waiting before benefits kick in (of course, that's for a long-term DI policy). CI can be a great "stop gap" measure... for qualifying claims. To have a lump sum paid out from a CI, with no coordination of benefits, completely tax-free... can be a great relief to just have it. Now they, and their family and business, can focus on getting better.
Granted, DI will cover much more than a CI policy. But generally speaking, when a CI strikes, it's also a lifestyle wake-up call to change something, or the next one will kill you. Having funds can help ease the lifestyle or work/life balance transition.
As far as an emotional response, people react to us as agents. If WE aren't convinced that it's good, neither will others. That's just one reason why conventional agent training wisdom says that you need to "own what you sell" so you can get others to buy it too. Otherwise, you're just going to "go through the motions" and people can sense that... and they won't buy if you're trying to sell something that you don't believe in.
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Also, in considering that the OP has already sold a few hundred CI policies in the past, just never led off with it... would make it a much easier transition for them. Their belief in the product won't be in question and they can transfer their own enthusiasm for the product (and the need it solves) to those they meet with.
- 10,329
No problem.
Here's the thing about DI - especially in California - benefits are coordinated with any state DI benefits. Generally not an issue for business owners, unless they are paying into the state program.
Also, there is ongoing qualification & evaluation with DI. If you have a $5,000/month benefit that usually has an elimination period of 30-90 days... that's 30-90 days of waiting before benefits kick in (of course, that's for a long-term DI policy). CI can be a great "stop gap" measure... for qualifying claims. To have a lump sum paid out from a CI, with no coordination of benefits, completely tax-free... can be a great relief to just have it. Now they, and their family and business, can focus on getting better.
Granted, DI will cover much more than a CI policy. But generally speaking, when a CI strikes, it's also a lifestyle wake-up call to change something, or the next one will kill you. Having funds can help ease the lifestyle or work/life balance transition.
As far as an emotional response, people react to us as agents. If WE aren't convinced that it's good, neither will others. That's just one reason why conventional agent training wisdom says that you need to "own what you sell" so you can get others to buy it too. Otherwise, you're just going to "go through the motions" and people can sense that... and they won't buy if you're trying to sell something that you don't believe in.
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Also, in considering that the OP has already sold a few hundred CI policies in the past, just never led off with it... would make it a much easier transition for them. Their belief in the product won't be in question and they can transfer their own enthusiasm for the product (and the need it solves) to those they meet with.
As you mentioned, coordination of benefits is not a huge deal for most business owners. And is that a mandatory coordination of benefits in CA? Usually it is specific to the policy language. But I have never sold DI in CA. Is there no Social Insurance Benefit on CA policies? Does the whole thing coordinate?
With STD you can go down to a 5 day elimination period.
So again, imo, STD serves as a better "stop gap" than CI because it covers 1000s of other scenarios that CI does not. If you just do a 3 month benefit, (normal LTD would usually pick up then), then the premium will be right around what the CI would be. Broader amount of coverage, solves the same problem, and costs about the same.
And for my first year in the business I sold a bunch of CI. I still sell CI.
When I marketed CI to my business owner clients I honestly thought it would be a benefit to them. But their logic for not seeing the need was fairly sound. Out of around 30 existing clients I marketed it to, I only had 3 that actually were willing to meet f2f to talk about it.
Now when I marketed DI reviews and LTCI to my existing business owner clients I was able to sit down with over half of the ones I contacted.
Again, if anyone is marketing CI to business owners on a successful basis I would love to hear about it and learn their technique.
Back to my point, that is why they have an emergency fund. So again, if you are already self insured to begin with... why not just add to it? I understand the concept of transfer of risk. But we are not talking about a large risk here if they already have LTD. We are talking about 3 months of income.
Business owners want to save money on taxes, they want to create a safer retirement, they want to make sure that their business is safe and secure, they want to make things more efficient. In my experience, insuring 3 months of income that they already have covered in emergency savings is not a high priority.
I do understand your logic of selling something the OP is comfortable with already. But just because you have sold ice all your life does not mean you will be successful selling ice to an Eskimo.
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