Guidance for New Life Agents

Apr 3, 2011

  1. DHK


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    Insurance Forums Sponsored Advertorial
    I've made almost every mistake imaginable. In keeping with my own philosophy of not building "fortresses of knowledge", I'd rather share what I've learned and how I'd rather start over again, than not to share it. Considering that individual life insurance sales is at a 50-year low, there's plenty of opportunity for everybody, so there's no personal business risk to me for sharing.

    First: Here's what NOT to do:

    Be warned: Your manager won't like what you read here. Why won’t your manager want you to know this?

    1. They want to take full credit for your success. After all, if they help you be successful,would you leave the firm? Probably not. Then they also can’t promote you as an example of their leadership and coaching when they’re trying to recruit others.
    2. If you find out the REAL job is a lot of HARD WORK… you may discover that your manager was a liar in their recruiting presentation. He needs to protect his image.

    What NOT to do as a new agent:

    1. Spend money that you can’t afford to lose. This is a career and does require investment, but sweat equity with a solid plan for success is infinitely better than money recklessly spent.
      1. Beware of spending too much in direct mail or leads.
      2. Beware of spending too much on “miracle selling systems”.
    2. Talk to all your friends and family first about your products. Let them come to you or you can approach them after you’ve been making money for at least 6 months. More on this later.
    3. Wait until you know everything about the permanent products before trying to sell term products.
      1. We call that “letting the tail wag the dog”. Term is simple, easy and inexpensive. Use this to help you get a policy issued and a client in your system.
      2. Also, term insurance doesn’t require any joint work! See next point.
    4. Get involved in joint work that requires that you spend money that you can’t afford to lose.
      1. Some “mentors” require that you work on THEIR level, instead of working at YOUR level. Don’t fall for this! If your joint work partners all use LEAP (or other similar expensive selling system), they may require you to invest your money in LEAP as well to work with them. This will cause too much distraction and diffusion when you need a laser focus on building a simple clientele.
    5. Think that you can get everyone you talk to, to want to put all their spare money in Whole Life, Universal Life or Index Universal Life
      1. It also plants a seed of “greed” as your primary motivations. This will destroy your motives to be of true service to others. You know that term is an easier sale, get the proper amount of protection in place and will help you get the client. Run with that ball!
    6. Refuse to sell any term life insurance for any reason.
      1. Yes, some career shops will “frown” on term because they (and you) may not be compensated enough on that sale. That’s okay, because you’re in this for years and decades, not for a short stint, right?
    7. Follow everything your manager says for you to do.
      1. Your manager may only be looking out for his own best interests. You need to build your business for the LONG TERM, not for your short-sighted manager’s immediate needs.
    8. Quit your agency or sign additional product contracts until you have mastered the art of selling your agency’s products.
      1. Term insurance may have the perception of being a commodity, but YOU are not. Run with the commodity and sell yourself through your dedication, commitment and determination to provide superior service to all your policy holders.
    9. Never promote yourself to a cold-market as a financial planner or offering anything that can be considered “comprehensive”.
      1. You can get comprehensive in your fact-finding session, just don’t promote it. It just sounds like too much, too soon, to start a client relationship.
    10. Don’t sweat and slave over proposals to prospects. Prospects deserve exactly what they have already paid you: nothing. Don’t give away your best ideas to prospects. Keep your good ideas for those who have already taken a step to work with you. Applying for term insurance is one such step.
    11. Don't think that you're "too smart" for selling term or for taking a simple approach. Being too smart is the cause for many a failure in the life insurance business.
    This probably means that you’ll be prospecting BELOW your true capabilities. That’s good. You’ll have plenty of time to add to your capabilities as you continue to nurture and cultivate your growing client base.
    Last edited: Apr 3, 2011
    DHK, Apr 3, 2011
  2. Fisher

    Fisher Guru

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    #10 kicks butt! Good onya, DHK!
    Fisher, Apr 3, 2011
  3. DHK


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    What TO do:

    1. Focus on 2 fundamental skills:
      1. Prospecting activities
      2. Fact-Finding skills.
    2. Have a prospecting system and methodology that will allow you to get in front of as many people as possible.
      1. Two major ways to do this: Phone & In Person
      2. Two major markets: Residential & Business
        1. Find your ideal market and targeting strategy
        2. Obtain local business tax licenses & solicitors permits as necessary. Better to have them, than not have them.
    3. Resist the urge to want to offer “brain surgery” to someone who only needs vitamins.
      1. Business owners are individuals too. They need to have their life insurance reviewed. Once they’re a client, you can talk to them about business planning and other creative uses of life insurance. It’s more difficult to do that when they’re still a prospect.
    4. Agent Joint work – is important for any case that’s “too big” for you to handle.
      1. Don’t get bogged down in learning everything about this case, but participate in all of the meetings with the prospect. Don’t “dive into details & analysis paralysis.”
      2. Be ready to give up AS MUCH COMPENSATION AS POSSIBLE just so you learn how your joint work partner works with such a case. Let your joint-work partner DO ALL THE CASEWORK. The education and small compensation is worth the cost for an invaluable education. Eventually, you won’t need joint-work to help you work with such cases. Remember: 20% of something is better than 100% of nothing.
      3. Have a case-compensation agreement in writing BEFORE you begin working together. Keep your manager and GA in the loop of your working together
    5. Beware of parasidic “partnerships” in youragency.
      1. If you go into a “partnership”, never stop prospecting for your own business. If the partner is not interested in helping you build your clientele NOW, then say no. You’ll end up being a case-slave working on a commission basis.
      2. If you decide to entertain a partnership idea, make sure you truly understand what their current workload really is. (I was once told by a “partner/mentor” that he had 30 open cases. What he really meant was that he “brought up”a product and the other person said he’d be interested in some information. That’s NOT an “open case”, but a suspect. Far from it being an “open case”. Found this out the hard way.)
    6. Build your clientele as quickly as possible.
      1. One-call closes are preferred; learn the medical close
    7. Send a newsletter of some kind every month to every person who has ever contacted you, applied for insurance or is a policyholder
      1. Be sure to send a newsletter to everyone in your address book, including your friends and family. You can start with a “business announcement” and then just send them newsletters going forward. Eventually, they’ll ask you how business is going. They’ll see you more as a professional since you’re sending a newsletter every month. Your positioning is improving in their eyes.
    8. Focus on selling term life insurance for your entire 1st year to each person
      1. Depending on your contract and number of apps you submit, you CAN make a decent living (despite what your manager or home office may tell you).
    9. Get a LOT of applications for term life insurance – 1st year goal should be a minimum of 200 applications for the year.
      1. 200 apps x $500 Annual Premium = $100,000 Annual Premiums
      2. Is this not a reasonable goal?
      3. Some term applications will be much higher than $500/year, so you should make more even with “not-takens” and other issues.
    10. Study the creative use of permanent life insurance to help inspire others to WANT to convert a portion of their policy.
      1. Infinite Banking, LEAP, Circle of Wealth, Found Money Management, Missed Fortune, Premium Offset by Policy Values
      2. Study during “non-paytime” hours, not as a substitute for prospecting. There is nothing you’ll learn that will create an instant prospect.
    11. HELP your prospects & clients by doing MORE than they expect:
      1. Help them free up MORE money in their budget than you’ll ask for in insurance premiums
      2. Note: If you ask for less than 50% of what you find… and ideally less than 25%... you’re going to get the sale and a client! They will become your raving fans and refer you to others… because you aren’t greedy with their money.
      3. Of course, some may want to put in more. Restate why you made your recommendation, then ask if you misunderstood their intentions. Be sure you are clear with what they want to accomplish, then help the client get what they want. (Think of how it would feel for the client that they want to put in more and you’re resisting it! Doesn’t that make them want to do MORE business with you?
    12. Help them with all facets of their financial plan. Ask them about their wills & trusts. Ask them about their investment performance (without giving specific buy/sell or other portfolio advice if not properly licensed to do so.). Ask them about their P&C coverage, their employee benefits and banking.
      1. Re-emphasize that you get paid on the area that’s the “Least Important” and that’s their life insurance! – High Touch Selling, John F. Savage, CL
    13. If you have to do a 2-call close:
      1. Learn to do a complete fact-find session along with a 1-page presentation summary that shows that you were listening.
      2. Always propose and expect to sell an appropriate amount of Term Life. (Some insurance is always better than none.)
      3. Show what a permanent policy CAN do for them… so they’ll WANT it. (That’s a good“take-away”)
        1. When you do this, show a simple illustration with a small policy ($100,000 face is a good amount to show what’s possible.)
        2. Emphasize that this is one of the reasons why you’ll be in continuous contact with them: overall financial improvement and to help them to convert their policies to where they’ll have more cash than they put in and increase their overall protection portfolio.
    14. You don’t need to “get it all” right now. Once you have them as a policyholder or client, you have the opportunity to convert a portion of their policy every year. (You will be in the business for a long time,right?)
      1. Allow no “china eggs”! Follow up with newsletters, but after 2 meetings, they should either apply for coverage or not. Since you have a prospecting system to get in front of as many people as possible, you’re simply too busy to wait for them to decide. You’ll be happy to hear from them once they’ve decided. Keep their file on record, but take them off your “pending business” list.
    15. Review their situation every year to be sure that they’re actually making progress towards their total financial situation.
      1. Always ask for an opportunity to convert a portion of their policy every year
      2. At each review, ask for referrals &recommendations
        1. You have done exactly what a good agent should do– remain in contact by mail, email, phone. You have sent newsletters & letters. You have not been greedy with their money. You are building a relationship worthy of trust and confidentiality.
    16. Securities licenses
      1. Wait as long as possible before studying and obtaining these “professional handcuffs".
      2. If you’re producing, your manager needs to just “get out of your way” and let you keep doing what you’re doing. Remind your manager that if you take time out to study, that your production will drop immediately. (He won’t like that.)
      3. In the meantime: find a good investment rep in your firm to refer such business to them and keep the relationship “in house”. You won’t get paid on it, but once you are licensed, you can transfer the account back to you to collect the trails (if any).
      4. Or establish your own RIA firm in the future to handle securities on a fee-basis (if you’re an independent agent)
      5. Or work with another registered rep outside of your firm with an express agreement that you won’t do what they do and they won’t do what you do.
    17. Begin taking LUTCF courses.
      1. These are SALES courses. This will help you accelerate your progress and education in your new career.
      2. Once completed, take CLU & ChFC courses.
    18. Join NAIFA & attend local meetings along with YAT meetings
      1. This will help you understand more of the industry and political movements. YAT meetings (when properly organized) are a great recruiting ground for more NAIFA members and offer additional training opportunities.
    19. Focus on the “organic growth” of your clientele. Always lead with term and work on conversions overtime. Build a HUGE term insurance book of business with companies that offer competitive permanent products to convert to.
      1. After the policy holder has term, review their disability coverage. This is a natural “cross-sell”. A 2-year benefit with no COLA rider is better than nothing, and should be affordable – if you helped them to free up the money and you didn’t ask for all of it!
      2. Your mission and goal should be to have as much death benefits on the books as possible. Plenty of room for conversions and it’s a great indicator of how much good you have done to help protect the families you work with (even if it is terminating protection).
      3. If you’re looking for small deals, you have bigger deals come to you because you are actively engaged in building your clientele. See the Joint Work recommendation above.
    20. Resist the urge & temptation to put everyone you meet through the “same sales system process”.
      1. The temptation lies in the myth that committing to ONE system and platform will make YOUR JOB easier. The end result is that you will cap your income and limit your communication tools available to you. The vendors who offer these systems have a “siren song” that if you use their stuff, all your troubles will be over and it’ll be easier to manage your business. It’s a myth – don’t fall for it.
      2. Instead, you may want to obtain and utilize multiple tools for different situations:
        1. Learn how to fully utilize your company’s illustration systems.
        2. LEAPers would have you believe that they are the “be all and end all” to financial planning and that everyone should go through and experience ‘LEAP’.
        3. Circle of Wealth – same thing
        4. IPS Found Money Management – same thing
        5. IPS Mortgage Life Insurance Tool Kit – same thing
        6. Virtual Sales Assistant – same thing
      3. But imagine a MIX of some of the above… would be great at the hands of a skilled practitioner who knows how to utilize and maximize their use of these tools!
    21. Focus on your company’s product line.
      1. The image of “offering a lot of products to be objective” is also a myth. Your company offers enough variety for you to be objective.
      2. You can be objective by simply stating: “My company would rather have me sell you the most expensive product possible, so it would line their pocketbook. It’s a great product, but I don’t agree with that idea for you and your situation. I like my company, but I’d rather see you have the protection you need at a reasonable price for you and your family. So, I recommend ____. This will help you get what you need without “breaking the bank”. Now, here’s what their “flagship” product can look like for you… but we can do that over time. There’s no rush to do that today."
      3. Only go outside of your primary carrier when the applicant is declined. THEN you shop around to see who can make an offer of insurance for the declined app.
      4. When you put all your business with one company, you will have “business bargaining power” with underwriters. If you spread all your business around, you will have NO bargaining power because each company is only getting a fraction of your business. You want underwriters to know you by name (in a good way)
    This is what I've had to learn the HARD WAY in this business. Somewhere I learned this - either as a conclusion to events, or I read it somewhere and it "didn't take".

    I truly don't want anyone else to have to go through what I went through (and AM going through). I'm smart, but I've been "too smart for my own good".

    Learn and apply the simplicity of this business... despite what you learn in agency meetings. Keep to "plain vanilla" and make MORE money! You'll find more opportunities to do the advanced stuff when you learn to recognize those opportunities. However, those opportunities will never materialize unless you are in front of prospects on a regular basis (multiple times a day).
    Last edited: Apr 3, 2011
    DHK, Apr 3, 2011
  4. xrac

    xrac Guru

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    Good post DHK!
    xrac, Apr 3, 2011
  5. scottstreet

    scottstreet Guru

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    Thanks,fantastic post for a newbie like myself. Do you have any specific advice on how to get in front of enough people to submit 200 term apps? TIA, Jim
  6. DHK


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    Finding the money:

    People don't naturally have extra money to afford insurance, so you need to help them find it.

    Review insurance deductibles. If they raise the deductibles, how much money would they save?

    Review debt structure: If they take out a home equity line of credit to pay off debt, how much cash flow has been freed?

    Review their priorities:
    - Should they be putting money in their 401k when they have no life insurance?

    Review their paycheck withholding: Are they withholding too much for taxes? If they increase their elections, they'll have more money to work with.

    Just gotta know where to look and how they would feel about moving and changing that aspect of their financial lives.

    These things aren't secret. You just need to know where to look for the money.
    - - - - - - - - - - - - - - - - - -
    Scott -

    If it sounds like hard work, that should be your 1st clue that it would be a worthwhile activity.

    Remember that every life insurance company would LOVE to cut the agent out and keep the commissions. If advertising, telemarketing (only), seminars only, flyers only... all these things that most agents spend their money doing... the company would do and cut you out.

    So, what is left? See the people!

    There are only 2 ways: Phone & In Person. Now, I can't stand the phone. I let all my phone calls go straight to voice mail to help save me time.

    So, I would go in-person. Residential &/or Businesses.

    Talk to as many people about their life insurance.

    "When was the last time you reviewed your life insurance with a professional life insurance agent?"

    "Are you comfortable with the amount of income that insurance would provide for your family?"

    "How much insurance do you have? How long would that money last your family? Would your wife have to go back to work? Could she make as much as you do right now?"

    "If you're not interested now, would you mind if I put your email on my email newsletter list?"

    Be up front and honest about who you are and what you do. You'll get a lot of no's! That's okay! Get a lot of no's every day! Not everyone will be interested! (If everyone would be interested, it wouldn't pay nearly as well!)

    But get a LOT of no's every day - but get no's because you are being true and faithful to who you are and what you do.

    I'd rather hear a 'no' while being true to my purpose, than a 'yes' and have hidden my true agenda.

    Some of these agencies teach you to avoid telling people that you're a life insurance agent. They confuse people. They say "I help you organize your financial junk drawer." or "I help you organize, integrate and coordinate your financial picture."

    Well, that's nice, but what's in it for you? You see, it inspires suspicious motives. Don't do that. Be true to yourself and be honest with what you do and why you want to meet with people - Life insurance!
    Last edited: Apr 3, 2011
    DHK, Apr 3, 2011
  7. scottstreet

    scottstreet Guru

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    I'm fine with the hard work I simply want to have a degree of confidence that it will work....Specifically with the phone and in person are you talking about cold calling businesses and residences (door knocking)?
  8. DHK


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    Both residential and businesses - WALK IN OR KNOCK! People would rather SEE who they may do business with, rather than an anonymous phone call.

    I can't tell you that you will write 200 lives if you follow my advice. (This also shows that I'm not trying to sell you anything. Always underpromise and over deliver!)

    I can tell you that you have to get through as many "no's" as possible each day so you can GET a couple of "yes's" each day. And that's just for appointments!

    Welcome to Nick Murray Online

    I really like Nick Murray. He's written some classic books for investment advisors about prospecting. The link is for his new book, which should be just as good as what I've read in the past from him.

    Once you know your own ratios, the world is YOURS.
    - Will you be able to stay in the business to determine your ratio?
    - Will you use a simplified process to help people make the good decision to work with you and apply for a policy?

    There are way too many variables! But the simpler you make it, the easier you'll sleep, and the better you'll communicate with your suspects, prospects and clients.
    Last edited: Apr 3, 2011
    DHK, Apr 3, 2011
  9. GoForBroker

    GoForBroker Expert

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    Great Information!
  10. DHK


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    About Infinite Banking as a prospecting tool:

    Keeping true to my own philosophy, it's important to just focus on life insurance as a protection product FIRST... then once they're a policy holder, you can talk about the other living benefits when they convert.

    Don't forget that with Infinite banking, you have to have CASH SURRENDER VALUES to borrow against. You can use PUA (paid up additions) to accelerate the process, but you've still got the actual costs of the insurance. In whole life, that's typically the 1st 3 years of the base premium that's going to pay for all the lifetime benefits of the policy. After that, it's practically dollar-for-dollar going into the cash values of the policy.

    If they don't want life insurance, then infinite banking may not be appropriate - even if it will pay for itself over time.

    So, I'd offer Infinite Banking to term clients... or as an idea when you deliver a term policy... but because of the costs of insurance, if they don't want insurance protection... what's the point?

    BTW, what do you think you should be sending to your term policy holders? A newsletter that expounds on all the benefits of permanent life insurance! Send them a new concept every month for 12-24 months! Something that will make them say "It can do that?" Perhaps a handwritten note saying - "When you're ready, we really ought to look into a plan like this for you as soon as possible".
    Last edited: Apr 3, 2011
    DHK, Apr 3, 2011