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Good thought. I'll have to use the risk management line. Does anyone have a needs analysis questionaire that they are willing to share?
Selling Life Insurance...
- Thread starter James
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Good thought. I'll have to use the risk management line. Does anyone have a needs analysis questionaire that they are willing to share?
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- #22
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I can imagine everyone goes thru that! Getting use to asking personal information can be quite nerve racking, untill you discover most are not bothered by it. Now I do run into some that just will not hand over information except what they deem necerssary, yet even they the most strident of them will happily do it in the second or third year of working with them. They say time heals all, I imagine time also breeds trust?
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- #23
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Depends, do you want to cover the Need or the Want? If you sit down and talk to this guy or anyone you'll quickly or should hear about what they want for the future. To cover needs is never all that much if you drill down outside of using a simple 10, 15 or 20X factor which I don't think serve anyone all that well.
What I'm referring to is the "Human Life Value", much what you'll find if you check out "Leap", basically that is what it is base on. What you basically do is figure out Replacement Value of Income, for that you average out the rest of the working or productive life of the individual. Take your plumber bringing home 200 grand, if he is 40 and now expanding you basically estimate what his take home would be in 30 years, if he figures he'll be bringing home 500 grand you average out his income. Say we figure out that 350 grand is what he'll average out till he retires at 70 or whatever, that is the base, you want to replace 350 grand. As most experts would say to achieve an income out of a lump sum for lets say 30 years you figure 4% you can take yearly.
What we are talking about here is about 5 million in LI too cover his income for his family. Now some will say that is way too much, the need isn't there, such as he is no longer in the picture? So ask him, do you want to cover 100% of your income plus potential or just cover lets say 60%, some say "I want to cover 100%" if it is affordable, remember term is cheap! Now do you use ART, 10, 20 or more in term? I like ART and 5 or 10 depending on age and health and a plan of conversion at later date. ART is great, cost is ultra cheap esp in the early years. Of course others will debate that issue, but remember you are going to set up a yearly meet to review his position, obviously the need will go up and down as long as converting a portion to a perm. plan.
Now for the cost, first thing you have to do is too figure out how much he wants or willing to spend. Let us assume 5% or $5,000 this year, you can purchase a Mass Mutual 5 million 5 year term for around 3,000 a year. So basically you simply buy as much WL or UL as you can leaving enough as a term rider or stand alone with the same carrier, to cover the other portion into term to get him to the 5 million level. Likely it'll be around 400-500 grand WL or UL and a term worth 4.5 million, of course as his income goes up you convert more into the perm plan. Now obviously these numbers will change, here we are talking about a person willing too (this is only a assumption) cover the Human Life Value not just Needs Value.
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Hey James, I came across this post of yours on another board
Edit: Forgot to ask.... James, your knowledge is truely impressive and I have learned much reading your old posts. 1, when is the book coming out? 2, Please describe you course of study. I'm probably not the only one on this board who would like to possess your grasp of insurance.
I'm starting get your point in splitting between term and perm. Would really like to know more about how you present the curve.
Edit: Forgot to ask.... James, your knowledge is truely impressive and I have learned much reading your old posts. 1, when is the book coming out? 2, Please describe you course of study. I'm probably not the only one on this board who would like to possess your grasp of insurance.
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- #25
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Hey James, I came across this post of yours on another board
I'm starting get your point in splitting between term and perm. Would really like to know more about how you present the curve.
Well lets say this, it all falls upon affordability and the idea of WL, most people I run accross like WL in general. Yet the cost is too one degree or another an issue, one would be a fool to say otherwise. This is selling to the want, the want or desire to have insurance for life, which I'm a big believer in! Just because you age and retire doesn't mean you don't need insurance, most never really retire (esp business owners) and most will need insurance for one reason or another.
Once you sold that, WL or insurance for life you now come down to affordability issues. If someone is 35, you have another 30 years to work with them on a yearly basis, in other words don't view it as all or nothing now. Show the client the split that fits in his budget and gets him to the point of being fully covered to his or her needed point. Even if its a small WL policy, may that be 25-50-100 grand split with term that is your starting point today. Or even no WL or UL this year, get them covered!
Now you present them in general terms, such as a curve line too demostrate how one grows, when young you have a lot of life potential, increasing ones need for insurance. When aging one builds capital as in savings, yet they have less life potential as they have less life to live. So naturally their insurance needs go down, but it doesn't go away. In fact they start to see that the insurance needs they have now will stay with them for life, as in need of more WL but less Term and since they are older and likely in a position they can afford more WL or UL. Of course this changes gradually over life, why you have to be true too them and keep in constant contact and service your clients, year after year!
G
Guest
Guest
James, can you give us a rough estimate in overall cost between term and WL for 40 year old man who wants $100K... and let's assume he dies on the day before his 80th birthday. (Can we assume he can buy 2 20year terms or one 40 year? I don't know the breakdowns.)
You have a book coming out? I'll buy the first copy! Hell, I'll by a draft of the MS! (I'm trying to learn the ins-outs of life ins. without joining a captive company for a year to teach me... and you da man!)
Thanks,
Al
You have a book coming out? I'll buy the first copy! Hell, I'll by a draft of the MS! (I'm trying to learn the ins-outs of life ins. without joining a captive company for a year to teach me... and you da man!)
Thanks,
Al
- 2,908
Get appointed with some carriers as an independant agent and start getting your arms around their products and their quoting software.
Genworth, West Coast Life, and Prudential would be good to consider but others would work as well. Go with a brokerage agency that has good quoting software so that you can run comparisons between different companies to see what is competitive for the scenario that you are looking at, then use the carriers software to look at their options in more detail and to be able to print out illustrations.
Winter
G
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Yes, "Winter" your advice is excellent. But I also need to learn the 'theory' of life insurance.... basically the paradigms of when one should suggest term, or WL or a combo. I figure there are some texts or training material available somewhere. I don't expect to learn it all in one year, but I need to know the basic strategies and when I have a question on details that's what this board will be good for (I hope.) I was fortunate that I had many years of experience in the healthcare industry and have bought many different policies myself, so the learning curve there was not all that high (for IFP.)
But life is more complex and has more options and you can cobble different products together to achieve certain purposes. I need to learn that. I won't happen overnight. If I were younger I'd join a captive company but very few want someone about to turn 60. You should see the look on their face when I walked into the interview for NYL and Met. It was a contest to see which of the interviewers could be more polite and still reject me and not get hit with a age-bias suit!
Makes no sense. There are a ton of folks starting to hit 60... and a lot of them have a few bucks in their jeans. I'll bet a bunch of them would buy life or annuities from someone who knew the tune to "White Bird."
Al
Adams-Blake Insurance Solutions
Fair Oaks, CA
- 11,280
Sometimes people get turned down for other things besides age. Not saying that was not the reason but who knows.
G
Guest
Guest
I didn't reach the point of being turned down. I got such a chilly and 'forced" reaction from the 35 year olds who talked with me that I decided that it was not a place I wanted to work. I did sneak around after the interview (it was a large office and I was dressed well so I "looked" like I could have worked there and looked in the offices and the cubes and out of the 15 guys and gals who were there, I didn't see anyone who looked over 25. Of course the others might have been out selling. Still, when an agency relegates the screening of new agents to junior players, it tells you something.
I would have had no problem working there, but I could tell these folks did not want "their dad (or in some cases their "granddad") working with them. I understand completely. It's human nature. A saying I learned long ago when I was a trader, "Don't fight the tape." (And I remember when brokerages actually HAD ticker tape! It was great for parades... like when John Glen was in New York after his orbital flight. That was so cool!
Al
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