Selling Life Insurance...

[James]

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

Well Al, we don't agree on much but I think we agree on somethings related to life insurance if I remember some of your previous post on various subjects. I personally think the most important thing in selling life insurance is not the product knowledge but the knowledge of what makes people tick.

Say a 40 year old, wants 100 grand combo, kind of a small amount but the cost would roughly be between 500-700 dollars annually for 25 grand WL and a 75 grand 20 year term (I would likely go with 5-10 year at most and even use the ART if available) with PUA, Waiver of Premium. That would be with Illinios Mutual, cost for MM, NYL or NML would likely be about the same maybe a bit higher depending upon the health of the client. Now with this of course you make an appointment too review in 6-12 months later too see if they have any other needs, such as DI. Now you could sell a flat 20 year term and save him a few hundred dollars per year, and yes I suppose you could set an appointment for 20 years out too resell another 20 year term? I really don't like letting so much time go by between reviews or meets but obviously others seem that this is about right time frame? Seem to me that people who are aggressively sellling Price Issue using Term or even the newer UL's are constantly scratching for new business?

Here is the yet another option, sell the NLGP that is so popular but I would suggest you checking out the articles and others about the hidden fears of companies that are too aggressively marketing this New or Newer better improve UL by Katt. The Potential Problems with Lo-Lapse Premium Guarantees, and Agent listed another interesting article on the SGUL which is here, http://wholelifeinsurance.com/the other side of the story.pdfhttp://wholelifeinsurance.com/the other side of the story.pdf


Now I betcha you know what makes people tick! It is simply called SERVICE. Second thing that makes people tick is interest of them as a person, ask them what they expect out of their business or profession and when they are planning on retireing? Sell good products, get with MM, NML, IM, MT and a host of others. This way you are assured the product is "Excellent" and the service is outstanding! Then you can concentrate on the individual and not the product, and never get into price selling!

Ps yes you have to learn the product, didn't want to end it with some thinking that having no knowledge of product is what I was referring too! Yet on the other hand why learn about a bunch of trash products? Outside of being able to sell against them, that you'll need to start studying up on actuall policies and the finer details, such as so called Guarantees. Once you purchase a WL or UL the only REAL guarantee is the performance of that carrier and nothing else in reality. So pick wisely.

 

[padthaiforlunch]

Say a 40 year old, wants 100 grand combo, kind of a small amount but the cost would roughly be between 500-700 dollars annually for 25 grand WL and a 75 grand 20 year term (I would likely go with 5-10 year at most and even use the ART if available) with PUA, Waiver of Premium.


Ps yes you have to learn the product, didn't want to end it with some thinking that having no knowledge of product is what I was referring too! Yet on the other hand why learn about a bunch of trash products? Outside of being able to sell against them, that you'll need to start studying up on actuall policies and the finer details, such as so called Guarantees. Once you purchase a WL or UL the only REAL guarantee is the performance of that carrier and nothing else in reality. So pick wisely.

ART=???
PUA=Pick-up Artist???

Guess it's time to start reading sample contracts....

 

[James]

ART=???
PUA=Pick-up Artist???

Guess it's time to start reading sample contracts....

LOL, sorry!

ART= Annual Renewable Term
PUA= Paid Up Addition, as in WL, it pays above the guarantee or current interest rate as in more DB and larger CV.

 

[James]

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."

I have no doubt this is true but, it seems like all companies are targeting the younger X and Y generations. Lets face the truth, seniors and near seniors have the buying capital! Makes no sense to me?

Okay, by now if one is interested in making a living selling Life Products you should have some working knowledge on the products, as alway have one or two you know well and can lead in with.

Now if you do that and, have the ability to offer a bigger plan, such as WL, Term and DI you are going to face the "Brick Wall"! The brick wall is simply the budget may it be impose by want or need, they have the money but, don't want to spend it on these products or don't have the money. Either way, that is your main obstacle. While I may be all in favor of the idea of niche marketing, it does in a way rule out in most cases a complete insurance plan that, would likely be able to help!

The second big obstacle, which is the Passion of the product. We can be critical of the Susie Orman's and Dave Ramsey's of the world but, without a doubt they display passion for what they are pitching! Which in itself is a convincing reason for anyone to purchase what you are selling. It is a simple fact of life, as in human action, people want to see passion and will follow just about anyone if they see a vigor and passion. While not always true but, it surely does help!

The third critical test, being able to sit there in front of them and, show them what they may believe to be true is in fact not true. One of the easiest thing to show them is this, ask them their number one investment, what do you think they'll tell you? We all know what that is, their home! Without a doubt that is what you'll hear 99% of the time. What follows, is that they have a thirty year mortage and it'll be paid off by the time they retire. This to them is a great plan, in most cases if the answer is a "Paid Off House" I have them, if there is no other reason! Run the numbers with them, if they will, some will not! Yet, if they do I never had anyone come back to me and say, you know James, you was wrong! Never has that happen! (or maybe I wasn't listening?)

Basically what you want to show them is this, having a paid off house and a underfunded retirement plan is not as good as having a house that is unpaid for with a large retirement funded plan. It works nearly every time if you can get them to run the numbers! Now what you do after that, after you show them what they thought to be true really is not is basically up to you, I'm not here to suggest any one idea but, simply a way of getting them to open up and understand the issues they are facing.

Now if you can do this, the sale you are seeking is a lot closer then it was before this! Now this demostration doesn't take long and, with a pen, yellow pad and calculator I can show them in less then 30 minutes usually. Of course documentation and a formal plan has to be done in a second meeting.

 

[CHUMPS FROM OXFORD]

There is nothing wrong with selling term policies. Remember...if you sell two per week for five years...you have 7 different people each week to discuss a conversion (70% retention).

After 25 years...well, you'll be a busy beaver.

 

[James]

There is nothing wrong with selling term policies. Remember...if you sell two per week for five years...you have 7 different people each week to discuss a conversion (70% retention).

After 25 years...well, you'll be a busy beaver.

Yea but, I suggesting to max out one's potential from the get go. Why wait five years?

 

[Delta76]

The life insurance sale, at least in 85% of the situations requiring income replacement, the sale is really simple. Here is my process:

1. Determine the need. Don't worry about term or permanent at this point. "If you die, who needs money? How much?" The client may say $50,000 a year for my spouse. "Great, if you died today, how much would your wife get?" Take there current death benefit and times it by 5% (a reasonable withdrawl rate over 30 years). Find the gap in coverage, then test the desire to fix the problem. "Is this a concern to you?"

2. At this point, I decide whether or not to do a one or two meeting close. If I go for a one meeting close, I usually give a quick permanent vs. term eduction ala Burt Meisel using three columns (increasing premiums, level premiums, decreasing premiums). If you don't know what I'm talking about, buy Meisel's book, "Satuday Always Comes." I can tell at this point if they buy into the concept.

3. Close for a premium committment. "Most people would like to buy all permanent insurance, but they don't have the $800 a month to do so. So what most people do is pick a monthly premium they're comfortable with, buy as much permanent coverage as possible and fill the gap with term insurance. How much is a reasonable amount for you at this time?"

4. Now I go for an app to start the process. "Now that we know we have $150 a month to work with, the next step is to fill out an application and have the insurance company make us an offer. Do you think it makes sense to get an offer?"

I completed the process, didn't show an illustration, and I have a premium committment. I then go back to the office, use my computer to determine what the right combination is to land near the $150 per month, and send in the application. If I didn't know anything about life insurance, I could call up my MGA, explain the amount of coverage needed and the premium committment and have them work up a proposal.

 

[James]

buy Meisel's book, "Satuday Always Comes." I can tell at this point if they buy into the concept.

Great book! If anyone desires to buy it, you can get it here.
Welcome to MDRT

 

[James]

3. Close for a premium committment. "Most people would like to buy all permanent insurance, but they don't have the $800 a month to do so. So what most people do is pick a monthly premium they're comfortable with, buy as much permanent coverage as possible and fill the gap with term insurance. How much is a reasonable amount for you at this time?"

Yes, the budget is the Brick Wall without a doubt! Yet, I am a firm believer that WL (as much as possible) and DI is essential to ones financial health. The only point is, if one day you wake up and, have a desire to lead the sale then the strategy has to change, IMHO.

The budget is key, here we as agents and yes financial planners also, want to compete for the golden grail of 10% savings theory. Or as you suggest we find that they have this amount to spend on Insurance, much like the FP'er takes this theory also, they have this much to invest. Yet, who is there to show them that the 1%, 5% or 10% is insufficient to achieve what they really need to do? Now keep in mind, every study out there by various of sources including "Greenspan" is suggesting people are just way off base, as in 34% of the average family income is being spent on just servicing debt, not the debt itself but just the interest of the debt! $800 dollars monthly is significantly smaller then their average montly debt cost of loans.

If these studies are true (which to one degree or another I'm finding), the average family that has a household income of around 75 grand is spending $25,500 yearly or $2,125 montly on interest of debt. Now if you can address that effectively, you open up a lot of money, this also doesn't challenge their "Lifestyle" which is something most don't want to look at, including myself so it just makes sense to me so why not look at the cost of their Lifestyle? Some one is going to come along, or likely to show them this paradigm, it might as well by me as pete down the street.

 

[padthaiforlunch]

I'll Bite. How do you address their debt issue? Better yet, let's hear the solution to the lifestyle paradigm.

Now that credit markets are tightening up, it's not so easy to get a second on the house to pay off the credit cards or fund a WL policy.