- Thread starter
- #121
Given that you think the above is a great price, is Legacy still a benefit if the family uses this funeral home?
Senior Life Unannounced Rate Increase-Normal/Abnormal?
- Thread starter titeye
- Start date
- 4,872
I'm sure there have been some "no's" for some agents. But for me personally, I've never had anyone to ever say to me they didn't want Legacy. Not once. I'm talking about my sales made, not talking about my leads worked.
Just like when I would be doing a face 2 face sale. After I've got the check, I let it just sit there on the table. 10 min later, after we've finished the warm down, when I'm getting ready to leave, I grab that check and hold it up to Ms. Jones. I then say "now Ms. Jones I don't want you to think I talked you into something you don't want. If you're not completely satisfied with what we've done here today I want you to take your check back". Not once have I ever had anyone take the check back, not once, and that stretches back to Feb. 1999 when I got started with The Powell's. I would never have done that on my own, but that's the way we were trained and it worked like a charm.
And check this out: Every once in awhile you visit a couple and just 60 sec after you get in the house the husband starts bellowing "we're not going to do anything today". And I smile and I say "that's fine, my job is just to share this free information ya'll sent off for".
30 min later when I have the check and I'm offering the check back to the husband not once, ever, has anyone taken the check back.
That's called salting the business down. It improves persistency and loyalty. Now contrast that to an agent leaving the house almost immediately after getting the check because he's afraid Ms. Jones might ask for her check back.
That scared agent will have the weaker persistency because he didn't set the hook real well before he left. And when you don't set the hook well that fish, I mean client, will wiggle off the hook and be gone.....to be caught by another fisherman, I mean agent, down the road sometime.
- 4,872
Probably not. That's why I said that funeral home was a rarity.....charging $4925 for a funeral. However even in this case Legacy's $4 membership would probably still be worth it. The living benefits for the member and their 4 family members would provide more than $4 per month in savings. ie: discounts on diabetic socks and diabetic shoes, 24 hour telemedicine, discounts on hearing aids and a free hearing exam once a year.
And if one of the family members were to move away and be living in another state at their time of death, and there was no funeral homes close by the deceased that did funerals for $4925, then Legacy would help lower the price of that person's funeral.
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- 4,872
I was talking about my sales made, not my leads worked. Over half of my leads don't buy.
- 4,872
Use the rule of 72. If interest rates are averaging 3% then it would take 72/3=24 years for prices to double. If interest rates are 4% it would take 72/4=18 years for prices to double. And so on.
OR
If you wanted to know what the interest rate needs to be to have prices double in 8 years, you would 72/8=9% interest. That means 9% interest would cause prices to double in 8 years.
damadcrapper
Super Genius
- 166
Has anyone determined the approximate rate increase?
That is about the norm around here..
- Thread starter
- #128
I'm familiar with the rule of 72, but I don't think that tells anyone the breakeven point between Legacy's membership fee + their casket costs versus the funeral homes casket costs.
For example, if client buys policy with Legacy today and passes away 12 months later, he/she pays $1,200 for casket, plus $48 annual membership fee. Arguments have been made that a casket of same quality can be purchased at the funeral home for $1,500 (plus or minus). What these guys are arguing is, if he client can get more coverage ($2,500-$5,000) for the same premium or less with a different carrier, they are better off; especially if death occurs sooner than later. The Legacy casket benefit by itself does not appear to be all that attractive, even in the long run. That is why I said a break-even analysis is needed.
If caskets can be purchased at a funeral home for $1,700, using your Rule of 72, it would take 24 years for the price to double to $3,400, given a 3% COLA. At the time of purchase, Client A recieved an extra $2,000-$5,000 increase in coverage for the same premium per your competitors policy, compared to Client B who gets the $1,200 Legacy casket price 24 years from now, plus would have paid an additional $1,152 ($48 x 24years) in membership fees = $2,352.
So the question becomes, is Client A better off recieving $5,000 in coverage and paying $3,400 for a casket 24 years later from that same funeral home, with $1,600 in cash remaining, or pay $2,352 using Legacy saving them the $1,048 that otherwise would have been paid to the funeral home. For all intents and purposes, it's 6 in one hand, and a half-dozen in the other, even though it appears they benefit by an extra $552 with the bigger policy. Take into consideration the time value of money, your talking only $269. This may also explain why no other insurance company has replicated such a strategy.
Insurance companies employ actuaries, who make some of the best financial anaysts in the world. Legacy did not pull out of thin air a $4 monthly membership fee and $1,200 fixed casket price. This is Master's level Finance. They ran the numbers and calculated the present value of a future income stream. This is why Legacy has increased its membership fee over the years from $1 to now $4, but can keep the casket price fixed at $1,200. The majority of the world's population is either oblivious or ignores the time value of money and how finance works, that includes insurance agents. This is why the majority of Americans are in debt. The genius of it all lies in the marketing; making it appear to be something more than what it actually is. And there is absolutely nothing wrong with that. Personally, I think it's brilliant!
This is not unlike the car salesman asking the customer how much he wants to pay per month, then calculating the number of payments required to reach the dealership's desired outcome. There is no right or wrong, per se. They are simply adjusting to how the customer perceives value, in order to still get what they want in the end.
That's why I can almost guarantee you'll see other carriers come up with their own "Legacy type" program. Some of them will need that improved persistency to stay afloat, especially with the super low interest rates they are getting on their reserves.
LOL...."I love your predictions like, word on the street is all FE companies will be raising their rates this year".
If the other carriers wanted to come up with something like Legacy, they would have already done it. Of course, Legacy Safeguard has been around.....I think, before SL's Legacy program.
Not sure what street you're walking down, but I think you're in the wrong neighborhood!
- 4,872
Legacy Safeguard doesn't even come close to providing the savings that Legacy Assurance provides. I suggest you google "legacy safeguards" so you familiarize yourself with them. They seem to be like these free memorial guides that carriers give to their policy holders along with a membership card that seems not really have a purpose.
As far as "if the carriers wanted to come up with something like this they would have." LOL. Here's an example of why you're wrong: Sr Life started perfecting FE tele-sales in 2004. Yet carriers are dipping their toe in the water with FE tele-sales around what...2019? These carriers are slow moving dinosaurs. They're slow to react to a changing market, They're mostly run by lawyers and accounts and other people who have never sold even one FE policy, much less been in one of these FE homes, or even been in the hood. They have too many committees and layers of mgmt. to go thru before they can make a decision. They can't relate to what agents go thru on a daily basis. Thank goodness Sr Life's CEO, President, Executive Vice-President and other home office staff are licensed and have run leads for many years before Sr Life was created.
As far as carriers raising rates someone else up here, that's "in the know", explained why carriers would be raising rates this year. Looks like you missed it. I thought with the pull you have that you would have a close enough relationship with your carriers to be privy to this info. No worries though. There's a lot of things I don't know either.
