The Sale

[James]

Now I understand, I sell HSA's to a limited amount, and really believe in them. Yet I also am a strong advocate for LTC Policies, now since the LTC premium can come out of the HSA and the new policy of dumping money in the HSA up to the yearly contribution in the first year should make this easy! Yet I have very limited (very limited success) with the idea that LTC should be a no brainer! I don't know, I have better luck on regular apt's selling LTC then with people I sold an HSA to, just don't get it? I guess I need to sell more HSA's, yea that'll do it! Or I guess I need better clients???

 

[James]

The Solution!

Someone ask me one day, "How does one build interest or urgency to the life sale?". Now this isn't a easy thing to do, but I already brought up the Wedge Issue (in fact a book called "The Wedge" by Randy Schwantz is excellent!) which is basically finding a problem to correct! So basically unless you can find a problem that needs a solution it is difficult to create "Urgency", another reason why I like the "5 Way".

Now don't expect to find "Life and Death" problems to fix! More then likely the common problems you'll find (in the individual market) is cost and amount of Life Insurance in place by the client. So since most agents deal on the individual market we should learn how to address these issues or at least study the possibilities of varying types of solutions. How many Agents out there that touts the idea of BTID and yet doesn't understand the short term Term with the Renewability Clause? Lets face it, I know everyone has heard of this Clause but today most have never used it, seems a bit old school doesn't it? Yet its quite effective to lower the early years when money to your client may very well be tight!

Now the amount of Insurance, once you start running appointments you'll find most have limited amount of DB, most have no idea of proper amount needed to properly insure themselves. I warn you now, most people will snicker at the idea of 20X factor idea that many suggest is such a great strategy, at least in my experience. Sure it sounds good, yet and almost as a rule most Insurance Benefit will never find its way into a well developed fund to create income and in the back of everyones head they know it will never make it in such a vehicle. Go deliver a DB claim to any person, and ponder where is that money going to go into, I suggest for all due purpose 100% will be deposited at their bank. From there its anyones guess! More then likely shopping sprees and travel will likely eat up the money in short order.

So basically the only time we have to suggest a plan is at the time of writing policies, this is a great wedge issue to the couple, one is likely to be the "Money Manger" may it be the wife or husband. I'm not meaning to pit the two against each other but for them to think on how their DB (the one you are pitching should be dealt with) should be used and how much it is needed. Just one little wedge out of many possibilities depending upon your client needs and lifestyle.

 

[honestagent]

Having problems on how to describe my selling technique of an actual sale. So I decided to describe how I perform when selling to an average client interested in life insurance. I use Newsletters, ads and COI to develope prospects, say I'm walking into a situation of middle class Mr and Mrs America, we'll call them Chad and Belinda, they have two children, one is 7 and the other is 9. Now I don't know these people at all, they live in a moderate house of around here in E. TN a value of about 175 grand, I see two late model cars nothing special.

I walk up to the door and give it the old knock and they come to the door, kids screaming in the back ground about someone who stole someones gameboy or something and Moma yells back to go downstairs and do something. I make my introductory, "Hello, I'm James how are you doing today". I carry a small bag that contains a Review, some brochures and my trusty old Yellow Pad, no I don't use a Laptop and of course some rate cards and a few App's. I think any Life Ins. Agent caught without App's on person should be penalize $50 on the spot!

I usually suggest sitting at the kitchen table, just the "old school" part of me! First thing I do is suggest I'm there to perform a review of their insurance needs and check to see if they have proper amount of insurance in place now. In a way I hope they do have some insurance, too little or too much insurance, I find this better then those that don't have any insurance in place. Obviously those that have insurance in place see the value of insurance, those at this age with children that don't have any insurance is likely not to see the value of insurance which makes for a harder sale!

This is where I love to be, no matter what they say I have to figure a way on how I can do better for them. I have about thirty minutes to convince them that my plan is better then the plan of the last agent, LOL, yea the last agent! My golden parachute, most agents I assume got out of line when God was passing out common sense! Most people that have insurance in place, placed by an agent have not heard back from that agent, I rarely ever cross the paths of clients that have any relationship with their agent. So that is where I first go, when the last time you heard from your Life Insurance Agent? NEVER is almost 100% reply and that gives me my first in. So the idea is to review on how much they are paying, I call it Wedge #1 issue, they are paying too much, don't even have to think about it.

Okay, now let me place this on the table again, I'm a "Term then Convert" type of guy. I'lll quickly and can back up the idea of ten year term or even a 1 year policy with GR (guarantee renewable) over the idea of 20-30 year term policy and win about everytime in most issues of Suitability. I've even grown tired of the pathetic reasons for Long Term, Term Policies, it is basically a no brainer, it is called Term for a reason! Yet though, no one is gonna touch my prices.

This is the price Wedge Issue without having to sell cheap term policy. You sell the shorter term that requires a constant review of their insurance. In other words placing long term term products does little for your client or yourself as there agent, unless you don't expect to deal with clients for the next 20-30 years. There are other Wedge Issues, but I'm gonna have to take a break for now.

James, I take it you've read Randy's book. It's awesome, isn't it?

 

[James]

James, I take it you've read Randy's book. It's awesome, isn't it?

Yes it is a great sales strategy! One that has benefited me greatly.

 

[bobson]

Okay, now let me place this on the table again, I'm a "Term then Convert" type of guy. I'lll quickly and can back up the idea of ten year term or even a 1 year policy with GR (guarantee renewable) over the idea of 20-30 year term policy and win about everytime in most issues of Suitability. I've even grown tired of the pathetic reasons for Long Term, Term Policies, it is basically a no brainer, it is called Term for a reason! Yet though, no one is gonna touch my prices.

This is the price Wedge Issue without having to sell cheap term policy. You sell the shorter term that requires a constant review of their insurance. In other words placing long term term products does little for your client or yourself as there agent, unless you don't expect to deal with clients for the next 20-30 years. There are other Wedge Issues, but I'm gonna have to take a break for now.

Can you give us the 'Wedge' you use to "back up the idea of ten year term... over the idea of 20-30 year term policy and win about everytime in most issues of Suitability?"

 

[James]

Can you give us the 'Wedge' you use to "back up the idea of ten year term... over the idea of 20-30 year term policy and win about everytime in most issues of Suitability?"

"Sir, I see that you have a twenty year policy here, do you think your insurance needs will be the same in twenty years?" That would be the basics of the wedge.

Most people don't have a clue what they need now much or less in twenty years from now, I'm marketing to people in their late thirties and mid forties for the most part. Now I if possible go into the review, say their children (no more coming) are 8 and 12 years old, obviously in ten years the children will have grown up for the most part and the need of carrying protection for them is passed. Now we look at the house debt, are they planning on having the house paid off or even in the same house and not a smaller house? Employment position, will they be more secured with larger savings to leave behind for their spouse in case of disaster? The list continues and goes on and on.

 

[Winter_123]

I believe in most cases I can replace existing policy which generally speaking is a 20 or 30 year term loaded with ryders not needed and replace that with a 1,5 or 10 year policy even using Mass Mutual (most expensive?) contracts cheaper then they have now (esp if we are talking the likes of a Home Certain product from OMG) and once I throw in a small FE Policy the amount is insignificant.


Man, I am just not on board with this strategy at all. You are showing the clients a less expensive policy by moving them over to a lesser level of coverage, drastically less. Then your plan over the next few years is to bump them back up a longer term product. The whole idea is that we dont know when we are going to die or health issues set in. That is one of the basics of insurance. You get a guy with a wife and two kids and a 20 year policy and you bump him down to some one or five year starter product. Then his prostate goes through the roof or he has a heart attack and he lives but is uninsurable when his hit and run policy expires. Do these one and five year term policies have guaranteed conversion? If so, I will adjust my thinking.

Also, if the client has a policy that has expensive riders that are now perceived as being not needed then they can just drop the riders can't they?

If the client got a 30 term, for example, and it is an expensive Home Certain then just give him a better quote from Genworth or West Coast or whatever and have him take the paramed. Then you are doing a replacement and leaving him better off.

Maybe I just need to be educated a bit about these one and five year term policies and I will change my view after that but replacement of an existing policy is a legal and ethical minefield and I would need to know a little more than what I have heard so far.

Winter

 

[James]

I believe in most cases I can replace existing policy which generally speaking is a 20 or 30 year term loaded with ryders not needed and replace that with a 1,5 or 10 year policy even using Mass Mutual (most expensive?) contracts cheaper then they have now (esp if we are talking the likes of a Home Certain product from OMG) and once I throw in a small FE Policy the amount is insignificant.


Man, I am just not on board with this strategy at all. You are showing the clients a less expensive policy by moving them over to a lesser level of coverage, drastically less. Then your plan over the next few years is to bump them back up a longer term product. The whole idea is that we dont know when we are going to die or health issues set in. That is one of the basics of insurance. You get a guy with a wife and two kids and a 20 year policy and you bump him down to some one or five year starter product. Then his prostate goes through the roof or he has a heart attack and he lives but is uninsurable when his hit and run policy expires. Do these one and five year term policies have guaranteed conversion? If so, I will adjust my thinking.

Also, if the client has a policy that has expensive riders that are now perceived as being not needed then they can just drop the riders can't they?

If the client got a 30 term, for example, and it is an expensive Home Certain then just give him a better quote from Genworth or West Coast or whatever and have him take the paramed. Then you are doing a replacement and leaving him better off.

Maybe I just need to be educated a bit about these one and five year term policies and I will change my view after that but replacement of an existing policy is a legal and ethical minefield and I would need to know a little more than what I have heard so far.

Winter

Not only does the Mass Mutual being Convertable but also guarantee Renewable. In other words at the end of the period of term if you want to continue with the contract as is you simply keep paying your yearly premium which will go up or you can convert to a WL. Now this does take a greater Service aspect to the strategy, yet I don't know of anyone saying there is too much service in general today. Lets face it, in todays MP field that pushes as you mention "Home Certain", ART is a foul word, ART stands for "Annual Renewable Term", plus in most cases surely Convertable. I do agree before you sell anything you should know and understand the language of the Contract.

 

[Winter_123]

[Now this does take a greater Service aspect to the strategy, yet I don't know of anyone saying there is too much service in general today.

I don't like it. It requires more service because there is a lot of churning going on for the purpose of building rapport or side sales with the client. I agree that if they are are in a high mortgage product then there could be opportunities to get them out into a better product with underwriting. But if the clients are in good health, not too old, and can afford a reasonable premium then there is no better time to look out over the horizon as to what there insurance needs might be and get them into as good a plan as they will accept regardless of whether that is term or whole life or universal life. It will never be more affordable, particularly if they are already paying that level of premium for a mortgage product. Moving them down from a 20 or 30 year product and then racheting them up over the years as their 1 or 5 year term expires and trying to sell final expense in the middle of this is too convulated, risky, and expensive over the long haul. It is a strategy that serves the agent better than the client. It is nothing that I would want for a family member or that would make much sense if you take the commissions out of the picture. There could I suppose be a client here or there where it would make sense but that would be based on a highly specific scenario versus an agent using it as a business strategy. We can talk about policies being guaranteed renewable at the end of a term but people aren't younger at the end of those terms.

Winter

 

[James]

I'm not too sure what you mean about Churning, I simply don't see it that way at all.

1. The amount of coverage is in flux, depending upon the age of the client it will go up or down. More then likely a person in their late 30's or early 40's will generally need less insurance in 10 years and very little in 20 years. The whole idea of the final expense or a Blend such as WL/Term portion is only to identify the needed coverage for life, may that be 25 grand or 100 grand or more. The term period is what is really being discussed, I don't see how commissions are higher with the 5 year plan then looking to reduce that amount as time goes on, rarely does the need go up. Basically the Commissions are higher on the 20 to 30 year policies so please don't suggest something that just isn't factual and then attempt to use it as a sword of unethical practice charge based on commissions, I really can't see how that makes any sense at all. Obviously the shorter the duration of the contract less the Carrier can afford to offer in commissions.

2. Life insurance today is cheap, likely to be more so as time goes on if the general trends keep going they way they are. Now also understand that the need of Life Insurance is basically secondary to other needs such as DI, person of the age I'm discussing that seeks LI will by odds face the need of a good DI policy far more then that of a Life Policy. Once again, I don't believe anyone can sit down in one or two meets and plot out a succesful Insurance Plan that encompasses all the needs. Unless you know of a good idea on how to sell, Life-DI-LTC all in one sit and have a succesful sale asking for that check please share it. Of course one can offer up these new All-In-One products but they leave holes, I like them yet even so they will never replace solid coverage offered by having stand alone coverage for the Big Three.