If life insurance advisors have a common complaint, it’s never having enough sales leads, enough people to talk to, or enough business opportunities. Whether someone is new to the business or has been in it for 30 years, their complaint is always the same: “I need more people to talk to.”
While new leads are critical to an agent’s success, many agents miss sales opportunities that are so close they never see them. Capturing these potential sources of income can transform a good year into a great one. Here are six of them with high potential.
1. The appeal of linked benefits
A client is interested in long-term care insurance and you come back with premium that almost sends the person into cardiac arrest. The price is shocking, way more than the prospect expected or can afford, and who, disappointed, writes it off and you write off the sale.
Not necessarily. Here’s where a linked benefit, a long-term care rider in this case, can get the coverage the client wants at an affordable price and you make the sale. It’s an example of clients getting more than they ask for — whether it’s term life or permanent insurance, they have a death benefit plus the opportunity to access the face amount for long-term care.
Clients embrace linked benefits because they add value by offering living benefits at a modest increase in cost.
2. Broader opportunities for legacy planning
Most people dream about “leaving something” to family members or a particular charity, but it never materializes and remains only a fantasy. As a result, they don’t really think seriously about how to do it. To do so is a waste of time and probably depressing.
It’s also another missed opportunity because many middle-class Americans can leave far more than they dare to dream about. They not only can feel good about what they can do, but they can feel good about themselves for doing it.
The advisor’s task is to show clients how what seems impossible is actually affordable and achievable. With the right life policy, many are surprised and pleased to know they can create a legacy that fits their financial situation.
3. Life insurance as an asset class changes the game
As long as we allow others to put the purchase of life insurance in the “expense column,” we aren’t doing our job. Anyone managing a client’s assets needs to recognize life insurance policies are assets in a portfolio. While this isn’t a new idea, it’s an important one for both consumers and life advisors.
A properly designed life insurance policy not only has a 100% guaranteed payoff, but it also has current value, something most consumers don’t understand. In other words, it’s an assetwith cash value that, if necessary, they can access.
But, most importantly, many prospects are in the dark about the attractive Internal Rate of Return of life insurance policies. Think about it, deduct the taxes and expenses and what do you have? A rate of return after taxes and expenses “north of 5%.” That’s hard to match with most other conservative investments. And, if this isn’t enough to prove that life insurance is an asset, policies can be sold if they’re no longer needed.
It’s a powerful story that clients need to hear. We need to let them know that purchasing life insurance is not only a sound investment, but it’s an prudent way to diversify their portfolio.
• More from Kenneth Shapiro: A life insurance producer’s 4-point plan of success
4. The transformative power of electronics
While a company such as Amazon has put customer expectations on a super-fast track, the life insurance industry has been slow paced, to say the least. As advisors know so well, it can take weeks — and often longer — to get policies issued.
But not now. Today’s electronic platforms take an app through processing, approval, and delivery from weeks to a couple of hours. It’s not an exaggeration because we do it every day.
Using electronic platforms is not just another way to do business; it’s the only way, particularly if an advisor want to serve the needs of the 79 million Millennials that encompass the largest single group of consumers. They expect convenience and ease in doing business. No nonsense; just get it done now.
It’s also the way to get ahead of the competition, to serve more clients, and get paid faster.
5. The sales power of simplified issue programs
Predictive modeling, the process that draws upon both traditional insurance data and non-traditional sources for making underwriting decisions, has resulted in simplified issue products that require answers to a few health-related questions and no physical exam. On top of that, predictive modeling underwriting is faster and more thorough.
This is one of the most dramatic changes in the life insurance industry over the last decade. In that time, simplified issue has gone from offering policies with low face amounts to robust options up to $1 million.
Even though premiums may be slightly higher, such simplicity and speed are appealing to a growing number of consumers.
6. The cheapest term life policy may not always be in a client’s best interest
Buying decisions are generally based on what customers know. The less they know about the options, the more they tend to base buying decisions on price, and price alone. Getting the lowest price can make sense. But, such a decision can change if the customer knows more.
Term life insurance is a case in point. Most consumers don’t know much, if anything, about life insurance, including term products. This is why the two words that come to mind regarding term life are these: “It’s cheap.” But it doesn’t stop there as the reasoning goes. If cheap is good, cheapest is best.
Advisors can easily fall in the trap of thinking like consumers by coming up with the lowest possible price to close sales quickly — another missed opportunity.
Consider these questions: Does the lowest price leave customers with good options to convert a term policy? And, how might they benefit if they paid a few dollars more?When thinking like an advisor — rather than like a customer — life agents can win more business by educating clients and giving them options so they can make informed decisions.
Rather than focusing so much attention on finding more new leads, life agents can be better served by looking more carefully at the opportunities they may have missed.
• More from Kenneth Shapiro: A life insurance producer’s 4-point plan of success
Kenneth A. Shapiro is President of First American Insurance Underwriters, Inc., a Needham, MA-based national life brokerage firm specializing in coaching growth-oriented producers and providing them solutions to their complex cases. He can be contacted at [email protected].
