by Kenneth A. Shapiro
Life insurance producers face each New Year intending to make it the best one yet — a banner year. But as we all know, it takes more than even the best intentions to be successful in our business. Even though there is an abundance of good advice on how to pump-up production, all too frequently, the results at year’s end are below expectations. My job includes getting acquainted with producers and following their careers. It’s abundantly clear that the most successful focus on a few issues. I call it, “a life insurance producer’s four-point plan of success.” It may be helpful in the year ahead.
1. Demonstrate the Value of Life Insurance as an Asset Class
With term life products accounting for 80% of all life policies sold, it seems fair to conclude too many of us are order takers. We’re not selling the concept of life insurance as an asset class. As you know, a life insurance policy is also an asset, providing non-correlated returns, liquidity and tax advantages.
While some might consider the premiums an expense, life insurance is an asset that will provide cash, as promised under the contract at death to designated beneficiaries. The amount paid by the insurance company at death will not be affected by market conditions. While this isn’t a new idea to producers, it can be big news to consumers, including those who already own life insurance plans.
All that most consumers seem to know about life insurance is that they must die before there’s a payout, which may help explain why what we sell has so little appeal.
We talk too much about life insurance policies and not enough about life insurance as an asset with an Internal Rate of Return (IRR) generating guaranteed tax-free income, a statement no other investment can make. Since IRR can be applied to any asset class, it’s an easy and straightforward way to show clients why permanent life insurance is a sound choice.
2. Give Clients What They Want
Even though it’s sometimes easy to think otherwise, clients usually know what they want. They may not be adept at expressing themselves or feel reserved about speaking up, but they still have a picture in their minds of what they want.
More often than not, the image they have in mind is a comfortable, enjoyable lifestyle they can count on over the years. What goes with it is having the financial resources so they can educate their kids, have an adequate retirement, and afford some type of long-term care if they need it. Although it may seem otherwise at times, most people have a sensible outlook on their lives, their expectations, and the future.
Today, no one is better equipped to give clients what they want, to help them reach their objective than the life insurance producer. No one. Today’s life insurance programs are more flexible than ever.
We can customize life policies with any of a growing number of riders to meet specific client objectives. It may surprise many consumers that they don’t need to die to take advantage of the benefits of a life insurance policy, or, as we say, living benefits.
Today’s clients are more concerned with outliving a retirement plan than they are death. With increased longevity and life expectancy, their concerns are well founded, and with 10,000 people turning 65 every day and seven out of 10 will have a chronic illnesses. This is why living benefits have so much value to consumers. We all know adults who care for an aged parent. These products provide solutions that help meet these challenges. The flexibility doesn’t stop with policy riders. It goes further with the ability to trade in a policy for a model that better fits current needs. And because a life policy can have value, they can, if necessary, sell it.
3. Be Of Service
Since life insurance producers think of themselves as salespeople, this is also their public image; it’s the way most people think of them. This is one reason why it’s difficult for producers to get prospects to listen to their story, agree to an appointment (and then keep it), or provide referrals that have value. Life producers aren’t alone. Even though we often claim to be different, other businesses and professions face the same obstacles. Salespeople in other fields have had the foresight to overcome their obstacles by offering their customers a high level of service that fosters satisfaction, builds loyalty, and establishes beneficial relationships. The attitude of making the sale and moving on must change if life producers want to be successful. Frankly, the customer service experience for producers is simple — there’s nothing complicated about it. Even though it’s largely ignored, the single tool most effective in building client rapport, confidence, and continuing business is the largely ignored annual policy review.
Producers complain because they don’t have enough leads and that the phone never rings. All this suggests that we have a lot of time on our hands. Why not put it to good use doing policy reviews? Lifestyles change, health changes, obligations change, goals change, and the policy review is the way to determine the appropriateness of a client’s current life insurance program, where it may not measure up, and what is needed to get it into sync with their current situation and future objectives. The key to sales is customer service.
4. Getting Past the Pleasantries
We all think about our lives and the way we would like them to progress, to unfold. But, more often than not, we don’t have the answers for what it will take to make this happen. As most producers know, prospects will open up if they have the opportunity. When we go to the doctor, we don’t spend time talking about a recent vacation, an upcoming sports event or shooting the breeze about our kids. Yet, our meetings with prospects often start that way. It may only distract us from using the time to learn what the issues that concern clients and having the opportunity to share possible solutions with them.
As most every producer has learned, prospects will open up if we let them. And that’s every producer’s job — to clear the way so prospects can talk about what’s most important to them. When this happens, producers know how much prospects appreciated the opportunity. When meeting with prospects, it’s time to get down to business. Becoming successful requires a plan, one that helps a producer stay on track for writing more of the right kind of business.
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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 kshapiro@faiu.com.