Lost my 3 Biggest Cases this Week

[paulmatthewm]

Sounds to me like you're doing a great job. You will be way ahead of the curve when you decide to go independent. You may have "humbled" yourself and sold your friend a policy, but if he bought wl, and he's close to your age, you may have done him a big favor.

Yes, I completely agree with you. I was looking at the policy earlier and thought to myself "Wow he is really going to be happy with me in 10-15 years when he realizes he has an extra $7-10k in cash that he forgot about.

Whole life is an awesome product. Just put it on EFT and let it do its thing.

----------

Do they have PRIVATE funded school loans? Who else will be required to pay on those loans if something happens to them? Those loans are not forgiven at death, and are not discharged in bankruptcy. That person... is your prospect. They might only need or want a 10-year term, but that would be a good reason to buy such coverage. Otherwise, single people aren't your BEST prospects.

This is very interesting. I had no idea private student loans were not forgiven at death. Definitely a huge market for that among people I know. Thanks for the tip, DHK.

 

[DHK]

There are lots of real life examples. Here's an article:
Lenders Refuse to Forgive Dead Woman's $200K Student Loan Debt

 

[Lakshmi]

I didn't read the whole thread, but it definitely happens to us all.

Had a guy a month or two ago cut a check for two policies, AN ANNUAL CHECK, for a company I intentionally set myself up on only a 6 month advance, and I did get the commission paid, then his check bounced. Then, he never answered the phone so I could figure out why or what happened.

Crazy business we are in, just have to understand that will happen from time to time, thank god that's something that hasn't happened in years.

What upset me the most was the hit I took on my very high retention rates. Ugh..SMH. Fortunately, since that doesn't happen often, it wasn't that bad. and I had plenty enough already going through that covered the loss, minus the 3 hours drive and homework I put in on it.

 

[me112233]

I am devastated. I started in this industry last November and have written about 50 applications since then. 3 of them were large policies with monthly premiums at $1k, $500 and $300. They were all 10 pay WL. 2 of the guys were rated terribly and they didn't want anything to do with it. I tried telling them that this is when they need it most but they weren't interested, and the 3rd guy changed his mind and wasn't open to hearing any other options. I am a captive agent and I was counting on getting those commissions next month. I mean this is brutal and all the bad news happened in one week. I thought I was off to a good start but now I am seriously wondering if I belong in this job. Just looking to share my story and maybe get some input. Thanks.

Two things.

(1) Welcome to the real world. Making 50 life sales in your first five months in business is pretty good. Sometimes, even the seemingly "safe" sales go south sometimes. Your's just showed up all at once.

(2) Why are you selling 10-pay life? It already has a jacked up premium. And any time you ask someone to spend $1,000 a month on a life insurance policy, that sale is going to be shaky. There is a market, but it is a very small one; namely, high-earning professionals with lots of spare cash to drop; but even those folks are often opting for cheap term policies. The magic number on premium is around $60/month. Get much higher than that, and a quick lapse may be around the corner. It's a combination of affordability and psychology. The smaller the premium, the less likely someone is going to decide "that's just too much money." You obviously know how to get policies sold, I'm not trying to discourage you, just passing along my observations over 30 years of selling insurance.

 

[WinoBlues]

Two things.

(1) Welcome to the real world. Making 50 life sales in your first five months in business is pretty good. Sometimes, even the seemingly "safe" sales go south sometimes. Your's just showed up all at once.

(2) Why are you selling 10-pay life? It already has a jacked up premium. And any time you ask someone to spend $1,000 a month on a life insurance policy, that sale is going to be shaky. There is a market, but it is a very small one; namely, high-earning professionals with lots of spare cash to drop; but even those folks are often opting for cheap term policies. The magic number on premium is around $60/month. Get much higher than that, and a quick lapse may be around the corner. It's a combination of affordability and psychology. The smaller the premium, the less likely someone is going to decide "that's just too much money." You obviously know how to get policies sold, I'm not trying to discourage you, just passing along my observations over 30 years of selling insurance.

$60. seems a little lite. You are either selling small policies to young people or small FE policies to young old people. Or maybe a volume internet term agent. But that even seems lite for that. A 20 year $500,000 term plan on a Standard 45 year old is +- $100.mo. $250,000 GUL is +- $200, Pfd is +- 160. area.

The higher the premium the better the persistence for me. Especially on younger traditional business.

Just my two cents.

Lee

 

[1963]

Hey Paul, welcome to our world! Congrats on the defaults, that's part of our "game" as professional agents. Yeah, losing that much premium at one time could have been devastating for an average newcomer, but "average" agents don't write 50 apps in a 4-month span like you did! So you lost three; you probably didn't lose much in the long run if you continue to produce at the level you have so far. You learned the value of keeping your foot on the pedal; don't count your money, just keep doing what made money for you. Sounds like a little prospecting and some referrals paid off, and they will continue to pay! Chalk your losses up to experience and remember what happened. Also, read the signs; 10-pay WL to guys with bad ratings was not a match made in heaven. Some sales are better left alone.
Keep up the good work! You ARE off to a good start, and you CAN succeed in this profession! I wish you well!

 

[AlTheGud1sRtakn]

Why are you selling 10-pay life? It already has a jacked up premium. And any time you ask someone to spend $1,000 a month on a life insurance policy, that sale is going to be shaky. There is a market, but it is a very small one; namely, high-earning professionals with lots of spare cash to drop; but even those folks are often opting for cheap term policies. The magic number on premium is around $60/month. Get much higher than that, and a quick lapse may be around the corner. It's a combination of affordability and psychology. The smaller the premium, the less likely someone is going to decide "that's just too much money." You obviously know how to get policies sold, I'm not trying to discourage you, just passing along my observations over 30 years of selling insurance.

I disagree with your second point.

Monthly premium should reflect the cost of the insurance that the client needs and fit the client's budget, not hover around an average price. $60/month is high for some of my younger clients, average for my FE clients, and low for many of my other clients.

Limited pay policies are my favorite type of WL policies, especially if they're participating.

 

[me112233]

$60. seems a little lite. You are either selling small policies to young people or small FE policies to young old people. Or maybe a volume internet term agent. But that even seems lite for that. A 20 year $500,000 term plan on a Standard 45 year old is +- $100.mo. $250,000 GUL is +- $200, Pfd is +- 160. area.

The higher the premium the better the persistence for me. Especially on younger traditional business.

Just my two cents.

Lee

I sell to the tightwad market . . . OK, the final expense market is most of my individual sales (I have over 100,000 people insured via true-group life plans). The handful of $100+/month individual plans I sell are to business owners with good cash flow. I live in rural Kentucky, and the mindset of so many people when it comes to life insurance is "enough to bury me." Trying to explain to Joe Sixpack that his wife/kids need a $400,000 policy (plus SS benefits) to continue life at the same level get's nothing but a dazed stare, eventually followed up with some derivative of "I ain't going to give her all that money to have fun with . . . what does a $25,000 policy cost?"

The $60 figure is merely a number that seems to be the tipping point for long-term policy persistency. With term, persistency isn't really something I care much about, given that there are no renewals.

Your illustration of the "standard" rate policy reminds me of the classical problem. Smokers spend a sizable chunk of money on cigarettes, which in turn jacks up their life insurance rates. They don't see how to "afford" the higher insurance premium that smokers have to pay (because they spend $100+ a month on cigarettes), then have a dose of denial that it is possible for them to die any time before turning 85, so they either opt for the $25,000 whole life policy (to cover the funeral bill when they die at age 86), or they refuse to buy anything at all. I haven't sold a smoker term policy in over 10 years . . . it seems to be either non-smoker term policies of $250,000+ or final-expense size whole life policies.

----------

I disagree with your second point.

Monthly premium should reflect the cost of the insurance that the client needs and fit the client's budget, not hover around an average price. $60/month is high for some of my younger clients, average for my FE clients, and low for many of my other clients.

Limited pay policies are my favorite type of WL policies, especially if they're participating.

I wasn't attempting to suggest that all policies should be based on a target premium of $60. Rather, I was attempting to point out that risk of lapse is much higher with higher-premium policies. The folks get into a financial jam (pick a reason), and that $92/month life insurance policy seems to be an easy thing to let go. I've never seen a $1,000/month life policy that I would buy for myself (unless maybe I was getting the commission on that sale, too.) I don't deny that somewhere out there that $1000/month is what it takes to get the "right" coverage for a given individual; I'll just say it isn't a market that I find myself working in.

 

[DHK]

The larger the premium, the more the policy focus is more about the BENEFITS within the insurance contract and not about the INSURANCE itself.

If someone could take care of their 'need' for $500,000 by paying $500/year or $10,000/year... who in their right mind would pay an additional $9,500?

Once you can answer that, you can help people WANT to "overpay" for their insurance.

 

[WinoBlues]

I sell to the tightwad market . . . OK, the final expense market is most of my individual sales (I have over 100,000 people insured via true-group life plans). The handful of $100+/month individual plans I sell are to business owners with good cash flow. I live in rural Kentucky, and the mindset of so many people when it comes to life insurance is "enough to bury me." Trying to explain to Joe Sixpack that his wife/kids need a $400,000 policy (plus SS benefits) to continue life at the same level get's nothing but a dazed stare, eventually followed up with some derivative of "I ain't going to give her all that money to have fun with . . . what does a $25,000 policy cost?"

The $60 figure is merely a number that seems to be the tipping point for long-term policy persistency. With term, persistency isn't really something I care much about, given that there are no renewals.

Your illustration of the "standard" rate policy reminds me of the classical problem. Smokers spend a sizable chunk of money on cigarettes, which in turn jacks up their life insurance rates. They don't see how to "afford" the higher insurance premium that smokers have to pay (because they spend $100+ a month on cigarettes), then have a dose of denial that it is possible for them to die any time before turning 85, so they either opt for the $25,000 whole life policy (to cover the funeral bill when they die at age 86), or they refuse to buy anything at all. I haven't sold a smoker term policy in over 10 years . . . it seems to be either non-smoker term policies of $250,000+ or final-expense size whole life policies.

Area makes a difference, that is for sure. What you are saying makes sense in context. I do not really keep track other than I may look a a particular company and just divided my AP by number of lives. I really do not add them to together. all I care about is how much gets deposited. Same with how much this Big Dog vs that Big Dog makes. If they are not cutting me off a little chunk, I do not care what they make.

Funny thing on the smoker thing. Those numbers I posted were all non smoker. I run into many more non smokers here than smokers. Even in the lower income areas. Chewer/spitters are one every year or two. Of the eight F2F apps I did last week two are smokers. Different areas have different challenges.