I have an opinion on selling final expense by phone. I speak with agents every single week that have been ripped off by "final expense telesales" organizations where they require $1,200 up front to sell through them with a "Vice President's level contract at a whopping 85%!!!", or some such non-sense. My website brings in lots of folks that have tried and failed at doing final expense over the phone as their sole course of business.
Last year, I very wise person on the forums told me that cross-selling final expense AFTER solidifying a relationship based on a Medicare supplement transaction is MUCH better than doing final expense as your mainstay. Now, a year later, I wholeheartedly agree. My persistency with final expense policies went from the 80% range over the telephone to now in the high 90's. Why? Because the final expense sale is now an additional sale to a Med. supp sale first.
I know, most agents are scared to get involved in med supps and see that the first year commission on them is lower than the typical final expense policy. What these agents fail to realize is that all of the Med Supp plans are standardized - the same with each company - so they're easy, and the clients are raving fans when you SAVE them money, a.k.a. put money back into their household instead of calling them to take more from them.
A relationship with a typical final expense client means you're having a conversation with a lower income person over the telephone. You rely on this single conversation to entice them to purchase a final expense policy. They don't know you and you don't know them. They tell you they have the money for it today. Many will cancel because of a variety of reasons, not the least of which is the fact that in your one and only telephone call, they made an emotional decision that is not supported over the long term with justifiable facts to support them seeing that $50 deduction from their bank account, which is usually skimming the bottom from the very beginning.
Contrast that with the Med Supp client that you saved $100 per month in their household, they are in the $30,000 - $100,000 retirement income range and they're online with a computer and everything! They have seen you on their computer screen, watched as you walked them through a quick and easy enrollment, and they now have solid faith and trust because you have delivered to them the same thing they had before, but at a much better price. You have proposed using some of that SAVINGS toward a whole life policy that can also, easily be doing through the phone - even using the screen share they have become accustomed to and enjoy.
There is no hesitation when you uncover a need with an add-on sale with this client. Also, when properly nurtured through follow-up, THIS type of client will refer LOTS of people to you - because you have first provided value to them before asking for any "sale".
This is why the persistency on these cases is nearly perfect. It's why you will be trust like you never could do with the single-conversation with the ultra-low income person you call on the telephone to sell life insurance to.
Oh, and if you're selling one of the high priced plans as a regular course of business, via phone (LH, SL, BL), etc. you must add another factor to your struggling persistency. That is, your rates are much higher than the most popular plans out there today (Foresters, RNA, Oxford, Settlers) and you are likely to get the policy replaced when someone shows up at their door or they return another card asking for information on comparison shopping. If you had a solid relationship with this person over multiple lines of business, you would likely be safe, but absent that additional line relationship, it's all about a single transaction that's up for scrutiny at the next possible opportunity.
Either through the lack of a value-added relationship in addition to the single transaction, or because you sold her one of the mainstays in the over-the-phone market, you're more likely to be replaced than had you provided value FIRST.
Incidentally, Medicare supplement commission is not that shabby - six (or 7) full years of commission adds up. So take that first year commission that usually doesn't look very attractive compared to a final expense commission, then multiply it by six years and you'll see the true value of that new relationship. The referrals from Med Supp clients are 100 times better than those ever obtained by a life insurance-only relationship. I made a little video on this at www.myunlimitedleads.com
This is one man's opinion
, based on the wisdom given to me by others (on here) and my experience. I'd be glad to help you with selling final expense by phone, but it's best if you get started on the right footing instead of thinking you'll make $100,000 per year strictly calling low income seniors and strictly selling final expense.
Originally Posted by matilda654
So any suggestions for me. I talked to a mgr that wants me to sell FE for Baltimore Life over the phone. I will pay $370 for 1000 mail drop leads and they will pay 100% commission, but the renewals will only pay me 7% for the first couple of years and then 2% for the next 2-3 years and then no renewal commission after that. Any advice on this?