What is the psychology behind final expense??

[jody108]

Okay, I see some buzz on final expense ... what is the angle for selling this? The small face value and the high premiums ... I'm trying to wrap my mind around it and if it's really in demand? I'm interested in selling it .. but need some more information on how to sell it ... what is a good company to be appointed with?

 

[Bob_The_Insurance_Guy]

Marginally insurable individuals, who have never thought about life insurance, and still don't, but want enough money to put them in the ground, without having to "pass the plate" at church to pay for the funeral.

Am I off base on that?

 

[jody108]

lol

 

[Mark]

Okay, I see some buzz on final expense ... what is the angle for selling this? The small face value and the high premiums ... I'm trying to wrap my mind around it and if it's really in demand? I'm interested in selling it .. but need some more information on how to sell it ... what is a good company to be appointed with?

I'm going to give you my short answer.

The older you get, the more you think about death and dying. Sure you house may be paid off, and the kids are gone, but no matter what, you will still die and someone will pay for your funeral. You can either stick someone you love with the bill, or show them you love them and take care of your own bill.

Now because you have waited until you are old to buy life insurance, it going to cost more then what it does on younger people and you have more health problems now I bet.

By the way, not all F.E. policies are small. You just at least need $5,000 to $10,000. There are ways of increasing the amount.

I have a couple of companies that I personally use that I love. You can also visit my website or call me and I will help you. I can also go over how to prospect to this market.

 

[HomeService]

As a person who has basically sold final expense for 20 years, I will tell you what I know. And, I would rather sell it than term, so I'm biased. By the way, I may be more inclined to call it "whole life" or "straight life"... or "real life insurance"...

Now, to understand my thoughts on final expense, we need to understand where I've been in my life, what kind of households I go to , and why this is a good market { for me}.

I was a debit agent, for years, all we sold was 5-10K policies. { Well, we sold a few bigger ones, but our bread and butter was the 5, 10, 15K policies. } I remember this certain whole life we sold, my boss used to get all excited because it went clear up to 15K, and that blows away the competition, who sells up to max 10K. We mainly knocked doors in middle class neighborhoods. I still have whole life contracts with companies where I can sell to any age, 0-85.

Now, let us understand why it's called, "final expense", which I think is basically wrong on a few levels.
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OK, if an agent were to do a needs analysis, for life insurance, a real one, with a client, there would be a space on the form for "final expense". Funeral costs, basically. There is also a space for "mortgage payoff". Amongst other spaces. The agent fills out the form with the client, figures out they need "X" amount of life insurance, for things like final expense and mortgage payoff, paying credit cards off, debts, maybe an education fund for the kids, maybe the client owns a business that needs funds, a fund for the spouse to live on, unpaid medical bills, so on. Maybe the client has a 100K policy already, but maybe the client needs 250K, so a need is demonstrated for another 150K policy. This is standard practice. Maybe the client needs 500K, then there is a need for 400K, there. You see, it's a basic needs analysis.

So, the "final expense" portion on the form for the needs analysis, and the "mortgage payoff" portion.... are just two lines on there, amongst other line items. So, to concentrate on only mortgage protection, or only final expense, as a practice, never made sense to me, if an agent wanted to be a complete life agent who did a good job. To concentrate on one item seems like the agent is missing out on other needs.

However, I think the life insurance marketers have created these job titles: "mortgage protection agents" and "final expense agents", to simplify recruiting and training. You can really quickly get ten guys out there running around selling FE or MP , and they are easily trained and they have a narrow focus and it's just plain easier.

So, now we must explain the difference between what I do and what they do...
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OK, to make this long winded response just a little longer: in order for me to sell life insurance, which some call "final expense".. I must go out and find these people. A lot of times that means knocking doors. I find that young moms are receptive to this. Usually this is in middle class- or lower- neighborhoods. I don't knock doors in the wealthy neighborhoods. I then make sure I have smaller whole life products, like 10K or 15K, and make sure they are issue age 0-85. I also make sure they have little or no health questions, or get a graded product to take out there. I also sell "family" plans- which means mom and kids. Sometimes, each kid gets their own policy, hence, the 0-85 thing again.

This is all because, the market I have chosen : they are more receptive to whole life. They are "used to it". They like to build a cash value. Dave Ramsey and others who hammer whole life- are simply not in this market. They do not understand it. Dave is correct: for a wealthy person or an upper middle class person, that term makes sense.

Now, do I knock doors from time to time and get a senior? You bet. Do I get a referral that's a senior? You bet. The seniors often have very little exposure, except for the final expenses. That's why the 0-85 age thing. But I do not solely focus on seniors for "final expense", however they are in my entire scope of the whole demographic of my market. When the seniors come up from time to time, whole life makes sense, because of the relatively easy underwriting and the small cash value they are building. They grew up with whole life, and are accustomed to it.

If I were to get an upper middle class person or a business owner, I may do a needs analysis and suggest term. For my primary market, it's easy issue whole life. To each his own on what market they prefer: but I think catagorizing "final expense" and "mortgage" and so on.. leaves a little bit to be desired, for me. Just my opinion.

 

[360]

So you have been cold door knocking for 20 years?

 

[HomeService]

I have been working at this method off and on in insurance-since 1986. Yes.

At one time I decided to be a courier delivery driver and I kept right on cold calling to get customers- I even owned my own courier business and I built it up by word of mouth and cold calls on businesses. I developed a method for the courier company that helped get me past the "gatekeeper" in the business, and directly in contact with the decision maker, who was/is the shipping person. It basically entailed me going to the back shipping dock rather than dealing with the receptionist, whenever I could employ this. On the real small one and two person businesses, the owner may be right there at all times, so he or she is the shipping person, or right near that department.

It works with insurance, the cold calling- business to business. I've done it with health insurance- most small businesses- the people really wish to talk health insurance. Most young moms in neighborhoods -are receptive to life insurance.

 

[360]

Home...enjoyed most of your post, however I interpreted the question a little differently. It's not about creating "job titles", it's about creating targeted marketing pieces that generate a positive response. It's not about "selling final expense" or "selling mortgage protection", it's about selling life insurance to people who responded to those marketing pieces.

It would be great if could send out a mail piece that said "would you like a free needs analysis"...sure they'll mail that back right after the root canal. The industry has done a horrible job in educating folks about what they need and when. When is the last time you saw a story done on network TV about how Joe Blow died, left his wife and three kids penniless and that little did the family know it would have only taken $27 per month to replace his entire salary forever.

I for one am proud of any marketing that gets me in front of anyone that wants to protect their family, whether it relates to final expense, mortgage protection, living wills, or any niche market.

B2B door to door for underage health I get...residential door to door or 5-10k in whole life in the hood I just can't see as a viable long term strategy, not that some valuable experience could not be gained though as it would sure make a person value the well crafted marketing piece.

 

[somarco]

$10k might pay most of the final expenses but what does it matter if they are evicted from their home in a few months because they can't pay the mortgage?

Don't get me wrong. There is a place for FE products. But there is also an argument for doing what is right by the family.

 

[360]

$10k might pay most of the final expenses but what does it matter if they are evicted from their home in a few months because they can't pay the mortgage?

Don't get me wrong. There is a place for FE products. But there is also an argument for doing what is right by the family.

I don't see where you're going with this one? I'm not grasping the relationship between buying a 10k whole life policy and losing a house?