If you want to attempt to sell Life Insrurance online or sell it as a commodity I seriously doubt this will help all that much, well it won't help at all! I'm a firm believer that [COLOR=red]Life Insurance is sold not brought[/COLOR], so I really don't think slapping up a website and than expecting people to click on thru to your sign up page and fill out all information and than buy is so unlikely and bizarre I'm not sure if I would want those kind of clients. Well, can you even call them clients, barnes and nobles I believe calls them online customers. So exactly what is the difference between a customer and a client, we use the word "Client" meaning someone that is on list of people we service, we have to be active as in a customer simply decides to walk in and help themselves. I don't think most people could possibly help themselves to Insurance Products, in fact one of the main reasons people give for being underinsured or not insured is that they don't have a clue about the process or who to talk too!
Depending upon what you want to sell, Life, LTCi, DI (the other half of Health Insurance) or what have you, you'll do best if you understand the people that you are selling too. In fact I think as far as marketing and selling a specific service as many suggest, it is just as important to attack a specific market. Which is the great thing about life, while most have small policies via work no one and they seem to know this has anything close to a solid Life Insurance plan via work unlike health insurance. So the market you can market too is just that much larger. Depending upon what you decide to sell you'll also recieve Residual income likely larger than most health sales could ever pay, plus you have the ability to continue to build the insurance foundation of every client thru out their and your lifetime. All, all people need Life may that be Term, WL or UL or a mix of them. Than you have DI, the other half of health insurance, I'll never understand why people that sell Health do not aggresively sell DI as a way to fund their Health Policy they sold if the client falls injured or sick and can not earn the income it takes to pay their health premiums? Than you have LTCi, a crucial element and that product just grows to be more important as your client ages.
The basic elements of getting "Ink on Paper, we all know that you have to prospect, than you sell the product. Yet most forget about the service end of the business! I would think the best thing you can do for your client and yourself is too give a complete "Service". Such as if you actually get them to agree to buy a "Complete Insurance Plan", such as let us say a WL and Term mix, depending upon the size of the WL this sale should be fairly significant but to assure future sales you have to be proactive in your first sale and show the client you mean business! Of course this depends upon what market you are trying too sell to, if you are doing mortgage insurance I doubt you'll be hitting big cases but lets say you market to the Medical Field, Business Owners (Small) you'll likely have a better chance with bigger cases.
Speaking as a relatively new health agent (about 1.5 years into it) I don't sell individual DI because I don't know the 'good' carriers (hardly ever discussed here), I don't know the 'ins' and 'outs' of how DI works, I don't know where to find that info, and finally I assume that most people won't buy because they believe that the state DI plus WC will take care of them... and I don't know if there is any 'money' in it to make it worth my time and effort.
I think that individual DI may be undersold because the carriers do a poor job attracting agents. I've never been contacted by one.
I don't have DI for myself. I don't even know if I would qualify at age 59 and working at home? Doesn't it have to be work related? I assume group DI is?
I sell (group) STD (short term disability) for Colonial... but with them I'm an account "opener" (their official term) and not an "enroller" so I don't have to know anything more than "Yes Ms. Benefits Manager, we have three excellent STD policies with varying benefits that can cover on and off the job, at very low rates." The enrollers do the rest with the individual employees...after I close the sale to the biz owner.
One last point for what it might be worth. People are 'hit' for health, life, home, auto, travel, and now LTC insurance. There is only so much insurance people can afford. Everyone KNOWS they will die and get sick and get old, but no one KNOWS they will need DI.
I think I posted here a while ago that some enterprising agency or FMO should cobble together a "wrap' policy that includes health, life, DI, and LTC all in one document, one sale, one bill, etc. (Sort of what the California Choice folks have done here with healthcare.) I'm surprised one of the super-nova carriers (Met, MoO, AIG, etc.) have not gotten a hundred or so newly-minted (and overpaid) MBAs in a room and said "OK, come up with a "total protection" product our agents can sell that covers all the major risks... death, accident, health, disability, LTC, and travel. I want it on my desk in six months. What do you think I'm paying you kids $150,000 (each) a year for?"
If someone wrote a text book on "About DI and How To Sell It" I'd buy it.
Good post, James. Thank you. It got me to think about a number of things, especially since I'm working to transition away from health and more toward life, annuities, LTC and maybe now DI.
There are some companies that have bundled life and disability together. I personally prefer the ability to go to different companies for different policies, much more flexability. Disability insurance, IMO, is a very vital risk management tool in anyone's financial plan. I speak from experience, I had a brain tumor a few years ago and was disabled for 13 months, my disability insurance came in very handy. If you ask a family what would happen if the major earner in the family had an illness or accident and they couldn't work, how would they live? Could they afford the mortgage? Could they pay all their bills? Would they be able to save for retirement? Could they pay their medical insurance? Disability coverage is rarely explained and most people if they have it at all is through a group plan that is not portable.
Let's just answer this statement, "[COLOR=navy]I don't know if there is any 'money' in it to make it worth my time and effort" [/COLOR][COLOR=black]there is nothing out there that offers the financial reward including renewals that is offered by the writing of DI. [/COLOR]
I am curious as to why you would sell a combo of term and W/L. Get more DB for the dollar with term, but your then putting money into perm, why?
Most people I know, and the small business owners are included, need long and short term coverage. Basic idea which is more of an abstract than a science to figure out, what amount of insurance is needed for life. First off you have "Final Expense", others will include such things as charitable giving or legacy money. Cheaper to buy insurance for "Legacies" than it is to save and use hard cash, now I know the number crunchers are already trying to figure out if that is true or not, but all things consider I assure you it is. Than of course the short need would include such things as Debt and Replacement issues.
Prospecting business owners with the 5 Way, a lot of people will say this is "Old School" and not effective today, but I say this, just how many business owners have heard the 5 Way today? Yet though you think about it this guy Meisel was a genious, he came up with the 5 Ways one will leave the business;
[COLOR=red]1)Death
2)Disability
3)Retirement
4)Voluntary Sale
5)Bankruptcy
[/COLOR]
[COLOR=red][COLOR=black]If you think about it this list of the 5 ways is quite effective, I know you all knew this, and this guy Meisel was just stating the obvious. Yet though, this is a attention grabber! If you deliver the 5 Way effectively most any owner will think about it, they likely need a moment to think about it and that is exactly what you want. Once again this was thought up by a guy who lived in died by the appointment, as in old school![/COLOR][/COLOR]
Too answer a question of Bankruptcy, it has nothing to do with BOE. Really the only thing an Insurance Policy has to offer is Asset Protection in the regards to Bankruptcy. Now of course the person can not get into a insurance contract after troubles start and expect any BK Judge to honor the protection, so if asset protection is desireable by the Owner he has to set up way ahead of time for the possibility of such protection.
Prospecting business owners with the 5 Way, a lot of people will say this is "Old School" and not effective today, but I say this, just how many business owners have heard the 5 Way today? Yet though you think about it this guy Meisel was a genious, he came up with the 5 Ways one will leave the business;
[COLOR=red]1)Death
2)Disability
3)Retirement
4)Voluntary Sale
5)Bankruptcy
[/COLOR]
[COLOR=red][COLOR=black]If you think about it this list of the 5 ways is quite effective, I know you all knew this, and this guy Meisel was just stating the obvious. Yet though, this is a attention grabber! If you deliver the 5 Way effectively most any owner will think about it, they likely need a moment to think about it and that is exactly what you want. Once again this was thought up by a guy who lived in died by the appointment, as in old school![/COLOR][/COLOR]
Too answer a question of Bankruptcy, it has nothing to do with BOE. Really the only thing an Insurance Policy has to offer is Asset Protection in the regards to Bankruptcy. Now of course the person can not get into a insurance contract after troubles start and expect any BK Judge to honor the protection, so if asset protection is desireable by the Owner he has to set up way ahead of time for the possibility of such protection.
D'oh! My green is showing. Didn't even think of asset protection.
Although I am new to the business, I am not new to sales and I really like the 5 ways. I know some members of this site think it is too negative, but I learned long ago that if you can get yourself to say the tough things, people are more likely to respond the way you want them to.
That said, I have been digging through old posts and other sources in trying to get myself up to speed.
The way I see it, the 5 ways system opens the set for me to sell the following products:
Life, health, disability and annuities (maybe).
Sticking with life (for now) it can be packaged as buy-sell, cross-sell, as part of a 412(i), or keyman. Did I leave anything off?
If we use a term-perm combo, the term allows us a bigger DB bang for the dollar to address short-term needs. I get it. But how does perm address long-term issues better, and what do you, James, consider those issues to be?
Also, what are you selling for retirement? If they are sole prop., then I can see annuities, but my understanding is that annuities lose their deferred status when owned by a corp or llc. This is a little grey for me because a 412(i) plan is funded by either life ins. or annuities (is this an exception?).
James, thank you for taking the time to share your knowledge. You da man!
A DB plan is by definition tax-qualified, similar in concept (tax-wise) to an IRA. The funding of a 412(i) plan, whether annuity or life insurance (up to the maximum amount) follows DB rules, therefore tax qualified.
If we use a term-perm combo, the term allows us a bigger DB bang for the dollar to address short-term needs. I get it. But how does perm address long-term issues better, and what do you, James, consider those issues to be?
WL or a well funded UL addresses long term issue by the simple fact it is there when you die and not if you die in the next twenty or thirty years. Yet the amount of insurance needed today is likely greater than the amount needed in twenty or thirty years, see I didn't say the need of insurance goes away but it does shrink in most cases. Most people will not save enough to privately fund a retirement package fully on their own. Maybe they can yet most likely will not, this is where life insurance steps into the retirement package.
If you are marketing too small business owners, likely they'll reinvest in their business more so than they'll fund a retirement package. Now obviously they have various needs of insurance while in business, first you have debt protection, asset protection and continuation of the business to name the big three, while term does an excellent job of protecting the Risk of Death it does nothing to protect the Risk if the insured lives, now does it? I don't have the numbers, maybe someone can look it up to support or destroy my concept of this, "most business owners will still be involved in their business to one degree or another when they die".
Or simply ask your small business owner when they plan on retireing. Likely you'll get a blank look, and likely be viewed as an idiot, if it was me you was asking. If their main concern is a fully funded retirement package maybe they should go to an investment advisor or retirement specialist, yet most do not, why is that? I think becuase most view that as BS, todays so called retirement theory isn't based on reality, most will not fully retire, esp your average business owners. Why? Most are in business to be productive in doing what they want to do, or in other words we a productive creature much like worker bees and the concept of fully retiring for those that like to be productive isn't an enjoyable outlook. Sure many view the idea of taking more and longer vacations or time off as favorable, yet most I meet have the full intention of staying in their business to one degree or another till they die.
All in all, that is where WL really kicks ass, it is there when they die and the more they have the better off their family and business will be. As in Continuation, Asset Protection and Debt Protection (because this didn't go away when their term policy expired before they did) not to mention Legacies to the wife, kids, church and other charities. Now with WL you have a built in emergency fund that we all like to call the Cash Value which can if not needed for business, depending upon funding of the policy a few years of partial retirement or vacations.
Now with WL you have a built in emergency fund that we all like to call the Cash Value which can if not needed for business, depending upon funding of the policy a few years of partial retirement or vacations.
I fail to see how a WL CV becomes a 'retirement' vehicle. Whatever you borrow out of it simply reduces the DB, plus you have to pay interest on it.
Don't you think an annuity is a better vehicle for retirement than WL? I'm not saying one should dump their WL but some people at age 70 will be insurance 'rich' and cash poor... being worth more dead than alive (which is sort of a sad commentary on how they managed their money, but the truth is the truth.)
I'm not trying to be flip here. Just trying to learn what James is trying to teach us.
I fail to see how a WL CV becomes a 'retirement' vehicle. Whatever you borrow out of it simply reduces the DB, plus you have to pay interest on it.
Don't you think an annuity is a better vehicle for retirement than WL? I'm not saying one should dump their WL but some people at age 70 will be insurance 'rich' and cash poor... being worth more dead than alive (which is sort of a sad commentary on how they managed their money, but the truth is the truth.)
I'm not trying to be flip here. Just trying to learn what James is trying to teach us.
Al
I'm not much of a teacher, just ranting about how I view selling life. As far as WL not being a retirement plan, totally agree! Yet, I thought I was quite specific about my views of retirement? Now what I stated was a few years in the very latter part of life if other retirement money is failing, which looking at most retirement plans and their obvious outcome, this is very likely. That is only if the person set up a lucrative retirement fund, which is also unlikely!
Now with WL you have a built in emergency fund that we all like to call the Cash Value which can if not needed for business, depending upon funding of the policy a few years of partial retirement or vacations.
No way did I mean to apply that WL is a Retirement fund, yet it is very possible that most will go thru their Real Retirement fund (whatever that may be) way before they die, at least on average that is very likely. Now if one is in their 40's starting their WL or UL policy and was loyal to it, after 40 years likely the CV has likely grown quite significantly. Are Annuities better if specifically brought for retirement? Yea, I'm sure they are and I'm not oppose to them at all, just wasn't talking about them or funding retirement specifically now was I? You getting ahead of the class Al, I know you're not happy with me but please don't be a Bad Noodle Al, try and be more attentive okay.
Ps; plus I haven't gotten into the whole "Life Value" discussion yet either!
Ps; plus I haven't gotten into the whole "Life Value" discussion yet either!
Can't wait...
I take it the DB premiums are treated as compensation for the owner? And funding the WL/UL also serves as a way around needing to fund retirement plans for employees....I've read in another thread that UL is really term, but it seens that this would be a good place for an EIUL, yes?
I take it the DB premiums are treated as compensation for the owner? And funding the WL/UL also serves as a way around needing to fund retirement plans for employees....I've read in another thread that UL is really term, but it seens that this would be a good place for an EIUL, yes?
I'm a believer that the Equity Index is never going to achieve higher Interest Crediting than a Fix Product over time. I would pick a UL if Loans are going to be an aggressive feature use of the product. Here is a good site for the nuts and bolts and relative information. Peter Katt: Fee-only Life Insurance Advisor
The UL does seem to have become a staple in the world of business, esp. with Key Man Coverage. Now Keyman is a dual use strategy, which is a powerful selling point. First you cover the business, as in having a tidy sum to find and hire a new key employee. Now if the employee survives and retires as agreed upon such as twenty or thirty years down the line he the employee takes over the policy, now taxation is a concern but still it is powerful on the sales table. I wouldn't suggest that the CV of the Insurance Product as a way to fund retirement, but would use the phrase, "Loyalty Bonus" or "Executive Bonus" that doesn't fall under Non Discrimination laws.
Some now are attempting to use Term with ROP in replacement of the UL or WL in Keyman insurance. It is a cheaper alternative, I don't think it is as good but I would use it if cost was going to narrow down other possibilities.
I fail to see how a WL CV becomes a 'retirement' vehicle. Whatever you borrow out of it simply reduces the DB, plus you have to pay interest on it.
Don't you think an annuity is a better vehicle for retirement than WL? I'm not saying one should dump their WL but some people at age 70 will be insurance 'rich' and cash poor... being worth more dead than alive (which is sort of a sad commentary on how they managed their money, but the truth is the truth.)
I'm not trying to be flip here. Just trying to learn what James is trying to teach us.
Al
Al3, I had the good fortune of entering into the industry under someone who is very creative at marketing and helping one to understanding these products and how they work for the benefit of the client. I am still rather new in the industry as well (2.5) but I learned quite a bit under this guy on how the eiul's products worked, and , CV is a big part of it no doubt.
We ran our own illustrations which as we all know, are mere guidelines on how these products work, which do work well. It is one product where I can demonstrate how it can be a VERY NICE supplement to retirement, not to replace it, and your DB does not diminish.
Though there are tons of guys on this board who know way more than I do but I had the benefit to study these products under someone who is very good at getting his point of view across. So finding a mentor is a key step in succeeding. I am no longer captive with him, but I am still contracted to write through his mo, however, I have since focused mainly on health insurance which he doesn't do any business in that field.
We also had two awards conferences each year to end a two-day training for the entire group, mostly in our area, but have had these conference in Biloxi, one month prior to katrina, natchez, jackson, Lafayette, nashville, and hot springs and though I was captive, he also works with independent agents a well. It's a great two days of hearing from some of the top salesmen in this group who share their experiences with everyone.
Was also treated to The Sales Expo in Atlanta last year, where, I have since forgotten the name of the rep, w/state farm whose presentation was about generating a cash income from WL insurance. It was a pretty good presentation and one that I don't believe a majority of agents even consider other than the cv being just a side benefit. As good as his illustrations were, they still did not compare to the ones we have presented in-office. If you have a chance to attend one (sales expo), do so.
These products IMHO, definitely show how one can be alive and still enjoy the tax-free dollars down the road.
Last edited by Sir Ringo : 09-10-2007 at 10:55 AM.
Good Post, Sir Ringo, most miss the Option of changing the DB, as in Option A, B and C.
We ran our own illustrations which as we all know, are mere guidelines on how these products work, which do work well. It is one product where I can demonstrate how it can be a VERY NICE supplement to retirement, not to replace it, and your DB does not diminish.
So one wants to go and sell too businesses, like Continuation Planning but what do we to as Independent Agents for our Plan of Continuation of existing clients if something happens to us??? Obviously this is a sore point for me and most other Independent Agents I know, sure some have children going into the business or partners that can carry on the service we sell.
Obviously this is my achillies heel right now and some of the captive agents have "stolen" damn thieves, accounts I thought I had wrapped up! Now say what you want about the Big Houses with their staff of Captive Agents and the cost of their products. They can assure their customers continuation of any plan and service they sell, which to some is well worth the higher price. I'm thinking this is a lot more important to a lot more people than the general mindset of most Independent Agents would like to believe.
To touch on the term-perm combo again (bear with me, I'm new), please walk me through an example.
Target client is a plumber. He nets $200k/yr. (based upon someone I know) and is a one-man shop. Current biz. structure is sole-p. Has two children 7 & 9 and babies momma living with him (she's good for $40k/yr). He is thinking about expanding and bringing on some help.
Currently my plan is to try and get as close to $45k as I can into an annuity-sep. I'm sure he could also use a DI policy.
How am I presenting life to this guy?
Inintial thought is 1mm 10-year term and UL for X???
To touch on the term-perm combo again (bear with me, I'm new), please walk me through an example.
Target client is a plumber. He nets $200k/yr. (based upon someone I know) and is a one-man shop. Current biz. structure is sole-p. Has two children 7 & 9 and babies momma living with him (she's good for $40k/yr). He is thinking about expanding and bringing on some help.
Currently my plan is to try and get as close to $45k as I can into an annuity-sep. I'm sure he could also use a DI policy.
How am I presenting life to this guy?
Inintial thought is 1mm 10-year term and UL for X???
I would think, that he would need or want more than 1 mill in term, he could easily qualify for 4 mill. Yes, I would push DI with the term product, in fact I would likely use DI if he had life insurance already in place. You are not giving much information here, you need to sit down with him and try to understand if he a strong advocate of insurance or not. If he is a big Dave Ramnsey or Suze Orman follower, there simply not much you can do outside of term, I'm not even sure if either of these boozoo's think that DI is a good choice?
The perm. insurance should be there, if not for final expense, he likely cover that out of pocket just as cheap though, well at least at this level of income. Yet though, look into his credit lines for the business. If he is going to expand, this will also! This is basically nothing more than debt he'll always have, well as long as he is in business. If he is doing a hefty amount of business as you suggest he is likely running a credit line greater than his yearly income (I'm guessing here), go with a UL or WL to protect that. You have to explain why the term or "Income Replacement" for his kids and wife (?) or live in should not be the vehicle to pay off business debt. This is where a good UL or WL is strong, cover the risk and in the end if it isn't needed use the CV built up for a nice little boost to his retirement funds, or it can aid in a self funded part of his LTCi needs later in life.
Yet before I did that I would suggest that he seeks out a Estate Planner to come up with a Trust to protect his children in case the Insurance is actually used (god forbid). Now that is just another one of those services you should be able to do. Go visit some well known Financial Attorney's or Estate Planners in your area and ask permission to refer people to them.
Remember, the first policy is the hardest, the second is easier by the time you are on the third policy you are a faithful and trustworthy insurance advisor.
1. Term Life, (sell term than convert) sell UL or WL if the client is in need and you can actually get the sale!
2. DI
3. WL or UL
4. LTCi
5. Annuities
6. All listed above but for employees.
Yet though, if you can have him do a Insurance Review, you have to find out what he wants protected for life vs short term or income replacement. Yet since their is a business in play here, I would think 250 grand WL or UL would be the starting point. If you want to pitch WL and Term combo, I'm guessing that 250-500 grand WL with at least 2 mill (if not 3 or 4) in term is the least I would shoot for. Now this is not taking into account that other insurance is not in play? Yet though, I would try to get him to talk and see how he feels, IMHO DI is just as important if not much more than WL is too any well balance insurance plan.
Lunch, one thing to keep in mind, and that is risk management is the foundation of any financial plan, it should be the first step in planning ones future because if it's not, well, things get ugly. You need to get a needs analysis from this guy, once you have that info, you will know a lot more about how to help him.
I am not saying that you have the same problem I once had when I first started, but getting real nosey was an achilles heel for me but now I don't have a problem with it anymore.
I would think, that he would need or want more than 1 mill in term, he could easily qualify for 4 mill. Yes, I would push DI with the term product, in fact I would likely use DI if he had life insurance already in place. You are not giving much information here, you need to sit down with him and try to understand if he a strong advocate of insurance or not. If he is a big Dave Ramnsey or Suze Orman follower, there simply not much you can do outside of term, I'm not even sure if either of these boozoo's think that DI is a good choice?
The perm. insurance should be there, if not for final expense, he likely cover that out of pocket just as cheap though, well at least at this level of income. Yet though, look into his credit lines for the business. If he is going to expand, this will also! This is basically nothing more than debt he'll always have, well as long as he is in business. If he is doing a hefty amount of business as you suggest he is likely running a credit line greater than his yearly income (I'm guessing here), go with a UL or WL to protect that. You have to explain why the term or "Income Replacement" for his kids and wife (?) or live in should not be the vehicle to pay off business debt. This is where a good UL or WL is strong, cover the risk and in the end if it isn't needed use the CV built up for a nice little boost to his retirement funds, or it can aid in a self funded part of his LTCi needs later in life.
Yet before I did that I would suggest that he seeks out a Estate Planner to come up with a Trust to protect his children in case the Insurance is actually used (god forbid). Now that is just another one of those services you should be able to do. Go visit some well known Financial Attorney's or Estate Planners in your area and ask permission to refer people to them.
Remember, the first policy is the hardest, the second is easier by the time you are on the third policy you are a faithful and trustworthy insurance advisor.
1. Term Life, (sell term than convert) sell UL or WL if the client is in need and you can actually get the sale!
2. DI
3. WL or UL
4. LTCi
5. Annuities
6. All listed above but for employees.
Yet though, if you can have him do a Insurance Review, you have to find out what he wants protected for life vs short term or income replacement. Yet since their is a business in play here, I would think 250 grand WL or UL would be the starting point. If you want to pitch WL and Term combo, I'm guessing that 250-500 grand WL with at least 2 mill (if not 3 or 4) in term is the least I would shoot for. Now this is not taking into account that other insurance is not in play? Yet though, I would try to get him to talk and see how he feels, IMHO DI is just as important if not much more than WL is too any well balance insurance plan.
Wow, good stuff!!!
Of course, being as slow as I am, I need some of the details painted in. Such as:
You have to explain why the term or "Income Replacement" for his kids and wife (?) or live in should not be the vehicle to pay off business debt.
And, how do I calc how much DI to recommend?
Thanks for your patience and kindness in dealing with these questions.
Selling Life Insurance...
I'm not much of a teacher, just ranting about how I view selling life. As far as WL not being a retirement plan, totally agree! Yet, I thought I was quite specific about my views of retirement? Now what I stated was a few years in the very latter part of life if other retirement money is failing, which looking at most retirement plans and their obvious outcome, this is very likely. That is only if the person set up a lucrative retirement fund, which is also unlikely!
Linear Mode
