selling guide -...

Brought to you byAs seen in the July 2010 issue

agent’s sales journal

inside2010 Life Insurance Market Study 2

Life Insurance Carrier Report Card 7Dealing with Procrastinating Clients 9

Finding New Life Insurance Clients 10Helping Clients See the Need 11

Illustrating the Value of Life Insurance 13Selling to Those Who Think They Have It 14

lifeinsurance

sellingguide

» BY HEATHER TRESE, A SSO C IAT E E D IT O R

stagnant life insurance industry

spells changes future

2010 Life

Insurance

Market Study

shows little

growth —

but hope for

the future

forthe

life insurance selling guide

3V i s i t w w w . A S J o n l i n e. c o m f o r a F r e e S u b s c r i p t i o n

» We asked producers …

We asked producers to comment on their life insurance sales in the past 12 months. Here’s what they said:

“Selling in the group market, and business is hanging on for dear life. Losing employees, and business is decreasing, therefore I do not have as many �prospects to sell.”

“I’ve seen an increasing trend. Fear, I feel, leads people to buy life insurance. With our unstable economy and health care, I think more people are looking to �life insurance.”

“Have noted increased interest from consumer, but tighter financials to work with.” �

“Money is tighter, and consequently, life insurance falls down the ‘needs’ ladder.” �

“I have a hard time finding [clients] or convincing people that they need coverage. The attitude has become, ‘I can’t afford it, so when I die, I don’t care.’ A �very sobering shift.”

“Sales of whole life have declined, but term has increased, making up for the difference. My renewal commissions will suffer because of this, however.” �

“Life insurance is not something people think about until someone brings it up to them.” �

it’s been a slow year for the life insurance industry.As major companies continued to deal with financial

troubles, consumers lost more and more faith in the indus-try. Instead of growth, the majority of agents experienced either flat sales or a drop in their numbers.

But just because last year was rough doesn’t mean the next year has to be. Producers and industry professionals are optimistic about the future — and carriers are working to bring innovative products to the market.

The fifth annual Life Insurance Market Study, conducted in March 2010 by Agent Media* in partnership with the LIFE Foundation, gives a glimpse into the past — and future — of the life insurance market. Producers explained the challenges they were facing in the market, and where they hope to be in the next year.

‘flat is the neW norm’ “It’s been the worst year I’ve ever had,” said David Klein-handler, managing partner at DKA, which works primar-ily with affluent clients. “I had a lot of laid-off clients. It’s been a very tumultuous year. But it’s OK; you learn from what goes on. The whole industry is down. I was down probably 90 percent last year — I had to put out a lot of fires, and I couldn’t focus on new business.”

In the past 12 months, a larger percentage of agents reported that their sales remained the same, rather than increasing or decreasing. Forty-one percent of respondents claimed flat sales, while 38 percent said their sales increased, and 21 percent reported decreased sales. (Chart 1)

And it’s not just agents who experienced this slump — many life insurance companies saw little or no

*Agent Media is the publisher of the Agent’s Sales Journal

growth in the past year, as well. Marvin H. Feldman, president and CEO of the LIFE Foundation, explained that, while mutual life insurance companies that didn’t demutualize had a pretty good year, other companies were not as lucky.

“The stock companies were not very successful, and for many of them, flat is the new norm,” he said.

But that might not be the case for long. Agents are overwhelmingly optimistic about what the next 12 months will bring. Seventy-six percent believe they’ll see an increase in sales, while 22 percent think their sales will remain the same, and only 2 percent anticipate a decrease. (Chart 2)

According to Feldman, things are looking up for the carriers, too.

“If you look at the financial position of the compa-nies today versus a year ago, the companies are much stronger,” he said. “The consumer sentiment is starting to swing back.”

looking for guaranteesTerm insurance was by far the most popular product this year, and the reason is simple: guaranteed income. (Chart 3)

“Middle Americans kept buying insurance,” said Dan Mulheran, president of U.S. retail distribution for ING. “But they didn’t want to buy anything permanent [because of the financial crisis], so they bought term. Term provides a significant amount of protection with very low risk. Those two circumstances collide perfectly with what was going on in the last year. Whole life also went up, and for the

same reason — whole life is full of guarantees and is very protection-oriented.”

Future product innovation will likely help bring about the guarantees that clients are looking for, as well. Chris Grady, president of insurance distribution and marketing for Genworth Financial, said that many carriers are devel-oping products such as term universal life and universal life with guarantees to age 105.

Feldman noted, however, that product approvals can often take years.

“The agents and the consumers have to understand that if the company is going out for a new product design they have to go to 50 different legislators,” he said. “The actual implementation is a very long, drawn-out process. [But] I think the industry has been overall very responsive to consumer demand.”

other challengesThe economy isn’t the only factor that agents have to contend with. All the usual obstacles that go along with selling life insurance — prospecting, client perceptions, etc. — are still very much an issue for producers, and coupled with the unique market forces of the past two years, it makes for an especially challenging industry. (Chart 4)

The top five challenges for agents in the life insurance market are:

Clients procrastinate �

» trese, page 4

4

Prospecting/finding new clients �

Clients do not recognize the need for life insurance �

Clients perceive it as too expensive �

Clients say they already have coverage through their �employer

When it comes to fighting procrastination, Kleinhandler said it’s all about making it personal for the clients.

“We had this one guy who did all the paperwork, the medical, did everything, and then he said, ‘Just let me think about it for a few more days.’ Then, in those few days, he happened to die,” Kleinhandler said. “So even though it makes [clients] uncomfortable, we try to tell those ‘what if ’ stories. It makes it real. It gets really hard when you start talking about the subject matter because death is very personal.”

As for finding new clients, Feldman agrees that it can be challenging for some agents to prospect. However, he also said that the producers who had the best year were the ones who weren’t afraid to reach out, even in the face of poor market conditions.

In fact, one of the best ways to reach out to new clients is by using your current ones — 37 percent of producers said referrals from current clients were their most valuable lead source, and another 36 percent said their best leads came from their existing book of business.

Selling life insurance to younger clients is another challenge that agents seem to face; this year, there was a 12-percentage-point drop in the number of agents who write the most life insurance for people in their 30s. (Chart 5)

One possible explanation for the drop is that agents were refocusing on their core client group.

“My hypothesis is there were other solutions in the marketplace,” Grady said. “The agents themselves focused on more Main Street America, [small-business] owners … traditional life insurance clients that have families, children — all that stuff. I think that the solution for the younger people was through group insurance. And for the younger people, when they have a cut in pay or a reduction in pay, life insurance would become a secondary solution because they have so many other expenses.”


» chart 1

New life iNsuraNce sales activity over the past 12 moNths

Increased substantially 7%

Increased somewhat 31%

Remained the same 41%

Decreased somewhat 17%

Decreased substantially 4%

» chart 2

aNticipated New life iNsuraNce sales activity over the Next 12 moNths

Increase substantially 26%

Increase somewhat 50%

Remain the same 22%

Decrease somewhat 2%

Decrease substantially 0%

» chart 3

types of life iNsuraNce producers offer

Term 95%

Universal life 78%

Whole life 70%

Single premium whole life 37%

Variable universal life 34%

Survivorship life 28%

Group (employer-paid) 27%

Variable life 23%

Voluntary (employee-paid) 20%

Mortgage term 20%

Equity indexed universal life 19%

» chart 4

producers’ maiN challeNges with selliNg life iNsuraNce

Clients procrastinate 56%

Prospecting/finding new clients 43%

Clients do not recognize the need for life insurance 41%

Clients perceive it as too expensive 27%

Clients say they already have coverage through their employer 24%

Underwriting problems 22%

Clients don’t understand the products 11%

Premiums are too high 9%

My own lack of product knowledge/training 3%

Do Not Call regulations 3%

Compliance issues 1%

Other 5%

» trese, page 5

» trese, from page 3


» chart 5

age group producers write the most iNdividual life iNsuraNce for

2006 2007 2008 2009 2010

Under 20 0% 0% 1% 1% 0%

20s 1% 1% 1% 2% 1%

30s 25% 29% 22% 28% 16%

40s 42% 37% 41% 38% 42%

50s 21% 20% 21% 26% 30%

60s 8% 9% 13% 7% 9%

70s or older 2% 3% 2% 0% 2%

Despite all the difficulties of the past year, life insurance agents still have plenty to look forward to in the coming months. New product innovations, increased consumer trust, and an overall hopeful outlook should help propel the life insurance market off its flat line — and spike sales for those producers who are willing to take the time to improve their business strategies even when sales are steady or slumping.

“I don’t think the industry has inherently changed,” said Feldman. “I think that there are some products that

needed to be repriced to be effective; some of them were underpriced in the guarantees … When it’s all said and done, the industry will have a much stronger portfolio of products that provide less risk to the consumer and more options for the agent.” «

Heather Trese is the associate editor of the Agent’s Sales Journal. She can be

reached at 800-933-9449 ext. 225 or [email protected].

» trese, from page 4 » methodology

In March 2010 , Agent Media (publisher of the

Agent’s Sales Journal) and the LIFE Founda-

tion conducted a survey among licensed life

agents nationwide. Producers were invited via

an emailed survey link to take part in the study

and were asked questions about their experi-

ence in the market and their outlook for and

opinion of the life insurance industry in general.

More than 650 individuals responded to the

invitation. As an incentive, a drawing was held

for a Garmin GPS system. The survey results

reflect answers given by personal producing

agents who have sold at least one life policy

in the past 12 months.

6

A carrier is one of the more important entities in a life insurance agent’s

business. As such, it should be there when the agent needs help with

leads, underwriting, or other business issues. In fact, according to the

2010 Life Insurance Market Study by Agent Media, 57 percent of agents

would like lead assistance from their insurers, 38 percent are hoping for a

simpler application process, 25 percent would like insurers to issue poli-

cies more quickly, and 24 percent each would like new sales concepts

and less-invasive underwriting. (Chart A)

Chris Grady, president of insurance distribution and marketing for

Genworth Financial, couldn’t agree more. In fact, he thinks one of a car-

rier’s top priorities should be assisting agents with their daily business

tasks so they can get out of the office and out where they belong —

talking to clients.

“I think it’s critical that companies help agents spend less time on the minutiae so they can spend more time in front of consumers selling or getting referrals and less time on the presentational side,” he said. “I think we have to make it easier for producers to do business. We can help them with things like women’s initiatives, minority initiatives. We can help them with presale marketing and on the business side — so the companies can offload work out of the producer’s operating models.”

Grady thinks this is the future of life insurance — companies devel-oping more innovative products to meet consumer needs, and more supportive systems to meet agent needs. And many carriers already have programs in place.

To find out which carriers are the best at providing lead programs, marketing, and quality products, check out our carrier report card, be-ginning on page 30.

What has your carrier done for you lately?

» chart a

What insurers can offer to help producers sell life insurance more successfully

Leads 57%

Simpler application process 38%

Issue policies more quickly 25%

New sales concepts/ideas 24%

Less-invasive underwriting 24%

More affordable products 18%

Give clients better underwriting classes 16%

Better marketing material to use with clients 14%

Online tools (e.g., case status, app submission, licensing, etc.) 12%

Direct access to an underwriter 11%

Products that are easier to understand and explain 11%

More innovative products 10%

Higher commissions 9%

Training 9%

Live telephone support 6%

Other 4%



how do you decide which carriers to work with? Maybe you look

at company ratings, or perhaps you respond to ads in insurance

industry publications. But chances are high that you also follow the

recommendations of your peers. As a companion to our fifth annual

Life Insurance Market Study, we surveyed producers nationwide on

which carriers best meet their needs in several different categories,

including which have the best marketing and advertising and which

offer the most stable premiums on life products. The categories reflect

all aspects of an agent’s relationship with their carrier.

The list of carriers represented in the survey was derived from a

ranking of the top life carriers active in the independent distribu-

tion channel. We’ve presented the top five companies as ranked by

producers in each category, as well as a list of insurers with which

respondents are contracted.

Respondents were only permitted to rank those companies with

which they were appointed, except in two categories — best at rais-

ing public awareness and best at promoting offerings.

Results reflect responses from producers who identified themselves

as independent agents and who have sold at least one life insurance

policy in the past 12 months. More than 470 agents participated in

the carrier report card.

» carriers represented

Aetna

Allianz

American Equity Investment Life

American General

American National

Aviva

AXA Equitable

Cigna

Conseco

Fidelity Life

Genworth

Great American

Great-West Life

ING

John Hancock

Lincoln Financial

MetLife

Midland National

National Life

Ohio National

Old Mutual

OneAmerica

Phoenix

Protective Life

Prudential

Sun Life

The Hartford

Transamerica

Unum

Western Reserve Life

2010 life insurance carrier report card

how the InduStry’S Major carrIerS handLe your needS — accordIng to producerS LIke you


8

1 Genworth

2 Allianz

3 MetLife

4 ING

5 John Hancock

1 MetLife

2 John Hancock

3 Genworth

4 Prudential

5 Tie: Allianz, American General, ING, Lincoln Financial

call center/ telephone support

Best call center/telephone support for life insurance sales efforts

1 Genworth

2 MetLife

3 Allianz

4 Tie: Aviva, ING, John Hancock, Lincoln Financial

1 MetLife

2 Allianz

3 Tie: Genworth, John Hancock

4 ING

1 Genworth

2 Tie: Allianz, MetLife

3 Tie: Prudential, John Hancock, Lincoln Financial

1 Genworth

2 MetLife

3 Transamerica

4 Tie: Aviva, Lincoln Financial

1 Genworth

2 Allianz

3 National Life

4 Lincoln Financial

5 Midland National

marketing material

Most effective life insurance sales & marketing material

promoting offerings

Best at promoting life insurance offerings to producers through marketing/advertising

training & educational opportunities

Best at providing training & educational opportunities for selling life insurance

most preferred to Write

companies with which agents write the most life business

leads and prospecting help

Most effective at providing producers with leads and prospecting help

raising public aWareness

Best at raising public awareness about the benefits of life insurance

best at meeting producers’ overall needs in the life insurance market

1 John Hancock

2 Genworth

3 MetLife

4 Tie: ING, Lincoln Financial

bestoverall

merriam-Webster’s online dictionary defines pro-crastination as “to put off intentionally the doing

of something that should be done.” As a financial profes-sional, if asked to use the word in a sentence, I would say something like, “I’m close to making a sale if only my client would stop procrastinating.” Or, “The reason they aren’t covered by life insurance up to this point is simply that the Joneses are habitual procrastinators.”

They’re not very clever sentences, but you get the point. The fact of the matter is many people — including me — don’t like to face their own mortality, while the purchase of life insurance forces them to do so. Let’s be honest: You can almost hear the wind being knocked out of certain clients when you put a plan in front of them and they see in hard, cold numbers the years ahead of them and the premiums they will pay.

In many cases, they say, “Thank you; we need to discuss this as a family,” and then the procrastination sets in again. And again. And again. And unfortunately, it’s often a piece of tragic news or an event that helps clients overcome that inertia and motivate them to the task at hand — purchasing life insurance.

The question remains, how do you overcome your clients’ lollygagging and put life insurance in place before they actually need it?

necessary evil versus absolute necessityBefore I entered the wealth planning business, my attitude toward life insurance was simple: It was a necessary evil that would protect my family in the event of my early demise. The insurance company would bill me annually,

and upon receipt of the bill, I would sigh and cut what seemed like an excessive check. Obviously, my attitude has changed, as I’m now a firm believer that it’s neces-sary for us to show our clients that they should treat life insurance as the cornerstone of their financial portfolios and as an absolute necessity to ensure the well-being of their family.

And whatever plan might be in place, without proper protection, an unexpected death could cause said finan-cial plan to collapse.

asking the tough questionsWhen thinking about their financial futures, many people focus solely on their investment strategy. The questions that they most often ask center on how they will reach their financial goals for retirement, college for their children, and other long-term needs.

It’s absolutely critical to pose to your clients a few additional questions. Yes they are basic, but they’re also brilliant, because they force your clients to come up with answers that lead back to the necessity of life insurance — if they are truly interested in protecting their families.

� What happens if there is no income coming into the household because of the death of a breadwinner?

� How will your children fund their college education?

� How will your spouse live in retirement?

� What happens to the assets you’ve accumulated if there is no insurance to cover everyday expenses?

making your pointOnce your clients fumble over their answers, it’s criti-cal to point out again how life insurance can be an important addition to any financial plan, designed to help their family meet current or future needs. Highlight how life insurance can help cover immediate expenses and provide long-term protection of the assets they’ve earmarked for their family’s future.

For example, point out how life insurance will help pay for such final expenses as unpaid medical bills, funeral fees, and estate settlement costs. Life insurance can also help meet the ongoing costs of running a household — without the need to dip into savings or deplete assets needed for the future. I guarantee that your clients have not considered these items.

Remember these points to help your clients over-come their the procrastination: Ask questions, demand answers, and help them stop putting off what needs to be done. «

Craig Hydahl is a principal of R.I.C.H. Planning Group. He can be reached

at 908-947-1565.

Why clients procrastinate on the life insurance salea few well-placed questions can move a client to buy now rather than put off until later

» BY CRAIg HYDAHL


9

you play an important role in helping clients under-stand the value of life insurance and how it can be

used to protect the people they care about. Though this can present a significant challenge at times, an even greater challenge is finding new clients with whom to have a life insurance discussion.

A recent survey found that 71 percent of the general population does not have an investment professional — which means that many people aren’t receiving the financial guidance they need in order to plan for the future. Here, then, are five actionable tips that will help you identify prospective life insurance clients and transition into a candid conversation about their life insurance needs.

1 choose a target market

You’ve probably heard the old saying “You can’t be ev-erything to everyone,” and this is especially true when it comes to searching for new life insurance clients. An important first step in approaching new clients is to identify a target market on which to focus your sales efforts. Your target market may be defined by age, in-come, organizational membership, profession, product ownership (401(k), annuity, etc.), or other common characteristics. The needs of that market will dictate your sales approach.

2 mine your current book of business

You don’t have to look very far to find new life insurance prospects. In fact, one of the best ways to increase life insurance sales is to mine your current book of busi-ness for clients who might benefit from life insurance coverage. Because you already have established trust and credibility with your clients, they will likely be more receptive to what you have to say.

A good first step is to identify clients who have recently experienced an event that would trigger a need for life insurance coverage, such as transitioning to a new job, expecting a baby, purchasing a new home, retiring, or receiving an inheritance.

3 encourage your office staff to

generate sales leadsIf you have staff members, they interact with your clients on a daily basis and, if properly trained and motivated, can take advantage of these client “touches” to help you identify potential prospects. To make this tactic a success, staff members must recognize life events and circumstances that would make the client an ideal life insurance prospect.

Here is an example of how this scenario can work: While on the phone with a client, a staff member learns that the client is expecting a child. The staff member makes a note of that life event and passes the information along to you. You follow up with the client to congratulate them, then use that event as an opportunity to ask if they’ve thought about their life insurance needs now that their family is starting to grow.

It’s important to understand that by asking your of-fice staff to help generate leads, you’re asking them to do something that might be out of their comfort zone. Implementing some form of personal recognition or financial incentive will help ensure this program is a success. Please note that non-licensed staff should be compensated on the number of referrals — not on whether the referrals led to a sale.

4 take advantage of opportunities to

transition to a life discussionYou never know when an opportunity might arise to en-gage a prospective client in a conversation about their life insurance needs. One helpful tactic is to identify a real-life story that illustrates how either having or not having life insurance affected someone you know. Having a story on hand can be a useful tool to help move along your conversations, especially if you’re away from the office and can’t access marketing materials or other resources that you can share with a prospective client.

It’s easier to transition to a life insurance discussion if you develop a few standard icebreakers that can help direct the conversation where you want it to go. [See sidebar, “How to Start the Life Insurance Discussion,” for more information.]

5 set aside prospecting time on your calendar

It might sound simple, but marking off specific times on your calendar during which you’ll prospect is an essential part of any successful campaign. Let’s say your plan includes sending out 25 letters each week and then following up one week later by calling each of those 25 people to set up appointments. You must build time into your schedule each week to mail the letters and make the follow-up calls. If you add such a plan to your weekly regimen, you may also find your-self adding appointments with a good number of the clients you call.

Though the tips mentioned here may make things easier, there is no avoiding the fact that it can be very

difficult and time-consuming to find new life insurance clients. It’s important to remember that prospecting shouldn’t just grow your business — it should help current and future clients protect what matters most to them. That is the noble purpose of life insurance, and it can be a source of inspiration on those days when it feels as if things just aren’t going your way. «

Thomas F. Houle is vice president of Nationwide Financial Network. He can

be reached at [email protected].

5 tips for finding new life insurance clients why your second biggest challenge doesn’t need to hold you back

» BY THOMAS F. HOULE

» hoW to start the life insurance discussion

Here are some sample icebreakers you

can use to transition into a life insurance

discussion with your clients:

“When was the last time you reviewed �your life insurance coverage?”

“Do we handle your life insurance here, �or do you have it with another agency?”

“By the way, who handles your �life insurance?”

“Do you know when your life �insurance expires?”

“I want to be sure that we take the time �to discuss the most important policy that

my agency offers — it is the policy that

will help ensure your family’s future.”

“Have you thought about what �kind of legacy you want to leave for

your children, grandchildren, or a

favorite charity?”

“Did you know that based on a J.D. Pow- �er and Associates study conducted with

surviving spouses (ages 35 to 50) with

children, fewer than 25 percent of them

felt that their deceased spouse provided

them with enough life insurance?”


10

We’ve all been there before: You have an outstanding array of insurance products at your fingertips and

a strong prospect, which all makes for a seemingly ideal match. But after discussing your prospect’s assets, goals, and family’s needs, they suddenly balk — and then start backpedaling. When asked why this is, you hear an oft-cited explanation: Life insurance is not a critical need. Maybe in the future — but not now.

Overcoming objections is par for the course in the career of a top producer. But when prospects believe life insurance isn’t essential — although evidence strongly suggests otherwise — what’s your next step?

Let’s look at six time-tested tactics. Master these six, and you’ll enjoy far more success in assisting your clients, and give your career the added octane it just might need.

1 understand your client’s needs

First, a question: Can you summarize your client’s key ob-jections to life insurance in one crisp, accurate sentence? The quickest way to lose their confidence is by making ill-informed recommendations regarding policy type, available riders, face amount, and case design.

If you aren’t connecting with your client, go back and take a closer look at your initial fact-finding session. Match the right insurance product to your client’s specific needs by making sure you’ve utilized all of your carrier’s investigative tools. Be thorough. Leave nothing to guess-work. If you need to, gently probe for more information. Something that once seemed so elementary can often turn out to be the hidden explanation behind a client’s disappointing “no.”

You owe it to your client, yourself, your employer, and the carrier to understand your client’s needs. Remember: If you don’t adequately document your client’s assets, liabilities, income, expenses, marital status, and family circumstances, you may be opening the door to client disappointments and carrier delays, putting your rela-tionships at risk.

2 build trust and confidence

Thorough fact-finding lays the groundwork for a strong client-producer relationship. Build trust by avoiding the hard sell and conveying to your client that they are more than just a number.

To develop genuine rapport, listen to your client’s every word. Watch for nonverbal gestures, which speak volumes. Ask yourself: What is this client trying to com-municate about their needs that I might not realize —

perhaps because the client is not being forthcoming? When you can speak to your clients’ stated and unstated needs, concerns, and aspirations, you can deepen the professional bond and go a long way toward overcoming lingering objections.

Try to make your presentation in your client’s home. Studies consistently show that such a casual, disarming venue is most conducive to deepening trust and enhanc-ing communication.

Be in the moment with your client; active listening is key.

3 be concrete and specificIt can be far more persuasive to provide your client

with concrete, specific, and measurable evidence that they need life insurance, rather than serving up bland generalities and boilerplate material. Just as a picture is worth a thousand words, you can help overcome your client’s objections by providing a detailed financial snap-shot that clearly captures their assets, goals, and financial exposures while also highlighting the likely rewards of life insurance — and the risks of going uninsured. In other words, present customized solutions that meet your cli-ent’s individual needs.

4 provide compelling narratives

At its core, life insurance is simply a promise. It’s not just about numbers — it’s about our frailty as humans

and our responsibilities to our loved ones. When we ask clients to reflect on their mortality, it can be one of the most sobering requests they will ever receive. We need to be mindful of that every single day.

Where facts and figures often fail, personal narratives can go a long way toward underscoring the message that life insurance is a critical need. So, when speaking to your client, try to reference stories of people — both insured and uninsured — from your client’s own walk of life.

For example, a client who is also a parent will be far more swayed by the story of a young mother who secured life insurance just seven months before her diagnosis of terminal cancer, than by a sterile pie chart that shows mortality aggregates. Where numbers fail, the human element often compels.

5 think customer serviceAlways be available and eager to serve. Whether your

client is an on-the-go executive and mother of triplets or an overwhelmed CPA who cares for his ailing father at home, gladly adjust your schedule to accommodate their needs. It’s important to be available when it’s convenient for your client and to be aware of your client’s preferred learning style. If they are visual learners, a video-based presentation will more effectively overcome objections. Likewise, if they are more quantitative, use facts and fig-ures to underscore your central message: Life insurance is indeed a critical need.

6 keys to overcoming the objection ‘i don’t need life insurance’your clients won’t know they may need the policy unless you approach them the right way

» BY DAVID O’LEARY

» maintaining client relations

In the highly competitive life insurance industry, it’s essential to keep your client satisfied. How can you

strengthen your client relationships?

When delivering a client’s new policy, we hand the client a pen and ask them to write, in their own

words on the back cover of the contract, the top five reasons why they just purchased this insurance

product. The reason for this is simple: Should your client someday call you, or if you receive notice that

they want to terminate the contract, simply ask them to retrieve their contract, turn to the back cover,

and ask themselves what has changed since they bought the policy.

Then, you can make the case that if nothing has changed, there really is no need to replace the

contract. And if something has changed, you have new facts to begin working on a revised solution

that better meets their needs today. Again: It’s a win-win for all involved.


11

» hydahl, page 12

Serve your clients first, last, and always. Everything else will take care of itself.

6 get ansWers and solve problems

Even the industry’s most acclaimed producers don’t have all the answers. It is incumbent upon you to ensure that your client understands what you are recommending in terms of products; your discussions should be supplemented with additional resources as needed. Email a key article from a trade publication, respected personal finance magazine, or daily newspaper. Send a link to a website, place a call to a third party for additional information, or fax requested FAQs that same day. Answer questions in full, but avoid overwhelming clients. Less is often more.

As your career progresses, you will be called upon to resolve a host of challenging issues. Learning how to ef-fectively overcome the belief that life insurance is not a critical need is central to your client’s well-being and to your own success. When you place yourself in your client’s shoes and address their needs in an effective, professional manner, you create the ultimate win-win. «

David O’Leary is the executive vice president and chief operating of-

ficer of American General Life Companies. He can be reached at

david.o’[email protected] or 713-522-1111.

12

» o’leary, from page 11

on more than one occasion, I’ve heard complaints that life insurance is too expensive. To this, I often

quote a line from the classic “Blues Brothers” movie, star-ring John Belushi and Dan Ackroyd. In the movie, Jake and Elwood are trying to get the band back together. There’s a certain scene where they’re recruiting old band mates in a restaurant, and a stodgy, well-to-do family is offended by the presence of the two main characters. To this, Belushi turns and essentially asks the father how much he values his own family.

It’s a funny scene, and one I refer to time and time again when I’m explaining the need for life insurance. When clients tell me life insurance costs too much, I ask them how much it’s worth to them to secure their family’s financial future.

exploring the client’s optionsWith two children of my own and a wife, I understand the value of security. But on the flip side, I’m not a fool, either. I’m an educated consumer, and I treat my clients and prospects with the same respect I expect myself. This is why I understand that, in the economic climate such as the one we find ourselves in today, when many families live paycheck to paycheck, I understand the gripe, as well as the idea of how people can turn their backs on something they feel is simply too expensive.

But as a financial planner and a retirement planning specialist, two valuable facts that I need to continually point out are that there are all types of life insurance available on the market, and there is something for everyone. Through careful, diligent fact-finding (which, by the way, is free to clients), you’ll be able to discover exactly how much insurance a client can comfortably fit into their budget. I often find that clients and prospects are pleasantly surprised, and even relieved, to learn that even the tightest budget can provide some amount of family protection.

exploring the client’s valuesWe all have different values when it comes to family life. For those to whom family reigns supreme, it’s critical to

remind them how important the week-to-week paycheck is, so that in the event of a spouse’s death, surviving family members can sustain some type of similar lifestyle. As painful as it is, when discussing various scenarios, I remind clients that their children will have already lost a parent. They don’t want the children to lose the remaining par-ent to a job just to make ends meet. Having the money from an insurance policy buys them peace of mind and security in a very uncertain, emotional time. Then I ask, how much is that peace of mind worth?

As a financial professional, it’s crucial to find out what is most important to the family and then have them decide if that’s worth protecting. Many agents sell with logic and hope that the clients can emotionally justify it. What we need to do instead is sell with emotion and justify the purchase of life insurance with logic.

exploring the rest of the storyTo get clients past the idea that life insurance is too expensive, I also ask them to play the tape out. I tell them to run through the entire scenario of what their life would look like without the financial safety net of a life insurance payout. I ask them to paint the picture for me, out loud — because thinking is one thing, but verbalizing it is another. Through this exercise, a bit of magic often happens, and somehow, this solidifies the scenario for the client. When they speak out loud, they are finally hearing the reality of what could happen.

It’s painful, and emotions can run high. But what’s more painful is seeing what’s left of a family struggle financially, on top of dealing with a huge emotional loss. «

Craig Silverman is a retirement planning specialist with AXA Advisors. He can

be reached at 631-385-5234 or [email protected].

how to contrast the cost of life insurance with the value of the familyclients think life insurance is too expensive? ask them to think again.

» BY CRAIg SILVERMAN


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as we work through the aftermath of the financial crisis in the United States, our clients continue to

feel the pressure of deciding how much money to save, how much to spend, and where to spend it. As insur-ance professionals, you know that life insurance plays a key role in protecting clients and their families and truly is a required expense, but how do you convey that to consumers?

A detailed analysis of self-reported financial ob-jectives revealed that Americans typically have just 49 percent of the financial protection they need in order to achieve their financial goals for their families. This life insurance gap exists despite the fact that more than 80 percent of American breadwinners feel they have enough life insurance coverage, and translates into a median shortfall of almost $300,000 in coverage for the typical American family.

As you sell life insurance to your clients, one of the common objections you may hear is, “I already have coverage through my employer.” This may be true, but most clients don’t realize that it may not be enough. A typical American holds about eight different jobs between the ages of 18 and 32, and recent research shows that 85 percent of American workers expect to be employed by a new company within 12 months. As such, their coverage can change dramatically over time depending on their employment situation, resulting in unstable coverage for them and their family.

So how can you overcome that objection?

that coverage may not be portableThe unemployment rate in the United States is over 9 percent; in some states, such as Florida, the rate is more than 12 percent. Many of today’s unemployed felt that they had adequate life insurance coverage from their employer. They also didn’t realize that when they left the company, in most cases, that coverage did not go with them. Some company plans allow for the insured to continue coverage, but most limit the portable amount, and generally, the cost of coverage will increase significantly and no longer present an affordable option. As a result, the client doesn’t have enough coverage or doesn’t have any coverage, or the coverage they do have is too expensive.

When the cost becomes significant and the income stops coming in, many clients begin to feel that life in-surance coverage is no longer a necessity that they can afford, and in turn, they lapse the coverage — leaving them with nothing.

that coverage may not fit their future needsObtaining additional life coverage can protect your clients from unforeseen changes in health. We have seen many of our clients procrastinate when obtaining life insurance coverage, to the point that they realize they need and want it, but cannot obtain it as a result of significant health changes. That health change becomes the catalyst for them to seek out coverage, and we then have to inform them that because they waited, they will not be able to obtain coverage, they will not be able to obtain enough coverage, or coverage is no longer affordable. Many of these clients were under a false sense of security, feeling that the coverage they received through work would be there forever.

that coverage may cost you even more over timeLife insurance coverage provided by employers can be automatically deducted from the employee’s paycheck; as a result, most employees don’t realize the cost of that coverage. They also don’t realize that each year the cost of that coverage increases as they age. For younger clients, this increase may not be noticed. However, as people work longer and retire later, they can see significant an-nual cost increases over their lifetime. In addition, group coverage doesn’t offer credits or reduced costs for good health. Everyone in the same age range pays the same rate — regardless of factors such as weight, medications, or impairments. When your clients apply for individual life insurance coverage and work through the underwriting process, the better their health, the lower the mortality risk, and thus the lower the premium. As a result, many clients don’t realize that there are other cost-effective life insurance coverage options available.

As our clients are faced with the challenges and stress of watching where each dollar goes, they may feel more secure with the life insurance coverage that their employer provides — but they may not be as secure as they think they are.

In all life insurance planning, clients should not rely on their employer coverage alone. It is up to you to help them understand the potential pitfalls of this approach and to overcome their objections. «

Michael Dyck and Darryl Marshall are sales vice presidents with Crump

Life Insurance Services. Dyck can be reached at [email protected]

or 800-824-0024, ext. 5762; Marshall can be reached at darryl.marshall@

crump.com or 800-546-4406, ext. 8214.

What if your clients say they have coverage through an employer?how to present the shortcomings of group life insurance

» BY MICHAEL DYCK AND DARRYL MARSHALL


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