Life Insurance
Compelling Client Conversations That Create Life Insurance Selling Opportunities
by Greg Schwabe, FMLI

What should life producers be doing when so many people are preoccupied with concerns about the future and the economy? They’re looking for light at the end of the tunnel when it comes to jobs and retirement.

The answer is not doing something new or different. It’s what you do every day--have conversations with your clients and prospects. It’s having them share with you the changes taking place in their lives. This is the only way you can discover their needs and help fill them.
If there is a difference, it’s urgency. Changes in the financial circumstances of clients and prospects demand attention and solutions that only life insurance can deliver.  As you are having client conversations, here are seven ways to approach critical issues:

Ask Clients The Value of Their Investments Today Versus 12 to 18 Months Ago

Believe it or not, this may be the first time a majority of clients have come to terms with their accounts. Some have been afraid to look at the reports and others are so distressed they have not wanted to face the issue.

This should be the very first question that an advisor asks of every client they speak with. Chances are that those investments are valued at about half of what they were. Here’s where life insurance can fill the gap against an unforeseen event prohibiting the client from growing the diminished asset back up to and beyond the early 2008 account values. It’s actually a simple sales opportunity that most advisors never consider.

With term life rates on an upward trajectory, this product may never be more affordable than it is today.

Policy Reviews Are More Essential Than Ever

Clients can ill afford to overpay for their insurance coverage or hold under performing contracts. A good advisor can identify questionable policies and offer viable solutions.
In a given year, a large proportion of the average advisor’s business comes from existing clients or people they know. With individual and family circumstances changing so rapidly, timely policy reviews are more critical than ever and that requires staying in close touch with your client base.

Offer Clients Options

Every consumer has questions about investments and financial matters. They are looking for advice and experience, not someone who is nothing but an order taker.

And that means choices. They want to participate in the decision process. The -savvy producer identifies options. When you speak with clients, you can spot coverage problems and identify gaps.

For example, Home Depot and Lowe’s offer options for products that are good, better, and best. You should do the same for your clients. Based on their objectives and needs, present options – preferably three options. That seems to be the magic number when it comes to choices. Just like with kids, it helps to ask; “Do you want to go to McDonald’s, Burger King, or Wendy’s?” Choices make us feel comfortable and competent.

For example, more than anything, the decision should come from the client. Without options, the answer will more than likely be “no.” Choices open the way for thought and asking questions. In other words, they change the buying mindset.

Cash Value Policies Have A Strong Appeal

Clients like having insurance plans cash values rather than looking at a ledger with all zeros on it. Remind your clients that it’s not a matter of what you pay for a policy, but what it really costs you to purchase it. That’s why cash values are so important.  We know that, better-designed products are coming -- products that you might consider putting clients into. What if you are trying to upgrade from a secondary no lapse product that has no values in it and the client is several years older? An exchange of policies may not be possible unless a larger premium can be paid. By selling contracts now that will have some cash value in future years, you keep the client in the 1035 exchange market and making future insurance transactions much more affordable.

Every client, no matter age or financial circumstance, is focused on one overriding issue right now and that’s the future. The burning question is, “Will there be enough money?” Some have quite a modest financial picture in mind while others have more complex and demanding requirements. But everyone is concerned about having the income and reserves to meet their needs. More and more, cash values play a key role in their thinking.

Become Aware Of Medical Conditions And Impairments

Do your homework for clients who have a medical condition or another type of impairment. There are insurance carriers with an interest in specific medical conditions. The task to identify them and know the underwriting issues before applying rather than first looking at their compensation or competitive preferred rates.

The longer it takes to conduct the underwriting process, the less likely the case will ever be placed. The placement probability will go down roughly 1% a day after the initial underwriting is submitted. Those odds will go down even more if you end up having to change companies once the process has started.

Help Employers Take Advantage Of Voluntary Benefits

Employers are struggling to pay for rising employee healthcare costs, particularly in this economy. You have opportunities to propose cost-cutting measures, such as voluntary benefits. A broad range of products includes long-term care, disability income coverage, group life, and critical care insurance.

Employees have been putting major purchases on hold because of uncertainty about the economy. The fact that savings rates are much higher suggests that these same employees want to be prepared for any financial eventuality. Being able to access specific products through group savings can be attractive. Employees can select the coverage they want, usually with a minimum of underwriting and then have the benefit of payroll deduction.

For example, an employee who has watched a friend or family member go through the medical and financial stress of a severe illness may have an interest in critical care coverage or long-term care protection.

The hurdle is very low since all that is required of an employer is to endorse the products and give you access to the workforce. Once enrolled, you’ll expand your client base for personal coverage and future referrals.
Focus For The Right Prospects

They may say otherwise, but producers in every industry, including life insurance, fail to qualify prospects. They find themselves spending time with people who need their service but, for one reason or another, cannot afford to make a purchase.

Try as hard as we can, it isn’t always possible to pre-qualify prospects even least minimally to avoid wasted effort.

What people do for a living may offer helpful clues when it comes to prospecting.
You might be at a party and hear someone say, “We’re continuing to grow” or “I know some people are getting hit hard, but we sure haven’t seen any problems.”

Make it a practice to get online regularly and check the local employment reports, paying particular attention to companies that are hiring. In other words, target those who may be in fairly recession-proof positions. Prospects in the trade industries, such as contractors, heating and cooling professionals, electricians, and plumbers are good candidates for insurance products. Educators are another good source.

These seven strategies provide effective ways to have meaningful conversations with clients and prospects. And, most importantly, they can be conversations that are appropriate to their concerns and questions, which is what every good advisor is looking for today.
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Gregory E. Schwabe, FLMI, is National Marketing Director for First American Insurance Underwriters, a Needham, Mass.-based insurance brokerage firm specializing in coaching successful producers. During his 25 years in the life insurance brokerage business, Schwabe has been a presenter at national meetings and has spoken at life association events and career agency offices about working in the brokerage marketplace. Contact him at 800-952-0820 or gschwabe@faiu.com.