Starting with life insurance
What do you guys think about using life insurance as a cold call product just to get people in and build trust. I would guess that most prospects are probably sh*tty but eventually you would come across good ones. You could buy leads for cheep for a somewhat warm call. The commission is pretty good, but you might get stuck being labeled as a life insurance salesman instead of a financial advisor?
[quote=futureadvisor]<p =“Msonormal” style=“margin: 0in 0in 0pt;”>What
do you guys think about using life insurance as a cold call product
just to get people in and build trust. I would guess that most
prospects are probably sh*tty but eventually you would come across good
ones. You could buy leads for cheep for a somewhat warm
call. The commission is pretty good, but you might get stuck
being labeled as a life insurance salesman instead of a financial
advisor?
No one buys life insurance over the phone.
Right but with life insurance (in their mind) they are not risking their life savings with you because its with a big insurance company. I suppose you could call for an insurance review, but what I am getting at is that it seems like it would be about as hard as selling sombody a CD and the comission is better?
And then you work on geting them to give you the rest of their money.
Life insurance sales are much hard than selling a CD or an investment. When someone buys an investment or a CD, all that they have done is taken money from their left pocket and put it in their right pocket. When someone buys insurance, they are taking their money from their left pocket and giving it to the insurance company.
If you do get "stuck" with the label of life insurance salesman, you will probably make more money than all of your friends with the "financial advisor" label.
If you are going to cold call product specific, I think that life insurance is the wrong way to do it. Have you considered cold calling to set appointments instead of selling a specific product? You should have lots of products in your arsenal. This way, you can be the financial advisor that you want to be.
If you are going to sell insurance, make sure to work for a B/D that does not make you put fixed business through them because you will get absolutely hosed on the commissions.
LIFO insurance is tedious and difficult to sell as a lead product. Half the time the prospect will lie to you about their health and the deal will fall through. They get angry and embarrassed at getting caught out and you will have wasted a lot of your time.
Offering to review existing insurance policies is a good idea. The original agent has probably moved on to greener pastures. Even if you don't sell a new policy, you will have moved into an advisory roll.
Selling life insurance to existing clients is great. Estate planning, equalizing inheritances and business succession planning all use life insurance. Throw in some LTC and disability insurance and health insurance and you are now a valuable asset and advisor to your clients.
I second the motion to put the fixed business in an outside business activity format. Your broker dealer will be no help in doing insurance and will take an override.
Life not LIFO last in first out. Hmmm Freudian slip???
[quote=babbling looney]
LIFO insurance is tedious and difficult to sell as a lead product. Half the time the prospect will lie to you about their health and the deal will fall through. They get angry and embarrassed at getting caught out and you will have wasted a lot of your time.
Offering to review existing insurance policies is a good idea. The original agent has probably moved on to greener pastures. Even if you don't sell a new policy, you will have moved into an advisory roll.
Selling life insurance to existing clients is great. Estate planning, equalizing inheritances and business succession planning all use life insurance. Throw in some LTC and disability insurance and health insurance and you are now a valuable asset and advisor to your clients.
I second the motion to put the fixed business in an outside business activity format. Your broker dealer will be no help in doing insurance and will take an override.
[/quote]Advisory roll? Are those made with semolina?
LOL .....and stuffed with sweetened cream cheese. Yum.
what would be the pay out at a wire on an average term life policy?
[quote=futureadvisor]
What do you guys think about using life insurance as a cold call product just to get people in and build trust. I would guess that most prospects are probably sh*tty but eventually you would come across good ones. You could buy leads for cheep for a somewhat warm call. The commission is pretty good, but you might get stuck being labeled as a life insurance salesman instead of a financial advisor?
[/quote]
Write the script for that call and post it here.
We'll give an honest evaluation.
My personal feel is that it has to many moving parts to make a good lead product. yet, life insurance guys do it all the time and make a good income doing it.
I lead with tax free bonds or fixed income in general. We keep the calls short and to the point looking to set up a second more expansive call by offering to send info. This is known as call/mail/call. If done consistantly it will keep you busy and make you some money.
Let's see your pitch.
[quote=futureadvisor]what would be the pay out at a wire on an average term life policy? [/quote]
Somewhere shy of the cost of any single serving baked good in a Starbucks.
[quote=mikebutler222]
[quote=futureadvisor]what would be the pay out at a wire on an average term life policy? [/quote]
Somewhere shy of the cost of any single serving baked good in a Starbucks.
[/quote]good one mike!
I really have no idea what the pitch would be, I don’t really know the produts, but am just thinking out loud. Is the pay for life insurance really that bad?
[quote=futureadvisor]I really have no idea what the pitch would be, I don't really know the produts, but am just thinking out loud. Is the pay for life insurance really that bad?[/quote]
It's a complicated product and the payout is low. There are plenty of other alternatives. Best of luck.
Insurance commission example.
XYZ insurance company pays a first year commission of 50%. The company pays a 30% override.
The premium for Mr. Smith's life insurance is $1500/year.
If the business does not have to go through a B/D grid, the rep would get $750 + .3 x $750 for a total of $975.
If someone works at a wirehouse and is forced to put it through the grid and they are at a 35% payout level, they would make $750 x .35 =$262.50.
Unfortunately, wirehouse reps often must ignore this (insurance) important part of the financial advising equation due to the lack of compensation.
[quote=mikebutler222]
[quote=futureadvisor]I really have no idea what the pitch would be, I don’t really know the produts, but am just thinking out loud. Is the pay for life insurance really that bad?[/quote]
It's a complicated product and the payout is low. There are plenty of other alternatives. Best of luck.
[/quote]The payout is low for you.....
the most important part in financial planning is the insurance and I bet many of you don’t even include it!
[quote=futureadvisor]
What do you guys think about using life insurance as a cold call product just to get people in and build trust. I would guess that most prospects are probably sh*tty but eventually you would come across good ones. You could buy leads for cheep for a somewhat warm call. The commission is pretty good, but you might get stuck being labeled as a life insurance salesman instead of a financial advisor?
[/quote]
It could be a great move if you position it properly.
Right now in the life insurance world there is a revolution touting SPWL (single premium whole life) as a viable alternative to CDs and annuities for retirees.
Simply put, if you can articulate and demonstrate how the cash accumulation in a single premium whole life product produces a higher spendable yield than CDs or annuities, with lower tax consequences than CDs or annuities, AND with greater liquidity than CDs and annuities then you could come out big in moving "dead assets".
A reasonable method of showing this concept would involve showing a SPWL at 4%, non-qualified annuity dollars at 4.5%, and CDs at 5%. We all know that in a 28% combined state and federal tax bracket that the CDs would yield less than 3.75% to the consumer. Additionally, the annuities do have tax deferred advantages but don't you still have to pay taxes on the growth? This effectively reduces the yield to less than 4% too. How about liquidity? Both CDs and annuities have nasty surrender penalties. However, if they earn 4% in a life insurance contract can't they make "tax free" loans and/or withdrawals at anytime? So at a lower interest rate they have a 4% effective yield. Hey...it ain't what you make...it's what you keep. Additionally...as an added benefit the client would have a tax free death benefit that is higher than their initial premium too. Not a bad deal if they don't plan on spending these assets but would like to have access to them and lower their taxes.
Oops...wrong forum. I am supposed to wax poetic about modern portfolio theory and exchange traded funds and trash anything that is not variable in nature.
Carry on.
Nice to see you’re finally starting to catch up, meno.
I love life insurance, but SPWL is not a viable alternative for CDs and annuities.
SPWL contracts are MECs and all money that comes out are subject to income tax. They can be good for the death benefit, but don't make sense for anyone who wants to access cash.
[quote=mikebutler222]
[quote=futureadvisor]what would be the pay out at a wire on an average term life policy? [/quote]
Somewhere shy of the cost of any single serving baked good in a Starbucks.
[/quote]
Hahaha! Awesome.
[quote=menotellname][quote=futureadvisor]
What do you guys think about using life insurance as a cold call product just to get people in and build trust. I would guess that most prospects are probably sh*tty but eventually you would come across good ones. You could buy leads for cheep for a somewhat warm call. The commission is pretty good, but you might get stuck being labeled as a life insurance salesman instead of a financial advisor?
[/quote]
It could be a great move if you position it properly.
Right now in the life insurance world there is a revolution touting SPWL (single premium whole life) as a viable alternative to CDs and annuities for retirees.
Simply put, if you can articulate and demonstrate how the cash accumulation in a single premium whole life product produces a higher spendable yield than CDs or annuities, with lower tax consequences than CDs or annuities, AND with greater liquidity than CDs and annuities then you could come out big in moving "dead assets".
A reasonable method of showing this concept would involve showing a SPWL at 4%, non-qualified annuity dollars at 4.5%, and CDs at 5%. We all know that in a 28% combined state and federal tax bracket that the CDs would yield less than 3.75% to the consumer. Additionally, the annuities do have tax deferred advantages but don't you still have to pay taxes on the growth? This effectively reduces the yield to less than 4% too. How about liquidity? Both CDs and annuities have nasty surrender penalties. However, if they earn 4% in a life insurance contract can't they make "tax free" loans and/or withdrawals at anytime? So at a lower interest rate they have a 4% effective yield. Hey...it ain't what you make...it's what you keep. Additionally...as an added benefit the client would have a tax free death benefit that is higher than their initial premium too. Not a bad deal if they don't plan on spending these assets but would like to have access to them and lower their taxes.
Oops...wrong forum. I am supposed to wax poetic about modern portfolio theory and exchange traded funds and trash anything that is not variable in nature.
Carry on.
[/quote]
Good call Meno. In addition to standard SPWL there are also products that link a long term care benefit. The clients love this idea. Take 50 to 75K put it into a policy and get an immediate death benefit of 150 to 180K or a LTC benefit pool of money equal to usually twice the death benefit with a residual death benefit IF they have actually used the LTC portion. Many people don't buy LTC because they don't want the premiums that go on forever and are just not convinced that they will ever use the LTC coverage.
This is obviously a strategy for people that have no need to spend the money invested in the policy, but what it does do is free up other funds to invest or spend now that they have covered the DB and LTC issues.
Of course at a wire house, I doubt very much that you have access to these types of products. I use them somewhat frequently with my clients in the age 50 to 60 bracket. Very nice commission too.
babbling looney, as I mentioned earlier, SPWL doesn’t work in comparsion to to annuities and cd’s because the money can’t be taken out tax free because cash taken out of one of these policies is treated as a Modified Endowment Contract and not a life insurance contract.
[quote=anonymous]babbling looney, as I mentioned earlier, SPWL doesn’t
work in comparsion to to annuities and cd’s because the money can’t be
taken out tax free because cash taken out of one of these policies is
treated as a Modified Endowment Contract and not a life insurance
contract.[/quote]
Life insurance is life insurance, it is not an investment. Taking out a
SPWL, and then borrowing against it, is just moving money from one
pocket to the other.
The only way to win with life insurance is to die sooner than expected.
The IRS disagrees with you. SPWL is a MEC which is considered an investment, which quite ironically, makes life insurance in this case a bad investment.
Most Whole Life Policies, on the other hand, are not considered invesments, which quite ironically, make them much better investments than people think. Whole life insurance for someone healthy is a phenomenal long term SAVINGS tool and can allow someone to spend more of their INVESTMENT money in retirement.
[quote=anonymous]babbling looney, as I mentioned earlier, SPWL doesn't work in comparsion to to annuities and cd's because the money can't be taken out tax free because cash taken out of one of these policies is treated as a Modified Endowment Contract and not a life insurance contract.[/quote]
Well, yes and no on making a comparison.
I agree that the borrowing of money from a MEC is not a good idea as there are no tax advantages.
It depends on what the purpose of the annuity or CD is. In many cases if you actually probe you will find that the client is holding a CD or annuity or basically just sitting on the money because they either
want to give the money as an inheritance and don't plan to spend it. they want to equalize inheritances... some kids get the family business the other kids get cash feel they need to have the money saved to cover long term care needs and are scrimping to not spend the CD so the money will be there when they need itIf they want to use it for any of those purposes a SPWL policy will accomplish those goals AND free up a good portion of the cash they are holding in reserve for more appropriate and liquid investments. By having the above goals covered and being able to now actually utilize some of the cash the clients will have peace of mind. Plus, unless the policy is a LTC linked benefit policy, they can even set these up in an ILIT and utilize the estate reduction features. There may be some gift tax considerations, but only if the gift is very large to the ILIT as a MEC.
I also find that most clients have been misinformed about annuities as an estate tool. Yeah they bypass probate, but the beneficiaries get to pay income taxes at ordinary income tax rates on the gain, which can be substantial. In many cases (depending on age of course), if half the money that would have been placed in the annuity is put into a SPWL policy instead, the client's beneficiaries will receive a much larger and tax free inheritance.
If you don't like SPWL or think it is too wimpy, there are some variable contracts out there too. You are doing your clients a disservice if you don't discuss these things. And if you don't talk to your clients about them......you can be sure that I or someone like me will do so. This is also why insurance guys make a lot of money
I've got no problems with SPWL as long as the purpose is for the death benefits.
It often won't work in estate planning situations because of the size of the premiums.
In general, I think that variable contracts blow.
[quote=joedabrkr] [quote=mikebutler222]
[quote=futureadvisor]I really have no idea what the pitch would be, I don't really know the produts, but am just thinking out loud. Is the pay for life insurance really that bad?[/quote]
It's a complicated product and the payout is low. There are plenty of other alternatives. Best of luck.
[/quote]
The payout is low for you.....
[/quote]
We just did a million dollar annuity and got the low wirehouse/regional payout. Everybody made out, but us. What is the payout on insurance products at an Indy?
Fixed or variable? What was the specific product?
The issue is on insurance products is that the B/D is (unfairly) taking a cut of a non-registered product.
If it was a variable product, you probably got treated fairly. If it was a fixed product, you probably got hosed.
The commission is product specific, so your question can't be answered. On a typical fixed annuity, a sale of that size should put 30-40K in your pocket.
At LPL, annuities pay out at 90% with no ticket charges.
If your life business goes THROUGH LPL (using a Bisys or CentreLink), the payout is 90%. If your life business goes AROUND LPL (the insurance company mails you a check directly and LPL knows about it) the payout is 100%. If you use LPL's Insurance Associates to process the term or UL product, then the payout is 100%.
[quote=anonymous]
If it was a variable product, you probably got treated fairly. If it was a fixed product, you probably got hosed.
[/quote]
If it was a variable product, you should have been able to "pick" the commission percentages. Most VAs let you choose to get more upfront, and less in the coming years, OR less upfront, and more in the coming years. If it had those options, they would have been in the application (usually with Letters, option A, option B, etc.)
now_indy, you are correct, but the issue is whether he is getting all of the commission or is the B/D taking a portion. My position is that if it is a fixed product and his B/D is taking a cut, he is getting hosed.
[quote=joedabrkr] [quote=mikebutler222]
[quote=futureadvisor]I really have no idea what the pitch would be, I don't really know the produts, but am just thinking out loud. Is the pay for life insurance really that bad?[/quote]
It's a complicated product and the payout is low. There are plenty of other alternatives. Best of luck.
[/quote]
The payout is low for you.....
[/quote]
I would guess (but feel free to correct me) the payout for term life is low for everyone as the cost is low to the client.
Anon. You are right if the B/D is taking an override on fixed insurance or annuities he is getting hosed.
MikeB. The payout for the first year of term insurance is usually a pretty high percentage of the premium for the first year and then drops to a smaller percentage in following years. The companies will usually also pay a persistancy bonus for contracts that continue to be paid.
Yes the term life insurance premiums are pretty low, but given that there is no override on commissions and that most people who have life insurance tend to keep paying it over a long period of time, I find it to be a good way to have a steady income stream to cover some basic overhead costs.
The first year (12 months) commission pay out on health insurance is 20% of the premium. I plan to add a lot more of this to my book next year.
OK I just looked this up for payout on LBL
Term insurance is anywhere from 75 to 100% pay out on premiums in the first year and no pay out after that. So if the premiums are $2000 I get $1500 to $2000. Other firms pay out 40 to 60% the first year and then 2 to 3% afterwards
UL the payout is from 70 to 75% of first year TARGET premium with a.5 to 3% payout on amounts over target. The following 2-10 years the payout is 2 to 2.75% of any amount of premium paid and from years 11-20 1 to 2.75%.
And just FYI the SPWL I was talking about with the LTC benefit is 7% with 2% trails.
Still think life insurance is for chumps?
[quote=babbling looney]
OK I just looked this up for payout on LBL
Term insurance is anywhere from 75 to 100% pay out on premiums in the first year and no pay out after that. So if the premiums are $2000 I get $1500 to $2000. Other firms pay out 40 to 60% the first year and then 2 to 3% afterwards
UL the payout is from 70 to 75% of first year TARGET premium with a.5 to 3% payout on amounts over target. The following 2-10 years the payout is 2 to 2.75% of any amount of premium paid and from years 11-20 1 to 2.75%.
And just FYI the SPWL I was talking about with the LTC benefit is 7% with 2% trails.
Still think life insurance is for chumps?
[/quote]I am getting a 90% payout on target premium for a UL-G policy that I am just about to close.
[quote=babbling looney]
Still think life insurance is for chumps?
[/quote]
I never thought it was for chumps, I just thought the payout on term policies was small change. The payouts on other forms of L.I. are among the highest paydays there are. Thanks for the information.
[quote=mikebutler222][quote=babbling looney]
Still think life insurance is for chumps?
[/quote]
I never thought it was for chumps, I just thought the payout on term policies was small change. The payouts on other forms of L.I. are among the highest paydays there are. Thanks for the information.
[/quote]
Nevertheless....I still wouldn't recommend using life insurance as a lead call unless you plan to do mostly life insurance. I think the O.P. was asking about it as a lead in for his brokerage cold calling business.
As stated before, insurance is time consuming and frustrating. No quick slam dunks.
[quote=babbling looney]
OK I just looked this up for payout on LBL
Term insurance is anywhere from 75 to 100% pay out on premiums in the first year and no pay out after that. So if the premiums are $2000 I get $1500 to $2000. Other firms pay out 40 to 60% the first year and then 2 to 3% afterwards
UL the payout is from 70 to 75% of first year TARGET premium with a.5 to 3% payout on amounts over target. The following 2-10 years the payout is 2 to 2.75% of any amount of premium paid and from years 11-20 1 to 2.75%.
And just FYI the SPWL I was talking about with the LTC benefit is 7% with 2% trails.
Still think life insurance is for chumps?
[/quote]
And they're going to go after "c" shares in IRA accounts?
I kinda always did (and still do) think the client is the chumpee on those deals! I'm not telling anyone how to sell what or which ethical dilemas exist for whom or anything along the lines of!
I think it is myour (mine, yours, ours) client's best interests that their consultant is still in the bidness next year.
BTW, most of my book is NY State based, so much of the eyepopping stuff is not available in NYS.
Mr. A
[quote=mranonymous2u][quote=babbling looney]
OK I just looked this up for payout on LBL
Term insurance is anywhere from 75 to 100% pay out on premiums in the first year and no pay out after that. So if the premiums are $2000 I get $1500 to $2000. Other firms pay out 40 to 60% the first year and then 2 to 3% afterwards
UL the payout is from 70 to 75% of first year TARGET premium with a.5 to 3% payout on amounts over target. The following 2-10 years the payout is 2 to 2.75% of any amount of premium paid and from years 11-20 1 to 2.75%.
And just FYI the SPWL I was talking about with the LTC benefit is 7% with 2% trails.
Still think life insurance is for chumps?
[/quote]
And they're going to go after "c" shares in IRA accounts?
I kinda always did (and still do) think the client is the chumpee on those deals! I'm not telling anyone how to sell what or which ethical dilemas exist for whom or anything along the lines of!
I think it is myour (mine, yours, ours) client's best interests that their consultant is still in the bidness next year.
BTW, most of my book is NY State based, so much of the eyepopping stuff is not available in NYS.
Mr. A
[/quote]
I don't do much life insurance except in conjunction with estate planning or business successions. When I do those, however, it does pay well.
Frankly life insurance is a big pain in the rear. It takes forever. You have to constantly be on the phone to the Doctor's office to get the medical information in time. The paramedics are usually backed way up in our area, thusly giving the client plenty of time for second thoughts. Half the time the clients lie to you about their medical conditions and the underwriting comes in much worse than anticipated and the premiums are much higher than you quoted. You have to continue to remind the client about the value of the insurance and keep the client paying the premiums, unlike a mutual fund or stock which is often just a one time investment. You need to monitor the policy to make sure it doesn't collapse if interest rates rise or if the variable accounts are tanking. You may need to ask the client to pay more premiums if they didn't overfund the policy in the beginning or decided to go on the cheap and just pay the bare minimum. That goes over real well.
It just goes on and on and on.
I think we earn the money in life insurance.
oops I mean interest rates go DOWN.
Anyway.....I'm outta here.... Happy New Year everyone.
[quote=anonymous]
Fixed or variable? What was the specific product?
The issue is on insurance products is that the B/D is (unfairly) taking a cut of a non-registered product.
If it was a variable product, you probably got treated fairly. If it was a fixed product, you probably got hosed.
The commission is product specific, so your question can't be answered. On a typical fixed annuity, a sale of that size should put 30-40K in your pocket.
[/quote]
It was a variable product. My partner did the sale so I don't have anything in front of me at this moment to give specifics. I 'll say this, we didn't get anywhere near 90% payout.
A 90% payout would only be possible on life insurance, not an annuity. A variable annuity would pay roughly 3-6% to your B/D. It would then have to go through your grid.
And they're going to go after "c" shares in IRA accounts?
I kinda always did (and still do) think the client is the chumpee on those deals! I'm not telling anyone how to sell what or which ethical dilemas exist for whom or anything along the lines of!
I think it is myour (mine, yours, ours) client's best interests that their consultant is still in the bidness next year.
BTW, most of my book is NY State based, so much of the eyepopping stuff is not available in NYS.
Mr. A
Mr. A, can you please explain your post. I don't understand it. Are you saying that the client is getting screwed because of high commissions? If that is the case, I would actually argue that the high commissions are there because the insurance companies have found this to be the LEAST EXPENSIVE distribution method, thus giving the best value to the client. Have you noticed how no load insurance products are not any cheaper, and in fact, perform worse.
Babbling Looney,
I'm going to take some time to beat up on your post. Please don't take it as a personal attack. It's meant so that you can learn. You seem to really care about your clients.
I don't do much life insurance except in conjunction with estate planning or business successions.
All of your clients are going to die. If you are going to be their financial advisor don't let another advisor get a piece of your client. They will if you don't take care of the insurance issues for everyone. This includes disability insurance and long term care insurance.
You have to constantly be on the phone to the Doctor's office to get the medical information in time.
Let the insurance company handle this for you. This should not be an issue. If the doctor's office is being slow, have the client call. Releasing medical information is a profit center for the doctors.
The paramedics are usually backed way up in our area, thusly giving the client plenty of time for second thoughts.
This shouldn't be happening. The paramedical companies are in competition with each other. Make them give you great service. Preset the exams. "Mr. Client, is Tuesday at 3:00 a good time for you to be examined or would another time work better?" Then, with the client still in your office, call the examination company and say, "I have Joe Jones in my office. We need an examiner to see him Tuesday at 3:00." If the company that you are using is not giving you great service, pull your business from them. Honey also works. ie. Treat the parameds like gold. They can be of great help.
Half the time the clients lie to you about their medical conditions and the underwriting comes in much worse than anticipated and the premiums are much higher than you quoted.
You must take the blame for this. This won't happen if you drill it into your client's head that all of their health history will be seen by the insurance company. Tell them that you must know EVERYTHING about their history. You are the expert and you will use your expertise to make sure that you use the best insurance company for that person based upon their health history. Doctors and insurance companies look at things very differently.
It also sounds as if you don't have the necessary expertise to match the right client with the right insurance company. Your quotes should almost always be worse than what the client receives instead of the other way around. Under promise and over deliver. When you become an expert in life insurance, you'll learn to sell coverage without giving a quote.
You need to monitor the policy to make sure it doesn't collapse if interest rates rise or if the variable accounts are tanking. You may need to ask the client to pay more premiums if they didn't overfund the policy in the beginning or decided to go on the cheap and just pay the bare minimum.
Again, this is completely your fault. Don't sell UL and VUL contracts. The client almost always gets screwed on these policies. I can't imagine a worse place to take risk (investment risk or interest rate risk) than in someone's life insurance policy. Don't believe me? Find one person who has had a policy for more than 20 years and the policy is not in danger of lapsing. Sell life insurance for the guarantees. Use old fashioned whole life and term insurance. The only ones who do well with UL/VUL are the insurance companies.
UL and VUL are especially inappropriate for the business and estate planning market. The exception is GUL for older ages, but I'm assuming that you are not referring to this since you mentioned interest rates.
You owe it to yourself and your clients to become an expert in these areas. In the meantime, find a mentor. Split the commissions with that person while you learn.
There's a saying that I like. "Learn for your clients instead of on your clients." Don't let your clients be guinea pigs as you learn the business.
It just goes on and on and on.
I think we earn the money in life insurance
Well said Mr. A. I just read this post and have to agree that you are absolutely dead on in your analysis of life insurance.
[quote=DodgerDraftpick]Well said Mr. A. I just read this post and have to agree that you are absolutely dead on in your analysis of life insurance.[/quote]
Right…because you’re such a seasoned veteran and expert and all…
[quote=anonymous]
Babbling Looney,
I'm going to take some time to beat up on your post. Please don't take it as a personal attack. It's meant so that you can learn. Gee thanks.... You seem to really care about your clients.
I don't do much life insurance except in conjunction with estate planning or business successions.
All of your clients are going to die. If you are going to be their financial advisor don't let another advisor get a piece of your client. They will if you don't take care of the insurance issues for everyone. This includes disability insurance and long term care insurance. This is true and why I am looking to bring on an associate who will specialize in the insurance side.
You have to constantly be on the phone to the Doctor's office to get the medical information in time.
Let the insurance company handle this for you. This should not be an issue. If the doctor's office is being slow, have the client call. Releasing medical information is a profit center for the doctors. The time frame to get the doctors office to repsond is too long and sometimes clients get cold feet on their insurance and back out. The exeption of course is the estate plans where people know they need to be covered and stick with it. The insurance companies put the policies in some sort of slow conveyor belt process and weeks go by before the check again. I don't have the patience for this or the time to call the insurance companies and keep checking up on the progress.
The paramedics are usually backed way up in our area, thusly giving the client plenty of time for second thoughts.
This shouldn't be happening. The paramedical companies are in competition with each other. Make them give you great service. Preset the exams. "Mr. Client, is Tuesday at 3:00 a good time for you to be examined or would another time work better?" Then, with the client still in your office, call the examination company and say, "I have Joe Jones in my office. We need an examiner to see him Tuesday at 3:00." If the company that you are using is not giving you great service, pull your business from them. Honey also works. ie. Treat the parameds like gold. They can be of great help. You live in a different area than I do. The closest paramed service is over 500 miles away and they subcontract to individuals who have to drive several hundred miles to do paramedic exams and do them at their convenience. I have gotten the paramedic companies to send a kit to a local doctors clinic or the local hospital, however that takes time, and the client has to set up an appointment which can take days or even weeks.
Half the time the clients lie to you about their medical conditions and the underwriting comes in much worse than anticipated and the premiums are much higher than you quoted.
You must take the blame for this. This won't happen if you drill it into your client's head that all of their health history will be seen by the insurance company. Tell them that you must know EVERYTHING about their history. You are the expert and you will use your expertise to make sure that you use the best insurance company for that person based upon their health history. Doctors and insurance companies look at things very differently.
It also sounds as if you don't have the necessary expertise to match the right client with the right insurance company. Your quotes should almost always be worse than what the client receives instead of the other way around. Under promise and over deliver. This is true. I usually quote at standard or even less if it is apparant that the client is not being forthcoming about their health. I also make sure the clients know that the quote is just an estimate and that the underwriters will determine the actual quote when they have looked at the medcial history. When you become an expert in life insurance, you'll learn to sell coverage without giving a quote. Right....you always buy things without knowing at least a range of prices?
You need to monitor the policy to make sure it doesn't collapse if interest rates rise or if the variable accounts are tanking. You may need to ask the client to pay more premiums if they didn't overfund the policy in the beginning or decided to go on the cheap and just pay the bare minimum.
Again, this is completely your fault. Don't sell UL and VUL contracts. The client almost always gets screwed on these policies. I can't imagine a worse place to take risk (investment risk or interest rate risk) than in someone's life insurance policy. Don't believe me? Find one person who has had a policy for more than 20 years and the policy is not in danger of lapsing. Sell life insurance for the guarantees. Use old fashioned whole life and term insurance. The only ones who do well with UL/VUL are the insurance companies.
UL and VUL are especially inappropriate for the business and estate planning market. The exception is GUL for older ages, but I'm assuming that you are not referring to this since you mentioned interest rates.
Large whole life policies for people who are in their late 50's are just too costly. GUL is a relatively new development. Better some insurance in a UL or even in a term policy than none at all. Many of the policies that I am looking at that are in danger are the older ones: ULs sold by a hit and run agent. The clients paid just the minimum premium and now need to put more in. I agree that Variable Life is incredibly risky.
You owe it to yourself and your clients to become an expert in these areas. In the meantime, find a mentor. Have one. He is my up-line. Split the commissions with that person while you learn.
There's a saying that I like. "Learn for your clients instead of on your clients." Don't let your clients be guinea pigs as you learn the business.
It just goes on and on and on.
I think we earn the money in life insurance
I'm too busy managing investment portfolios to spend another lifetime to become an insurance expert. I realize that I don't want my clients to go elsewhere for their insurance needs, so I do offer it myself. Even though I hate the process.
Sigh....I really need to find that associate.
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