The leadership team of a life insurance agency has gathered for its quarterly planning meeting. Their topic for today: How to help agents increase production across the various lines of business. Of course, that topic has been on the agenda for every meeting since the inception of the agency. However, the ways and means of increasing production are constantly changing, and the agency wants to stay ahead of the curve.
The team always invites two top agents to participate in these meetings. They like to invite one who’s a seasoned veteran and one who’s relatively new in the business. They look to the agents for field perspective on the team’s plans and programs.
The focus of today’s meeting is on marketing for the “merely well-to-do.” This broad part of the demographic is comprised of individuals who make or made a very nice week’s pay, are in the accumulation or conservation stages of their financial lives and are very worthwhile prospects for a broad range of insurance products and services.
A member of the team goes to the white board and writes at the top, “Empowering You for Success in 2024.” Below that line, the team member creates these columns: life insurance; long-term care (LTC) insurance; annuities; and life settlements. The team member explains, “We have the products, the full support of our carriers, all the marketing materials and outstanding support services for our agents. But as we look at each of these lines of business, what else should we be providing so agents can be successful with the knowledgeable, inquisitive and, frankly, often skeptical prospects in this market?”
The newer agent chimes in, “I’ve been working in the higher end of this market for a a few years now. I don’t know what’s going on out there, but I’ve never encountered as many prospects who listen to my approach and say, “We’ve heard it before, meaning your talking points. We need you to get down to business. Tell us why what you’re selling makes financial and tax sense for us today and will make sense tomorrow. We read about those products in the financial advice columns and social media, and we know people who’ve bought them. Some are happy, some aren’t. So, you have a lot of informing and persuading to do, not just about the products but also why we should trust you and buy from you.”
The veteran agent adds, “I agree about the higher end of this market. The old power phrases just aren’t so powerful anymore. What used to disturb prospects now seems to insult their intelligence. Even their body language says, ‘Gimme a break.’ We need a better approach, one that creates the basis for a dialogue that’s crisp, incisive and appealing to smart, inquisitive people who think they don’t have much margin for error with their money. So, I like your idea of breaking things down by product line because each calls for its own dialogue.”
Life Insurance
Another team member intones, “I just read two articles, “Life Insurance Planning for the Merely Well-to-Do” and “A Boomer at the Crossroads of a Vintage Policy.” I bring these up because an agent said to me recently, ‘We’d sell more if they just understood our products better.’ While that’s undoubtedly true, there’s much more to it than that. Prospects need to see the many roles that permanent life insurance can play in the course of their financial lives. If the dialogue with the prospects doesn’t open their eyes and mind for what life insurance can do and how it can do it, both for today and tomorrow, the agent will never get to product.”
The veteran says, “That’s exactly right! We have to speak to the real, long-term financial and tax advantages that life insurance can bring to the table. We can’t sound like we’re reading to them from an industry flyer. We have to deliver a cogent recitation of how and why having a well-funded policy at retirement, for example, will give the prospect more financial flexibility and security at a time in their lives when both of those are at a premium, no pun intended. I just don’t think most agents can do that. They’re too preoccupied with product.’
The team leader offers this suggestion, “Let’s plan on doing a one-hour webinar for our agents covering these issues. We should take a kind of timeline approach to highlight the ways and means that life insurance can address needs and create opportunities throughout life. That’s the visualization and optionality from the first article and the more in-depth look at that optionality from the second article.
The newer agent suggests, “How about using a prospect-agent role play format rather than a static presentation? That way, in addition to all the substantive points we want to get across, we can have the prospect pose some thoughtful but tough objections that the agent will have to respond to just as thoughtfully. The webinar should portray the conversation as it unfolds out here in the field. We should also tell whoever’s presenting to assume that the prospects’ advisors are listening in when they engage the prospects in the dialogue.”
LTC Insurance
“It’s interesting,” says the veteran. “Not that long ago the challenge was to get prospects to acknowledge the likelihood of need of some kind of care, its cost, the limitations of Medicare and so forth. Now, I get very little pushback on those points. The conversations are at a much higher level. And like life insurance, prospects are reading and talking to the friends about the pros and cons of LTC products, concerns about pricing and, most recently, concerns about how claims will be handled.”
“Frankly, the LTC conversation is much more challenging than any life insurance conversation. With life insurance, the claim is triggered by a single event—death. LTC insurance is a whole different kettle of fish altogether. What’s more, the conversation involves different levels of care and associated coverages. Then you overlay the spectrum of products that provide the benefits. All of this is unfolding against a backdrop of what the prospects perceive as an evolving LTC scene. In fact, I just had a prospect ask me, ‘How do I know that the product I buy today will pay benefits for the way LTC services are provided years from now when I could need them?’ There’s obviously a good response to that, but I’m just talking about the perceptions and concerns that I’m encountering.”
The team leader responds. “I hear you. In fact, I’ve encountered all that with some in my own family. It’s remarkable how much more willing they are to talk about death than LTC. Anyway, if there’s ever been a topic that lends itself to a webinar, it’s this one. I’d do a role play with an agent talking to a savvy, skeptical prospect, maybe one who’s been dealing with LTC issues for an elderly parent. I think that approach would be more effective than a pure presentation because we could build in realtime feedback and objections that agents are likely to encounter. Also, we’d give agents some ideas about how to expand their own value proposition to cover the assistance they provide when benefits are triggered and claims submitted.”
Annuities
The newer agent, “Since we seem to be going in the direction of one-off webinars, here’s an idea for annuities. The biggest challenge we have with annuities isn’t explaining them to prospects. Whether immediate or deferred, prospects seem to get it and fairly quickly. The challenge comes from investment advisors or tax advisors, especially investment advisors who like to think they’re tax advisors without portfolio, pun intended, or tax advisors who like to think they’re investment advisors without portfolio, ditto. Some of those objections are founded in competition for the prospects’ dollars, and some are founded in tax technical arguments for how annuities are treated during life and at death as compared to other financial products.”
“So, if you want to do a webinar, set up point-counterpoint between an agent and an investment advisor and then an agent and a tax advisor. These advisors have very well-honed objections to annuities that agents need to be able to counter with well-constructed points of our own. Again, it’s a contact sport. So, the more realistic the exchanges, the more useful the webinar will be to us. That means, don’t soft pedal it because you’re worried about making us uncomfortable.”
Life Settlements
The agents tell the team that they generally don’t encounter prospects who need to sell their policies to finance LTC costs or retirement in general. That’s not their market. Their prospects view life settlements as a financial planning tool, often with emphasis on investment planning.
They go on to share a couple of observations. First, if the tax laws really do sunset after 2025, there will be less interest in life settlements, and not just among those who’ll all of a sudden have taxable estates. The higher end of the merely well to-do market, which will also be impacted by the income tax side of sunset, will gain a new appreciation for the tax and economic value of their cash value policies. It’ll be kind of perverse, but many of these policyholders will tell us that the life settlement industry was right. Their policies are absolutely worth more than they realized. And that’s why they’re going keep them!
One agent says, “Life settlements are an important tool to have in our repertoire. But like every other aspect of our business, we need to do them right. That FINRA statement from last year about life settlements was a shot across the bow about covering all the bases when we take a client through the process.”
A team member proposes another webinar. “This one would cover the life settlement process, though more from the agent’s perspective than the life settlement company’s. Where do we begin, what do we do next and how do we know we’re done, all with that FINRA statement in mind. Again, we’ll use a role play, with the agent and maybe one of our people on the life settlement desk engaging in a ‘frank and constructive’ dialogue with a savvy client and their tax and investment advisors. A key objective of the role play and dialogue should be to show where and how the agent adds value to the process. That’s something that doesn’t get enough attention.”