Selling final expense: 7 fundamental steps every new final expense agent must follow
With more than 10,000 Baby Boomers turning 65 each day for the next two decades, it's no surprise that the final expense burial insurance business is booming and increasingly attracting both newly licensed agents as well as experienced agents.
Nevertheless, even with the great financial opportunities that final expense allows for those who work hard and focus on mastering their craft, it is important to understand that the simplicity of this business is deceptive, and that having the proper mindset is paramount to succeed in both the short and long term.
What follows below are seven fundamental steps all aspiring final expense agents need to adhere to in order to maximize their success selling final expense. As many experienced final expense agents will share, much of this knowledge is learned after the fact – sometimes at a high price – so taking heed to the following bits of advice will make your beginning and future career in the final expense business more smooth-sailing and less frustrating.
1. Partner with an agency specializing in final expense.
New final expense agents need to work with an agency specializing in selling final expense, as the market is uniquely different in terms of clients, marketing, and the sales process. Very commonly, experienced life insurance agents with no final expense sales experience are surprised at the difference in selling and marketing in the final expense niche relative to other products they have prospected to and sold.
What most agencies do – especially those more interested in recruiting than training and agent development – is focus on trying to be everything to everybody, when in reality, they end up being "nothing to nobody!"
If an agency recruiting you is awash with different product offerings, you will find that they will not be masters of any of them and in the final expense business, you MUST focus on becoming a master of final expense to realize financial success.
Here's the takeaway point: If you're looking at an agency, make sure that this agency is completely focused on specializing in selling final expense. If they begin to talk about cross-selling annuities, IUL products, and other exotic life insurance products, beware! Usually that means they don't have the experience to intimately understand final expense, thus they cannot intimately TEACH final expense to you!
2. Become an independent agent, NOT a captive agent!
For those of you unfamiliar with what the terms “independent” and “captive” mean, let me explain.
The terms independent and captive describe the relationship the agent has to his agency. A captive agent typically works for a single carrier and is not allowed to represent multiple carriers. Many times, captive agents have onerous contractual obligations that limit their future renewal income if they terminate their relationship with their singular carrier.
On the other hand, an independent agent is the exact opposite. Independent agents make their own decisions as to which carriers they want to work with, and they negotiate their own commission levels.
The best route for most final expense agents is to partner with an independent agency. Why is being an independent agent better than being a captive agent? The nature of final expense insurance sales is that, a) each prospect has a unique health situation that not all carriers can give both the best price and value, and b) force-feeding limited carriers onto your clients that don't give the best value and price will ultimately result in you losing your business to someone else who can get your client a better plan.
Captivity as a final expense agent reduces your income; independence increases your income opportunity, given the same amount of effort and work detail. Plus you do a better job by your customer with improved product selection.
Take, for example, a case I just finished writing the other day. The prospect had COPD and also smokes. She had recently purchased a final expense plan from a well-known captive carrier. Reviewing her policy, she had a two-year natural death waiting period and was paying close to $90 a month for her policy. Bottom line, this prospect was NOT fully covered by her existing carrier, plus she was paying a boatload, too!
Being able to pick and choose which carriers I work with, I picked the company with the lowest premiums for COPD smokers. Not only can I get her a price for $47 a month for the same amount of coverage as the other guys, but I also got her first full day 100% natural death coverage.
This is an example of what will make you a hero to your new client because not only are you improving the value of their coverage, but you are also dropping her price dramatically, making much more comfortable and likely over the long run for your client to keep the policy you sold her. Only an independent agent can optimally help clients who are in a position like this, which is why I believe becoming independent is fundamental to your success in selling final expense insurance.
• Editor’s Note: This article was submitted by Insurance Forums member David Duford (Screen name: Rearden). To comment on these 7 fundamentals or add your $.02, please visit this new thread in the Final Expense Forum: 7 fundamental steps every new final expense agent must follow
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