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Life Health > Life Insurance

Making Life Insurance Sales In Tougher Times

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No one wants to mention the “R” word, even though it’s on everyone’s mind and news outlets all over the world talk about it daily. Most of us, particularly if we are in sales, like to act as if ignoring economic pain will help us succeed. We want to be positive even when surrounded by negativism. To many, that may seem terribly naive. But is it? Come to think about it, there may be more truth to it than we can possibly imagine.

“People who expect to succeed perform better than do those who are less optimistic,” write researchers Jonathon D. Brown, Ph.D., and Margaret A. Marshall, MS, in Great Expectations: Optimism and Pessimism in Achievement Settings. Why is this the case? “In large part, this is because people with high expectancies of success work harder and longer and adopt more effective problem-solving strategies than do those who are pessimistic about their experiences of success.”

They conclude a discussion of their findings this way: “Although pessimism can have positive consequences under some conditions, optimism seems to be more beneficial. People who hold positive beliefs about their ability generally fare better than do those who are pessimistic.” Financial advisors and insurance salespeople — and everyone else for that matter — benefit from being positive, no matter what may be happening all around them.

After four decades in the business, my experience, for what it’s worth, indicates that there is every reason for those in life insurance sales to be optimistic, even in tough times. I base this conclusion on the fact that life insurance is an economically insulated product. Life insurance is a unique asset class that is uncorrelated to changes in the equity, bond, commodity, and real estate markets.

To suggest that life insurance sales is unaffected by negative economic conditions may seem daring and perhaps even somewhat softheaded. But that’s not so. We have worked with producers over the years who have been consistent in their sales through the worst and the best of times. Whatever the situation, they forge ahead, undeterred by external circumstances. There are good reasons for such success. For one, life insurance is a bulletproof business, one that possesses inherent value for the consumer in good times and bad. Sometimes we are so close to life insurance we fail to see its benefits.

Life insurance guarantees are significant. At the top of the list is the promise to pay. It’s worthwhile reminding ourselves that the life insurance industry has never reneged on that promise. It’s no exaggeration to state that life insurance, for all practical purposes, is a 100% safe purchase. That, in itself, should give us enormous confidence in what we do every day.

If that isn’t enough, life products possess immensely beneficial tax advantages that, when our clients understand what this means, make life programs extremely appealing. A life policy will provide a very solid internal rate of return (IRR) at life expectancy when comparing paid premiums to the death benefit. There will be significant benefits beyond the IRR on death when applying the leverage available with gift and estate planning techniques.

It’s true that “order taker” agents can have a particularly rough time during economic slumps. These are producers who view life insurance as a commodity and passively skim sales from their clients and prospects without providing much needed value-added services. With a defensive attitude and approach, an agent will lose ground, especially in times like this. The market has no room for the lazy or passive producer who fails to have a well thought-out plan of action.

In good times, it’s easy to convince ourselves that our success is the direct result of our outstanding sales capabilities. To put it bluntly, even mediocre producers can look good in good times. The choice to prosper is entirely up to those advisors who are willing to evaluate their practices so they bring knowledge, creativity, and sound strategies to the life issues of their clients.

We often miss a critical point in life insurance sales: In uncertain economic times, clients are more highly focused on preserving financial resources and making them more secure. In these circumstances, they are looking for solutions that will give them confidence that the future is sound and solid. In other words, there is enormous opportunity for producers if they seize it.

Here are suggestions for success in tough times:

1. Ask yourself hard questions: What is my target market? What is my unique value proposition for this market? Do I need to hone my skills and broaden expertise? Do I know this market as well as necessary to compete and win?

2. Hone your skills in marketing yourself and your products. Are your sales skills as good as you think they are? Have you laid out your blueprint for prospecting calls, appointments, and re-sales to your existing clients? Could you benefit from coaching?

3. Keep track of your results. If you’re not satisfied, take steps to make changes.

4. Manage your time ruthlessly. Wasted time equals lost sales.

5. Having target markets is essential in focusing your time, energy, and expertise. This means cultivating the right people and requesting the right referrals.

6. Annual policy reviews are critical and should be performed with more diligence than ever, always listening for opportunities. It is so important to stay with your customers and be ready to provide help when they need it. To do this, review family needs for income protection and estate planning, and do reviews with your business clients as well. This is how clients come to understand and appreciate the value you bring to them. Let clients know that you offer a unique product, one that provides safety so that it may warrant moving assets.

7. Consider entering into partnerships with other professionals, so that you can access specialized markets requiring particular expertise. Stay close to other producers who you admire and who are willing to take the time to work with you. Mentoring is an effective short-term and long-range strategy for professional growth.

8. Look for ways to influence your target market and individual prospects. Be an innovator. Lead with seminars. Seek out opportunities to speak in public.
In the final analysis, it’s life insurance itself that drives a positive attitude. As financial and life insurance professionals, we must recognize that our product always delivers on its promise, and that’s the reason why you and I can succeed no matter what the times or circumstances.

Allan D. Gersten, CLU, CFP, ChFC, is chairman of First American Insurance Underwriters, an insurance brokerage that specializes in supporting agents in all 50 states with life insurance, long-term-care, and annuity products from more than 50 insurance companies. Mr. Gersten has been in life insurance sales since 1969 and can be reached at 800-444-8715, or [email protected].


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