WHIP. Snake Draft. H2H. PPR. There is an excellent chance that either you or someone you know is familiar with these terms. They belong to the ever-growing lexicon of fantasy sports.
More of a competition of mathematics, analytics, and gamesmanship than an appreciation or devotion to actual sports, fantasy sports has become a phenomenon since its advent 32 years ago, with an estimated 29 million participants in the US and billions of dollars exchanged annually.
For the uninitiated, fantasy sports is a hobby (obsession might be a more apt description) in which participants gather together to form a “league” and assemble fictional teams of real life players in a specific sport. Each league-member then competes based on the cumulative real-life statistical performance of their assembled team.
Real life team affiliation or team performance does not matter. For example, you can “own” both Albert Pujols and Derek Jeter on the same fantasy team, and if Albert Pujols hits a home-run, it does not matter whether the Cardinals won that game. Beyond those basics, the particular rules of each league and scoring methods vary greatly.
Introduced to the world of fantasy sports during college, I have been enthralled since, participating in numerous leagues that track the NBA, NFL and MLB. It has also introduced me to many new friends and acquaintances. Fantasy sports attracts an eclectic demographic – in my fantasy baseball league alone, membership includes a respected rabbi, an octogenarian engineer, a young producer for a popular cable drama, a father and teenage son tandem, a high school English teacher, and of course, an insurance agent.
Fantasy sports remains as fun and interesting to me as when I started. It is my escape from the rigors and stresses of everyday life. It has also taught me these important lessons, which have carried over to my professional life. Hopefully, they will also prove to be of value to you:
1. Know And Understand The Rules
Knowing and understanding the rules often makes the difference in many hard-fought fantasy-sports leagues. Every league has their own unique and sometimes peculiar rules and scoring methods — whether this involves setting lineups, adding/dropping players, trades, scoring categories, or how and when the league champion is determined. My aim as a fantasy strategist is to learn the rules, never be caught off-guard, and use that knowledge to further my team’s interests.
Likewise, in its essence, life insurance and financial services is dependent on understanding the rules, and the exceptions to those rules. For example, it is vital to be fluent in the fluid laws regarding the federal estate and gift tax system. The changes passed in December, 2010 are extremely relevant to life insurance sales. The new limits and rates regarding the federal estate tax, the re-coupling of gift and estate exclusion limits, and the introduction of portability between spouses for this exclusion are all essential to consider.
In addition to the federal estate tax, there are a multitude of other rules that govern life insurance and are important to understand. For personal insurance, examples include knowing the advantages and disadvantages of various qualified plans, ensuring your client does not violate the transfer-of-value rule, and being aware of the limits of generation-skipping. Just as I would not enter a fantasy-league without carefully parsing the rules to make sure I am not caught unprepared, how can I offer advice on crucial life decisions without knowing and understanding those rules?
Knowing the rules also manifests itself in other areas. For example, before offering a professional recommendation, a complete and thorough fact-finder is essential. Beyond the basics of a personal client’s income and net worth, I try to find out as much as about their personal and financial situation and objectives as they are willing to share.
If the client is a business, it is useful to know its worth, ownership, and prospects. In fantasy, I would not draft a high-scoring NBA player like Carmelo Anthony in a league where points scored did not matter. To wit, I recently spoke with a new client, a divorced mother with a modest income and assets, who had a small term policy that was ending. We discussed the merits and costs of purchasing a new small term policy for the benefit of her teenaged children, and applied for that policy.
It was only after attempting to place the policy that she felt comfortable enough to share that her ex-husband was financially secure and she considered her children well protected. This began a discussion over her priorities. While she had been initially interested in term insurance, she was instead more interested in long-term care insurance, as the prospect of bearing those expenses alone were of greater concern. Those were her rules.
2. Timing Is Key
Every fantasy-team owner knows that with trades and free-agents, timing is crucial. As with any commodity, a player’s value changes during the course of a season. If an undrafted rookie or unheralded journeyman has an extraordinary game or week, his trade-value immediately increases.
A player who is unexpectedly injured loses value overnight. A fantasy neophyte can predict that Peyton Manning is going to have a great season and draft him in the first round, but having the skill and fortune of buying low and trading high is often where leagues are won and lost.
Similarly, timing is fundamental in sales. Many things can change from the beginning of a sale to the end. As we have all probably experienced in the last few years, a client’s personal and financial situation can change rapidly, whether due to the general economic climate or the most unusual of circumstances. On the product end, especially in this low-interest rate environment, changes can happen suddenly as well – both in the general marketplace and within each carrier’s product portfolio.
There have been many outstanding products that I wish I would have had time to introduce to all of my clients, but when suddenly pulled from the market, there was simply not enough time to personally contact each one. The lesson of fantasy sports is not to wait – when a product is truly exceptional and beneficial for a client, that moment is the time to act. Treat each day as if it was the last a product is available, because it might be true.
3. Be Fair And Reasonable
Fantasy sports leagues generally allow trades among teams, mirroring how “real” teams can make transactions. Many fantasy-owners know the immense feeling of elation of having a trade offer accepted that they are convinced is clearly tilted in their favor. However, this type of exchange is rare. More typically, fantasy owners know the feeling of disappointment and even anger of receiving a trade offer that appears blatantly unreasonable.
Even if the offer was intended as a starting point to an honest trade negotiation, it creates an adversarial relationship – instead of a partnership. In my experience, my most frequent trade-partners have been teams that even when I am not interested in their trade offers, I recognize that the offer was designed to improve both squads. I am then more likely to offer trades to those teams, because I know that any reaction or counter-offer will be reasonable. We might wind up disagreeing on player valuation and not completing a trade, but I avoid the aggravation of being offered Darko Milicic for Dwyane Wade.1
The same principles of fantasy-trading hold true in every business, including life insurance sales. While it is axiomatic that we always should be fair and reasonable with our clients and carriers, I think sometimes we lose sight that we should consider them as long-term partners. As such, there may be value gained from the cases we do not complete.
When reviewing a prospect’s in-force policies, if the in-force insurance is appropriate and properly structured, a recommendation to keep things as is earns credibility which may lead to future opportunity and referrals. Likewise, complete disclosure with carriers is also essential, even if it interferes with the sale of a particular case. In addition to being the ethical business practice, it helps build a strong enduring relationship with a carrier.
I am not suggesting we should not ask our carrier for a bump to a preferred rating when perhaps standard is more justified, or show a client who can afford it and has a need for it a large permanent policy, but fantasy sports reminds us that you do not want to be the agent offering Milicic – because you know what is like to be on the receiving end of that offer.
4. Keep Up To Date
While is entirely possible to win a fantasy league by being extremely lucky in a draft, usually the champion is an active owner who keeps up-to-date in managing his or her team. Throughout the season, that owner makes the necessary adjustments to lineups, based on injuries, performances, and matchups.
For instance, if you own a mediocre pitcher who has the benefit of playing in a pitcher-friendly home stadium, you might not play him on the road at Yankee Stadium. Similarly, you might spend time monitoring the statistics of minor league Triple-A teams and preparing to pounce on whichever hot prospect is promoted.
Keeping up to date is also paramount to success in insurance sales. In addition to following and understanding the recent changes in the estate and gift tax laws, insurance carriers are constantly turning over their product portfolio and underwriting guidelines. Even in this low-interest rate environment where products are generally being removed or made less attractive, many carriers still have niches which make them exceptional value for the right client.
current examples include being especially liberal on family history, offering non-smoker rates for non-cigarette tobacco use, or permitting ?1035 exchanges on policies that have a significant loan against them. As in fantasy sports, by keeping up to date with what is going on in the marketplace, being an “active owner”, and keeping our clients informed, we can create opportunities.
5. Utilize Advances in Technology
When I began playing fantasy sports, the primary resource for compiling stats could be spelled in eight letters: USA Today. We would add up the totals by hand, and then send an update letter to each team. That seems almost quaint now. In 2011, we engage in online leagues where the stats are calculated for us and stats for each game can be monitored live (indeed games can be watched from our computers and even our phones). We can draft, trade, and communicate with each other instantly.
There are a myriad of excellent web sites that offer vital fantasy analysis and news. Even ESPN television has fantasy news streaming on the bottom of its screen letting us know of relevant fantasy news. It is not an exaggeration to proffer that the rise of fantasy sports is directly a result of the ease and features of modern technology.
Just as fantasy sports have become more accessible because of technology, utilizing advances in technology can also help further insurance sales. Besides the ability of agents and consumers to instantly gather quotes and information from different carries instantly, which has undoubtedly resulted in lower cost premiums, there are many new sales tools available to agents.
Many carriers offer webinars and on-line marketing tools designed to familiarize agents with new products and concepts. Additionally, for carriers and general agents who want to better communicate, online newsletters are another opportunity to disseminate information. Knowledge creates opportunity, and utilizing technology is a great asset in gaining knowledge.
6. Be Creative And Able To Adapt
If you talk to a seasoned fantasy-owner, many will proudly share what they consider their own successful fantasy strategies that they consider brilliant. While not all strategies are brilliant, I think that just the routine act of adjusting to changing circumstances and adapting from original strategy is itself a creative feat that can win a league. Fantasy sports are not a science, and a team that does not adjust to injuries or underperforming players faces an uphill climb.
Likewise, there are often bumps in life insurance sales. My most rewarding cases have often been ones that did not go as expected. Whether due to unexpected underwriting decisions or changes of personal or financial circumstances, this means looking anew at the different variables of a policy (length of policy, face amount, state of application, etc.), to see if one can be designed to better meet the client’s best interests.
For example, if a client is underwritten worse than expected, then there may be an opportunity to review existing in-force term policies, to review its conversion options. It might also necessitate looking at survivorship insurance or their spouse’s individual insurance, which may not have been previously considered. And as demonstrated in the example found in my first comparison, a failed term sale might lead to a long term care opportunity.
Matthew I. Zik, JD is a principal of The Strauss Agency, Inc., New York, N.Y.