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Life Health > Life Insurance

The 21st century agent’s guide to selling life insurance

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It’s essential that brokers who sell by phone using Internet leads track their metrics in order to know if sales and processing are in line with industry benchmarks. This is the single-best way to diagnose pitfalls.

I have personally placed over 6,000 in-force policies over the phone. Today, I oversee an internal call center of eight agents as well as multiple single-agent and multi-agent led call centers across the country. I constantly evaluate our business based on industry norms, and our success lives and dies by the metrics we track.

These are the benchmarks/metrics that are critical for success:

  • Contact percentage from low-cost internet life insurance leads to higher cost SEO leads
  • Conversion rate from contacts made to an app sold to underwriting
  • Lead to app out conversion rate
  • Number of leads to effectively handle
  • Percentage on sales of apps started to policies placed
  • After-sale benchmarks

Let’s go through these metrics step-by-step.

Evaluating contact percentage

The first is the most important. For context, of course, you must know what quantifies a good or poor contact percentage for Internet life insurance leads. This depends heavily on the cost of the purchased leads. Inexpensive $3 leads generally have lower expectations. Vendors expect certain leads to have a higher contact rate, and therefore charge more (anywhere from $15 to $45 per lead).

(Pro Tip: Returning bad leads is a waste of time. Instead, pay the retail price on 100 leads and run a test to see what the bogus rate is. If it’s over 30 percent, I wouldn’t suggest business with the vendor. But say it’s 25 percent. You should be able to negotiate 25 percent off the retail price.)

Now, let’s say you purchase leads at $25 each. What is a good contact percentage?

First things first, here’s the reality: You’re never going to contact 100 percent. In fact, you’re not likely to ever contact more than 60 percent. But for $25 per lead, I’d expect to see a contact percentage of 45-55 percent.  For a higher price — say, $45 per lead — you’d have to sell a lot to have that lead cost make sense. But contact will be an issue. On a good day, you may contact 55 percent of your leads.

(Pro Tip: Use text messaging to contact leads. They’re more likely to respond than if you call or email. I use Message-Media, which is an inexpensive and highly effective way to send automated drip texts to prospects. It’s as simple as “Hey, I got your request; when is a good time to talk?”)

How about the phone conversation to new application rate?

At our sales fulfillment center, our conversion average is around 33 percent. If I spend $8 a lead for 100 leads, I may contact 15 percent. If I sell five policies, that’s 33 percent. Say half of those stick and are approved (conversion is 2.5 percent). I just spent $800 to earn $2,500 in premium.

What is the industry percentage for lead to app out?

For purchased leads costing $20–$30, the app out expectation is 15–20 percent. For purchased leads costing $5-$15, the app out expectation is 8–12 percent. A good rule of thumb is this: Compare your marketing cost to an annual premium and never exceed the 30 percent mark. For example, on $1,000 in commissionable premium, I don’t want the aggregate lead costs to eat more than $300. In this case, it doesn’t matter if you’re paying $1 a lead or $100; if it converts and the acquisition is 30 percent or less, that’s outstanding.

(Pro tip: Remove the top and bottom five percent of deals and focus on the middle 90 for a more accurate reading of how business is doing. You don’t want a single $10,000 case skewing your numbers and making a campaign look better than it really is.)

How many leads should you handle?

A typical agent should be able to handle 300 leads per month, while a very efficient agent can handle almost twice that with some technology integration. Once you prove you can handle 300, try more. But I wouldn’t suggest biting off more than 600 a month unless you want to spend 10 hours a day dialing until your fingers bleed.

What’s a good percentage for apps started to policies placed?

A good percentage for apps started to policies placed is 60–65 percent.

If you’re under, ask yourself if it’s lazy quoting or soft selling on the front end. Maybe it’s relying on the carrier drop ticket process, which typically relies on out-of-state workers with no follow-up phone strategy for your clients. It’s extremely costly to process business and not have it place. Anything under 50 percent means it may be time to reevaluate if this is the right career.

(Pro Tip: Utilizing the live transfer and e-signature applications features of management systems such as EZLife Sales has helped our sales fulfillment center boost our application return rates and placement ratios.)

If you have a great contact percentage but your new app percentage is low, then something in your delivery is amiss. In that case, seek further assistance or training.

See also:

The rise of the Internet life insurance agent

50 best ways to generate leads: 1-10

3 steps to selling Gen Y on life insurance


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