Jim Kerley, Chief Membership Officer at LIMRA, is not the first to say the life insurance industry is poised for significant opportunity. The most creative agents in the industry say the same thing. So does one of the country’s smartest VC firms. Non-traditional retailers like Walmart have dipped their toe in the life insurance sales waters, and will likely continue to pursue middle market consumers who, by all accounts, are underinsured.
But Kerley is surely one of the most persuasive. Asked about a recent LIMRA study that identified opportunities and challenges for the year ahead, he shared a number of ways he thinks independent agents can capitalize on all this opportunity. And he gives a compelling reason for doing it, too. “At the end of the day, the single best advantage that we offer to the American public is that we provide a product that will be there when tragedy strikes,” Kerley says. “The product development and the underwriting might be complex, but the psychology of the sale is not.”
Read on for five of the best ways to sell this year.
1. Lead with the guarantee.
Death and taxes may be the only true certainties, but consumers still chase guarantees. Whether your clients are Gen Yers starting families, Gen Xers leading businesses or boomers moving toward retirement, they want to know that their money can buy customized financial security. Lead with the guarantee, and you will see your sales spike, says Kerley. The proof is in the sales data: products like whole life, indexed universal life and even variable life have sold exceedingly well in recent years.
2. Serve your clients’ children.
This year, millennials will become the largest living generation in the U.S. While their purchasing power is slightly behind that of boomers at the same point in their lives, the sheer volume of prospects is an opportunity too great to ignore. Moreover, these potential clients want to find an advisor through a referral, whether it be online or from a family member or friend. If you are trusted by the parent, you will be trusted by the child.
“As independent companies are working hard to deliver value, for me, the shift from thinking about baby boomers to thinking about Gen X and Gen Y — which are something like twice the number of the baby boomers — is going to be hugely important,” says Kerley. “We are going to figure out how to sell to them in the best possible way, including through digital sales channels.”
3. Use your BGA.
The competition for consumer attention is fiercer then ever these days, as just about anyone in sales will tell you. This is why Kerley advises independent agents to lean on their marketing organizations where, he notes, the principals are building closer relationships with the advisor base that they serve. This higher level of hands-on coaching leads to better client service, a critical advantage in a competitive digital age. It’s becoming truer as consumers and sales channels alike evolve: The better you market, the better you’ll sell.
And don’t forget social media, which is simply a new way of doing what life insurance salespeople have always done: meeting clients where they’re at. Today’s method is much more efficient, of course. Rather than sell to a single consumer at her kitchen table, you can sell to an entire market online. “Social selling is a big deal,” says Kerley. “Really, what the social sites allow us to do we’ve been doing as an industry for the past 75 years. It’s called networking. It’s called relationship-building. I think advisors are very savvy and they know how to communicate well with people. In many cases they are aggressively using social media to sell and reach prospects.”
4. Spend time defining your market.
Traditional market definitions based on net worth or demographic are simply too broad to be useful as consumers increasingly demand customized solutions. “There’s something like 40 million households in the middle market,” Kerley notes, “so you have to segment that market to find what the consumer needs. A younger Gen X household has very different needs than a retired boomer couple, for example, even if their net worths are similar.”
Perhaps this lack of “niche selling” is why the larger life insurance market continues to be vastly underserved; Kerley cites 70 million houses that don’t have the insurance they need to be protected. To sell well in 2015, advisors need to research their ideal client thoroughly before pitching creative product solutions that address client needs, both present and future.
5. Consider worksite sales.
Compliance, competition and commission cuts are just a few of the challenges life agents have encountered in recent years. As a result, life agents may need to explore new sales channels – and they could do worse than exploring the employer market. “One area where we’re seeing sales growth is the worksite market,” says Kerley. “There’s a huge opportunity for life insurance to be sold as part of a voluntary benefits package. It’s a very strong market because many employees hold significant value in the endorsement that their employer makes for ancillary products like life and disability.”