Life insurance agents who don't carry business cards emblazoned with an alphabet soup of educational credentials needn't fret they're at a disadvantage relative to the competition. Indeed, a rookie in the business may know more about some nifty techniques funded with life insurance than many experienced attorneys or financial planners.
Kevin Spahn, a financial planner for Northwestern Mutual Financial Network, Milwaukee, Wis., uttered these reassuring words to assembled attendees — newbies and experienced agents alike — of the Life Insurance Sales Mastery Forum, held here September 27-29. The annual event, now in its third year, was sponsored by National Underwriter.
"In the first weeks of your practice, you can learn more about life insurance than most other advisors know," said Spahn. "Once you become knowledgeable about life insurance, you can get in front of the most successful people — CEOs, high net worth individuals, doctors lawyers — and become valuable to them because you have a unique perspective."
By way of example, Spahn cited a wealthy business owner who hesitated in purchasing a life insurance policy, this despite his wife's urging him to do so, and devoted between 8 and 10 meetings to the topic in meetings with Spahn. The reason: A friend of the business who was an accountant told him not to buy. In a subsequent meeting with both parties, Spahn revealed how little the accountant understood about life insurance. He soon thereafter inked a contract with the owner.
Key to establishing a trusting relationship with a prospect, said Spahn, is leading a conversation with probing questions, then using the answers to direct the inquiry to an intended result. When asked, for example, why they purchased the amount of life insurance they have, many clients cite reasons that betray a lack of planning (e.g., the face amount 'sounded like a nice round number'). In these cases, Spahn will then ask if they would be interested in seeing a formula that will help them to determine the right amount of insurance they should own. He added that, in his 13 years as a practicing agent, no prospect ever said 'no' to this question.
Also likely to lead to the sale of a permanent insurance policy is to question clients about how long they want to have life insurance. Should a client say, "for the rest of my life," the agent can point out the incompatibility of the client's desire with owning a term policy, which becomes prohibitively expensive after a certain point. Or if the policy is only wanted until the children go to college or until retirement, the agent might ask whether a decline in the death benefit from the face amount to zero at the designated time is acceptable. Usually, said Spahn, the client will answer by indicating a desire to keep at least some insurance — hence the value of a permanent policy.
Given a permanent policy's high cost compared with term insurance in the early years of a contract, however, the first priority is to ensure the client has the right amount of insurance. In instances where the client can only afford term, Spahn will discuss "term with options," a phrase that clients find more attractive and understandable than "convertible term" (i.e., a policy that can be converted from term to permanent insurance without the client having to re-qualify at the time of conversion).
