Are final expense telephone sales the future?

By Jeff Root

October 04, 2016 at 02:00 AM

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How do you feel about working from your home or an office, controlling your own hours, having low expenses, making a good living, and being involved in a growing market?

If that sounds good, you need to take a look at selling final expense life insurance over the phone. That's right, selling it from the comfort of your own home. It can be a very profitable endeavor if done right.

I know the majority of final expense coverage is sold face to face, and there's absolutely a segment of the market who would never buy over the phone. But there's also a growing number of seniors who will buy coverage without an in person meeting.

I recently asked Anthony Martin from ChoiceMutual.com about his success and focus on selling final expense by phone. What follows are some of his insights.

Why sell final expense in the first place?

The answer is multi faceted, and that's a very good thing. The reality is, final expense offers many benefits that are not available when you sell other types of life insurance. Additionally, the final expense market is huge and massively underserved. By and large, the laws of supply and demand heavily favors agents who sell final expense.

Big market

The typical final expense client is between 62 and 68. You are probably aware of this familiar baby boomer statistic, but it's just too significant to ignore. 10,000 seniors per day are turning 65. Many of them today are in need of a plan to pay off their funeral expenses. This is like a conveyor belt of new customers who need what you are selling.

Unquestionably, final expense has the shortest sales process for any type of life insurance. (Photo: iStock)

Lightning fast sales process

The overall process may vary a bit between face to face selling versus selling over the phone. Having said that, it's generally a one call close that typically takes less than one hour. There is very rarely any kind of follow up involved. It's just the nature of the product and the target market.

Compare this to the average sales cycle for an agent who sells term life insurance. Easily, they expect at least 30-45 days from first contact to policy issue for fully underwritten clients. Also, the average sales cycle for universal life and traditional whole life is well beyond 30 days. As you can see, final expense offers you a super quick and efficient sales process.

Instant case decisions

As previously stated, the final expense sales process is typically a quick one call close. This is only possible because of the way the insurance companies have designed their products. Most insurers have a point of sale interview as part of the overall application process.

Basically, the insured, the agent, and the company will complete a three way phone call. On the call, the company will get all the necessary authorizations from the client. This will enable the insurer to run prescription history checks, and scan for any relevant records on file with MIB.

Additionally, they will formerly ask the client all the health questions. In the end, the insurer has all the information they need to perform their risk analysis. By the end of the call, the vast majority of final expense insurers will render a final decision regarding your applicants eligibility.

Don't you just love that little feeling you get when a policy is issued? Who doesn't appreciate that moment in time when money is made. When you finally get that notice from the carrier about a policy being issued, it has a special way of brightening your day.

On a more serious note, if your client gets approved for a rating other than applied for, you can deal with it on the spot. How many times have you had clients refuse to try again once you delivered them some bad news days or weeks after the initial application? Well, in final expense, this is a non issue.

High commissions

Presently, street level contracts with no proof of production are usually between 110 and 120 percent. If you have a history of respectable personal production, you can easily warrant 125-135 percent commission rates.

Understand that every insurance company offers slightly different commission. However, they are all fairly close to one another. Furthermore, your IMO will be a huge factor in what kind of commission rate you get with the various insurers.

For the most part, a brand new final expense agent, with no experience or past production, can start out with many companies at 120 percent. The average case size in final expense is right about $600 in annual premium. If you do the math, you can see why final expense is a very attractive opportunity for brand new agents.

If you have an organization with ample production, you can surely command commission rates above 135 percent. Again, it will depend on the insurer and your IMO. For example, if your IMO is currently sitting at 140 percent, your cap will more than likely forever be 135 percent. Remember, the fewer people between you and the carrier the better. Just make sure you investigate the hierarchy you are considering before you sign on the dotted line.

Going direct with some carriers is possible, but only a select few allow this. For those that do, the commission rates they offer are usually lower. Since there is no IMO or NMO between you and the carrier, their financial exposure is higher. This is why their direct contract commissions are typically lower than average.

Speedy commission payouts

In addition to the very high commissions, you get the benefit of being paid incredibly fast. The majority of final expense business is now being paid once it's approved. Most life insurance business is paid upon the first draft date. In final expense, you can sell a policy today that drafts a month from now, and still get paid on that deal tomorrow.

Again, not every carrier allows this, but most do. Furthermore, your IMO will also heavily influence if this is even available to you. In general, though, being paid upon policy approval is commonplace in the final expense business.

Extremely diverse underwriting among carriers

Presently, there are dozens of independent insurers that offer a final expense product. Because they all compete with one another, their products are all usually different in subtle ways. The net result is having many underwriting niches that can cover a variety of common health conditions present in the final expense market.

More than likely, there is a carrier out there with a final expense product that has underwriting designed to accept your client's health conditions. This has many advantages to you as the agent. First, you don't lose a deal due to high prices and/or waiting periods. Also, you get higher commissions. Every insurer will pay a higher commission on a level (healthiest rating) priced product compared to a rated up plan. It's a also a massive value to your client. They are able to obtain coverage that will likely have no waiting period, and it comes with bottom tier pricing. Score yet another point to the free enterprise system.

In essence, final expense is just a simplified issue whole life policy. (Photo: iStock)

What in the world is final expense anyways?

Honestly, final expense is just a marketing term. There is no official entity that designates a precise definition for the term "final expense." In essence, final expense is just a simplified issue whole life policy. The face amounts are usually between $2,000 and $30,000.

Seniors who purchase final expense overwhelming do so for one major reason. It's the only way they can have a vehicle that ensures their funeral costs are not left as a financial burden to their family. On the flip side, a select few buy final expense to pay bills or leave money to loved ones.

Another key differentiation about final expense is the underwriting. Point blank, the underwriting on final expense is incredibly lax. These final expense companies accept a lot of very serious health problems.

As we already said, the diverse selection of carriers has yielded many different underwriting niches. For the majority of health conditions present among most final expense customers, there is usually a plan that willing accepts them. The only question is, which carrier offers it? Thankfully, there is almost always one out there that does.

In one sentence, final expense is just a very loosely underwritten small face amount whole life policy meant to cover end of life expenses. There are many articles on the web about final expense. It's sad because many of them usually claim that final expense policies all come with a two year waiting period. Nothing could be further from the truth. The reality is that most final expense applicants can and do qualify for immediate first day coverage with some company.

Why sell final expense over the phone?

As said, final expense, regardless of the medium, is a rewarding opportunity for all the stated reasons. The market itself is massive and growing daily. Put simply, there is a big opening to make a very healthy living servicing this market. You can sell final expense face to face. Truthfully, most final expense business is sold that way. However, selling final expense over the phone offers you some unique benefits. Consider the following:

- No driving
- You can work normal hours
- Very low expenses
- Very high level of flexibility
- Growing business model

This can be done from your own home or in a call center. There are lots of reasons why people might want or need to work from home. Regardless of your specific reason, if you must work from home, selling final expense by phone can be the perfect opportunity for you to earn a good living that conforms to your personal situation. On the other hand, if you are a person who wants to work in an office, a call center could be a great fit for you.

Almost all the major final expense carriers have a complete voice signature process in place. This allows the client to completely apply for, and sign the entire application, without ever physically seeing or touching a piece of paper.

Presently, well over 90 percent of all final expense is sold face to face in the client's home. The reason for this is quite simple. It all has to do with their level of comfort. The cold hard truth is that nearly all final expense customers are very comfortable buying insurance from someone they can touch. Alternatively, not all of them are comfortable buying insurance from someone they have no clue is real or not. In spit of this fact, there are still plenty of final expense customers who are more than willing to buy over the phone if you have the proper sales process in place.

Below is a breakdown of three age brackets. Each bracket carries its own level of difficulty getting clients to more forward without truly knowing who you are.

- 76-85: Highest
- 66-75: Medium
- 50- 65: Low

All in all, baby boomers over the age of 65 were just too young to fully experience 21 Century technology. As such, they, on average, are not comfortable transacting business in a nontraditional format.

And who can blame them? For their entire life, technology played virtually no role in their daily routine. To expect them to all of the sudden freely accept a foreign way of doing business is quite unrealistic given how human beings operate. Again, this is not blanket statement about all of them. We are strictly speaking in terms of averages here.

At the same time, there are currently many final expense customers between 65 and 85 that are very willing to partake in a telephone sales process. Granted, less of them are willing compared to those who are not. The point is; there is still plenty of opportunity with even the most difficult age group.

Under current conditions, you can very successfully sell final expense over the phone. Furthermore, you can expect it to get easier as time goes on. What a great combination!

One day in the future, selling via phone or through some sort of electronic process will overtake the industry. Field agents will become the minority. They will be forced to adapt or be left to the side.

Albeit, this probably will not happen for at least another 7 years, but it will absolutely one day occur. Who doesn't love being a part of a growing industry?

Make no mistake, selling final expense insurance over the phone is not easy. (Photo: iStock)

Tips when selling final expense over the phone

When done properly, selling final expense insurance over the phone can certainly be done successfully. The final expense market may be hemorrhaging seniors who are retiring. There are many of them in need of a plan to cover their funeral and burial expenses.

However, these facts do not mean selling final expense by phone is an order taking position. Nothing could be further from the truth.

To begin selling over the phone, you will need a lead source. Cold calling works to some degree, but you won't make much money doing it. It's very time consuming so you can't really make many sales doing it. Not to mention, most people flat out are not cut out to cold call dial on a full time basis.

Different agents use different lead sources. Some common ones include:

- Direct mail
- Telemarketer leads
- Internet leads
- Aged leads of various kinds

Your lead source will be likely be a determined by a process of trial and error. Try different ones out and build a program that works well for you.

In order to be successful over the phone, you must accomplish with your mouth, what field agents accomplish by their presence. Trust is what you must earn. This little word is the end all be all when it comes to final expense phone sales. You either earn it, or you don't. If you don't, you do not have a sale no matter how much they want or need the product. Without trust, they will NEVER give you their social security or bank account numbers. It's simply not going to happen.

The obvious question you must have by now is, how do you establish trust with them over the phone? It's a bit tricky, but it can be done. Before we get into exactly what you must do to establish trust, it's important to clarify 3 indisputable truths about selling final expense over the phone.

1. Some prospects simply will not buy over the phone.
2. If they say they want it, but they just need to see something in writing before they buy, it's a front. If you are attempting to get personal info (SSN/bank info), and their response is "send me something", do not bother. They will not buy if you send them anything. In fact, you will likely never get them to answer your calls ever again. Don't waste your time or money.
3. If you attempt to hard close clients, your placement and persistency will suffer greatly. Do not do it. Work on getting better at the sales process , so you aren't forced to hard close.

See also: The lost art of closing sales

Building trust

In the beginning of every sales call, you need to master the probing process. The idea is to tactfully investigate as much as you can about them as it relates to final expense. This fact finding process has two objectives.

First, you MUST discover their "why". Second, you want to know as much as you can about their final expense experience. If you can reveal both of these things successfully, you will do well. In all honestly, these two are the two areas that take the most time to master. Below are the types of questions you will hopefully get answers to if they are applicable.

See also:

It all comes down to trust

3 good closing lines, 3 bad closing lines

Are phone sales the future of final expense sales? (Photo: iStock)

Here are some common questions agents can use to determine how serious their prospect is about buying final expense insurance over the telephone.

How long have they been looking for final expense?

- How did that search go?
- Did they apply with anyone?

Have they ever applied for final expense before?

What was the result and why?

- How have they looked into final expense in the past (what mediums)?
- Have you ever had to plan a funeral for someone?

Who was it for?

How as that process for you?

Did they have insurance to cover the bills?

- What made them interested in final expense now?
- Do they have anything in place currently to cover their final expenses?

What is it?

How long have they had it?

When did they take it out?

To be clear, you should not write a list of questions out and fire them off like a game of 20 questions. That would not end well. The demographic that buys final expense is incredibly unique and tricky. You are typically dealing with people who live check to check. They are very prone to procrastination, they're highly emotional, and unpredictable in many ways. For this reason, you have to think carefully how you will respond to their reactions. It will take some time to learn how to pivot properly and deal with the issues you encounter. If you are committed to learning how, you will eventually figure it out.

Easily, their why is the single most important part of the beginning of the sales call. Here is a rule that you must tattoo in your brain. You do not present (give prices) unless you know why they are a lead in the first place. You have to know why they responded to that telemarketing call/ or direct mail piece/internet lead. There was some thought they had when they chose to respond. You have to know what they were thinking the moment they responded. That is their motive. It's the reason why they were remotely interested in final expense in the first place. As previously stated, the vast majority of final expense clients are interested because they do not want to leave a burden to their family. This is the motive for about 95 percent of applicants.

This all sounds easy enough right? Well it's not quite that simple. When trying to ask questions to discover their motive, many prospects will give you fake answers like "I was just curious" or "I just wanted to know the cost", or something else vague. Those kinds of responses are not real answers. They don't tell you why they are a lead in the first place. Those are screw you answers.

You have to be a professional and commit to probing further to get them to say their motive. Do not give them any prices or start going into health questions etc without first getting them to state their motive. If you have repeatedly tried getting them to say their motive without success, try the following question. It will usually work: "Now this may sound strange, but I promise you that I ask it for a very important reason- Why do you want a final expense plan?"

For successful telephone life insurance sales, try to flush out what motivates your client. (Photo: iStock)

You will know their motive when they say it. It will sound something like: "Well I was just thinking that I don't have anything now. I don't want to leave my babies with my funeral bills."

Obviously, everyone will say something a bit different, but they will all be similar to that. Notice in that response you know what they were thinking. You know why they would part with $50 per month.

You know why they are interested in insurance. Your knowledge of the motive gives you a green light to fully present. That is to say, you are cleared to gives prices and attempt to close.

It's important to remember that just because someone says their motive does not mean you have to stop probing. If there are other questions still unanswered, commit to their discovery. Trust between human beings is very often the product of one person showing the other that they care. One of the most effective ways to do this, is by asking questions. Have you ever read a book on dating women? They all tell guys to do the same thing. Ask the girl questions is their prescription. The truth is, it works. Women just love men take the time and show interest in her by asking questions. It's like that when you sell final expense by phone. If you can have a natural conversation with your client where you take the time to find out about their (FE related) wants/needs/desires, you put yourself in a very good position to earn their trust.

Another big reason this approach is so effective is because it's different than most sales people. The average person thinks sales is just about being smooth and slick talking. In reality, it's nothing of the sort. Sure a ShamWow commercial does that, but TV ads are a breed of their own. A true sales professional will have a conversation with a prospect that uses questions as a foundation. There really are scam artists out there who scam people over the phone. They do not operate like this, or sound similar in anyway. You want to differentiate yourself as a true professional much as possible.

Another great benefit to thoroughly probing is you will often discover objections ahead of time. Consequently, you can deal with them up front. An objection avoided is a million times better than an objection handled.

All around, a complete discovery process is beneficial in so many ways. If you master this process, and fail at the other stuff, it won't even matter. Usually, doing well up front means it's just a matter of getting your client qualified within their budget. It's a very natural process when done this way.

If you want to be involved in a growing business that gives you the opportunity to have great control over your life and make a great living, selling final expense over the phone may be for you. It's not easy, but it surely can be done. Just make sure you are prepared to work hard to get through the learning curve as soon as possible. Stick with it, and you too can become a phone pro earning a great living from home.

Also by this author:

Here's why digital life insurance sales are growing

All in the family: Brothers build success by never giving up

The time is now to start prospecting life insurance online

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