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Life insurance moves through a sales channel. It travels from the insurance company through brokerage agencies, who rely on independent and corporate agents to sell the policy, to the end consumer. When designing a strategic incentive program, the objective is to identify at what point in the sales channel incentive rewards can be applied to generate the greatest ROI.
In life insurance sales, incentives for the end consumer are limited to rebates and wellness-related metrics. Legally and ethically, you cannot use incentives to influence their decision.
So, looking at this model, ask yourself, "Who, ultimately, has the most influence on whether or not the end consumer purchases a life insurance policy?"
If you guessed the individual agents, you guessed correctly.
Incentive travel programs are a proven way to motivate insurance agents, to create more emotionally impactful experiences for them than cash commission alone, and to encourage longer-lasting changes in behavior.
Here's a look at five ways to use incentive travel to encourage agents protect more people against mortality and longevity risk.
1. Design your incentive travel program in a way that doesn't create a conflict of interest for your agents.
This is a no-brainer, but it's one of the most important decisions life insurance distribution organization will make when designing their insurance program. The U.S. Department of Labor's proposed fiduciary rule, which would have greatly restricted the use of travel incentives for life insurance agents, was shot down by a federal appeals court last year. But potential changes in market sentiment have caused many life insurance distribution organizations to move away from sales-based metrics, which might pressure agents to sell policies based on the biggest impact to the bottom line instead of the best interests of their clients.
Many of our clients have moved to a more holistic approach. Incentive points can be issued on a variety of metrics, all of which are beneficial to the company's bottom line in the long run.
Product knowledge is crucial as life insurance agents move into a more advisory role. Rewarding points based on product knowledge will ultimately make them better agents and more effective salespeople. Other clients assign points upholding company values, providing better area coverage, or for being loyal to the company (based on tenure). All of these are beneficial to companies who look at the bigger picture.
Mark Herbert
