Four Reasons Why You Should Sell Life Insurance07/24/2020
On P2P Academy, every month I share a new episode of JIM’s TAKE which is dedicated to tackling topics that have recently come up in my training sessions with advisors.
In this month’s episode, I address a disturbing recent trend, most frequently with newer advisors in the business, which is their hesitancy to engage their clients in a conversation on life insurance.
They feel that collecting assets under management (AUM) is the sexier thing to do. That it’s more fun to talk to their clients about it. The real money is in AUM. That they don’t want to be cast as a life insurance salesperson.
I feel like advisors who have this mindset are doing a major disservice to both their clients and themselves. In this month’s JIM’s TAKE, I cover eight reasons why they need to sell life insurance (and there are many more), but I want to share a few of them here as well.
#1 It's The Right Thing To Do
The first reason is the most obvious, and we could probably end the article right here. Selling life insurance is simply the right thing to do.
If you believe in the philosophy of overall financial security and planning, then it starts with a solid foundation of risk management. Planning for the “what ifs” in life.
Perhaps no question is more important than, “What would happen to my loved ones or the people I care about if I were to die prematurely?”
You can’t have a complete financial plan without addressing this question and life insurance is a powerful tool to deal with it.
#2 You Can Attract Clients That Others Can Not
When working with younger clients, typically they don’t have the assets built up where they could be a significant client for wealth management purposes alone.
Traditional wealth management firms often require a minimum six-figure investment in order to establish a relationship with a wealth manager. These firms are not calling on young professionals because they don’t have the accumulated assets to meet that criteria.
The advantage to you as a financial planner is that you CAN call on these types of clients. And, you can be well-compensated for working with them by getting them started with a foundational life insurance program.
#3 Life Insurance Helps Build Trust and Relationships
Whereas traditional wealth management tends to focus on numbers and data, life insurance is a more emotional topic. As a result, addressing it paves the way for strong client relationships built on trust. There is a direct correlation between a client’s trust in you and the length of time they work with you. The stronger the trust, the more likely they are to be a lifelong client.
If you’re picking the right people, other individuals in their 30s who have a very bright future, they are going to have assets down the road. By the time they have those assets, you’re going to be the natural candidate to manage them.
#4 Life Insurance Is A Gateway To Building Your Future Practice
The benefit of working with these younger clients is that your practice is going to grow with them. If you are only working with 50 - 60-year-old clients, they may have the most assets now, but soon they’ll need to begin living off those assets. While you may immediately benefit from something like a 401(k) roll over or a lump sum payment into an annuity, the future sales opportunities will be limited.
If you get a new client at the age of 30, on average they will buy risk-based products seven additional times. The best clients may buy even 11 or 12 more times from you.
Additionally, each sale will get easier and easier. I have seen studies that show that to make the first sale to a new client takes approximately 23.5 hours. The second sale takes about three hours. The third time only takes one. The speed of the sale is increased through the trust built with the client.
If you are only doing business with people age sixty and up, you will be constantly seeking out new clients. It’s like doing the business from year one over and over again. That’s not say you shouldn’t be working with this age group, but a healthy practice should have a good mix of both younger and older clients.
Building Your Practice Through Life Insurance
After spending ten years as a financial advisor, 12 years leading an agency of 117 full-time advisors, and now working with hundreds of advisors across the country as a trainer, I understand the challenges of selling life insurance. However, I also know from experience that the long-term rewards of it are profound.
Embrace the struggle. Be proud of what you do. It makes you unique and attractive to the marketplace, especially when you have the passion and knowledge behind it. This is not a quick fix, but the best things in life really do take time.
For more reasons on why you should sell life insurance, I encourage you to try out P2P Academy. You can watch the most recent JIM’s TAKE for more on this topic and check out over 170 training videos on how to master your professional sales skills.