Kenneth J. Smith

Recently, while I was conducting a sales training session, someone asked me, “Ken, can we really learn anything from a bunch of dead guys?”

Although that question might come across as a little bit funny and a whole lot “snarky,” it also reveals an important mindset that’s worth exploring.  In a way, the question reveals the thinking—misguided thinking, I might add—of a lot of people in the life insurance business today.  That’s the thinking that today we live in such unique times that we face sales challenges that have never been faced before.  And that, as sales people, our toolbox needs to be filled with tools that no group of salespeople have ever had to use before.  We can’t possibly learn anything from the sales approaches and outlooks of those salespeople who have long been dead and gone, much less actually working in the business, can we?

In my book Sales Lessons from the Masters, I explore and share the sales and motivational principles I have learned from the greatest sales people in our business.  And I believe that before it makes sense to discuss those principles, one first needs to understand what a principle actually is.

A principle is an idea that works 100 percent of the time. Another way to say it is that a principle is like a law of nature. For example, with the law of gravity, if I stand on the roof of a building and drop a ball, it will fall to the earth every time. It will never go up. The same consistency of specific results tied to a specific action is true with all principles.

Napoleon Hill wrote his book Think and Grow Rich 80 years ago. That book is based on principles Hill learned from successful business leaders of his generation. To this day, it is still a best-selling book. It obviously continues to have a significant impact on readers, because there are more than 6,000 comments about it on Amazon’s Web-site. I believe that the reason for the Think and Grow Rich continued success is that Hill based his book on principles.

Another example of a book that is based on principles is Frank Bettger’s How I Raised Myself from Failure to Success in Selling. It was written more than 70 years ago and has more than 650 comments on Amazon’s Website. Again, that’s terrific evidence that it continues to have an impact on readers, no matter its age.  The reason for its continued success, I believe, is Bettger’s focus on principles.

Just so you know that I’m not one of those guys who worships the past and believes getting back to our glory days will solve all of our sales problems, let’s look at the case of Amazon which I’ve mentioned a few times already.  Jeff Bezos and his management of his company Amazon is actually a great example of applying principles. Although much of the world likes to tout Amazon’s innovation, Bezos actually uses the same principles as Macy’s, Gimbels, and Wanamaker’s department stores used 100 years ago and Sam Walton has used successfully in more recent years.

Consider how Bezos stresses the following principles, and how Amazon implements them:

• Bias toward action.
• Obsess over customers.
• Insist on the highest standards.
• Manage for results.

Just as Bezos applies the principles from the greatest retailers in his management approach for Amazon, we in the insurance business can apply the principles from our industry’s greatest sales people in our sales efforts today.

Sales principles may not be sexy or hi-tech, but they have something exceptionally valuable going for them—they work.

I believe so strongly in this fact that it permeates my sales training approach.  In fact, that is one of the things that sets me apart from others who do what I do.  I believe this business has become so focused on the products that we’re developing that we have forgotten the basic sales principles that have worked, are currently working for those savvy enough to use them, and always will work. Every time.

These sales principles work with agents and advisors, regional sales people, internal wholesalers, and property/casualty agencies. They can even be applied to one’s personal life.

Here are several quick examples of what I’m talking about:

Stop Selling Insurance.  Remember that it’s not about the product, it’s about what the product does. No one wants to buy insurance, but everyone wants to solve a problem. For example, your prospect wants his or her family to stay in their home if anything happens to your prospect. That’s a problem. You solve that problem with life insurance.

How do you uncover problems? You uncover them with questions, and lots of them. I have found that the top agents and advisors ask lots of questions and then present the product as the solution to the questions they’ve raised.

After the agent or advisor understands that we don’t sell insurance but we do solve problems, their perspective on the business starts to totally change.

Sales Process.  A management consulting company conducted a survey of sales people. Their study found that 78 percent of the sales people surveyed had no sales process or didn’t use their company’s sales process that was available to them. Is there any wonder why 20 percent of salespeople do 80 percent of the business?

By assisting my clients in developing a sales process, I have been able to have a significant impact on my clients’ sales. In fact, this is one of the areas where I feel like I’ve had some of my greatest impact.  I help by breaking down the process to simple steps that are easy to implement. I think back to my days at Mutual of Omaha. One of our offices sold almost as much disability insurance as the other 60 offices combined. The reason is that they had a sales process, and everyone in that office followed the sales process every single time.

Repetition.  If you want to change behavior or change an office culture, the way to do so is through repetition.

People in home offices are often challenged by this concept. They believe that all they have to do is tell the agent or advisor to do something and it will just happen. 

I am reminded of all the companies that developed individual critical illness plans. They spent a lot of money developing and filing products, and then they expected the agents to sell them. The sales never happened to any degree. When introducing anything new, one must look at the project as a process. Because the critical illness product was a brand new concept for most agents, the first step in the process had to be to help the agent understand the need. The second step in the process was to have the agent purchase the product himself. 

Repetition is a crucially important component to any process.  I have integrated repetition into my own training in many ways.  One way is that I have a goal to say the same thing to an agent ten times, each time in a slightly different way. My ultimate aim is to eventually have the agent call me and say something like, “Ken, I have this great idea!” and then essentially repeat to me what I’ve said to the agent over and over.

I know I’ve succeeded with the agent when I hear my own words coming back to me!

I have attended a lot of training meetings throughout the years. And it is very common to see everyone leaving a meeting and saying things like, “That was the greatest meeting ever!” But then nothing changes. 

I know why nothing changes, and it all comes back to a failure to understand, focus on, and implement principles.  And to understand, focus on, and implement principles takes time.  Certainly it takes more than one meeting.  That’s one of the reasons that my own unique training approach integrates the principles I’ve outlined here and provides a follow-up plan for my clients to follow.  And because that follow-up plan is both based on sound sales principles and integrates sound sales principles, it’s no surprise that it actually works.

Now, what do you think?  Can we really learn anything from a bunch of dead guys?

“Only a fool learns from his own experience. The wise man learns from the experiences of others.” -Ben Feldman

Back in the early 1980s, I had the opportunity to know Jack Wardlaw. Jack was consistently the top agent with Philadelphia Life and the author of several books on selling.

Jack said something that resonated with me. In all his years in sales, he concluded that basic sales principles remain the same from the time Grant Taggart (who sold riding horseback to appointments in the early 20th century) until long after Ben Feldman sells his last.

Wardlaw believed if you had sales principles (and product knowledge), you could sell life insurance in any time era. I agree!

I have been fortunate to know many great salespeople. There are three characteristics they have in common:

1. They learned sales from great salespeople. Through books, audio and mentoring, they learned from the best and did what the best did.
2. They take responsibility for themselves. They understand that if they are to be successful, they are responsible for their development. If they succeed or fail, it’s on them.
3. They understand sales principles. Sales principles are like laws of nature. A principle works 100 percent of the time. The law of gravity states that if you drop an object from the roof of a building, it will always drop to the ground. The same is true with sales principles. Sales principles work.

Ben Feldman was the greatest life insurance salesperson ever. Here are four principles from Feldman that will help you increase your sales.

Principle #1: Stop Selling Insurance
That’s right, I said stop selling insurance. Start selling what insurance does.

What does it do? It solves problems. For example, no one wants to buy disability insurance. However, they want to be able to buy groceries and pay their bills if they are sick or hurt and can’t work. That’s a problem. Disability insurance happens to be the way we solve that problem.

The analogy I like to use is that last year 10 million ¼ inch drill bits were sold. How many of those people wanted to buy a drill bit? The answer is none. They had a problem. They needed a ¼ inch hole. The only way to solve the problem was to buy a ¼ inch drill bit. 

The same is true with insurance. No one wants to buy insurance but they want to solve a problem. The problem could be accumulating cash for retirement, providing an income they can’t outlive, paying final expenses, helping the family stay in their home in event of death, etc.

It’s time to stop puking product. Your prospect does not care about all the product details. Your prospect cares about you solving his or her problem.

Remember Feldman’s words-Don’t sell life insurance, sell what life insurance can do.

Principle #2: Simplify Your Presentation
Feldman believed sales concepts needed to be simple. When something is simple, it’s easier to sell. He kept it simple so both he and his prospect understood.

He said, “life insurance isn’t simple. I can’t understand it unless I make it simple. I figure if I can understand it then the prospect can understand it. I get this idea and I take it apart.” A 30-second statement could take him as much as 6 hours to prepare.

Feldman was famous for his packages. His packages were bundles of whole life designed to solve a specific problem. For example, he had an education plan. Do you want your son or daughter to go to college? Would you rather pay over 18 years or pay in four years?

I was talking with his son Marvin while writing my book. He told me that when he was in high school his father would test the packages on him and his brother. Feldman believed if a high school student understood the concept then a business owner should understand. 

Ask yourself, would a high school student understand your presentation?

I have had great success working with agents implementing a simple fact finder. It is a series of simple questions and only takes a few minutes to complete. The prospect sees the problem and is offered three solutions: Permanent, term and combination of permanent and term. It is simple and pinpoints the problem. Agents using it have increased sales significantly.

Principle #3: Cash Value Life Insurance
I remember hearing Feldman discuss how he handled the objection, buy term and invest the difference. His response was: The problem is permanent.

My observation is that almost no one ever saves the difference. All you have to do is look at savings rates in the U.S. and realize very few people actually save anything. Even though no one talks about it, cash value life insurance is one of the best ways to save.

Feldman believed that saving money required a system. Unless a person built systems into a savings plan, there won’t be any savings. 

Stats show that people save money for a little while. The average length of saving is about three years. Then the average person takes it out, spends it, and it’s gone.

The average person starts over, and the same thing happens again. All too often the person is 60 or 65 and has no money.

It isn’t because the person didn’t make any money. It’s because the person didn’t save systematically. 

The premium statement or EFT from the insurance company creates the system. The person sends a few hundred dollars a month and soon he or she has accumulated some money. Few people know the cash value of their life insurance. You can point out-cash value life insurance helps accumulate cash.

With cash value life insurance, you are helping people help themselves.

Principle #4: Making Calls
There are lots of people in home offices who would like to eliminate agents and deal directly with the consumer. However, there is only a small segment of consumers who will take the initiative to purchase life insurance.

Check the LIMRA stats. There are a large number of people who acknowledge they are underinsured. They realize they have a problem but don’t do anything about it. They will not do anything without you calling. 

Feldman believed the key to making sales is simple-just make calls. Nothing happens until you make a call. In a virtual environment, consider the need for expert negotiation skills to adapt, so that you know exactly what to talk about and how to talk in order to seal the deal.

Listening to the audio of Feldman at the 1981 MDRT Conference helped me to look at making calls with a new perspective.

He helped me understand the importance of momentum in sales.

He used an example. It’s Monday, you make some calls and nothing happens. The same thing happens on Tuesday. You keep making the calls and by the end of the week you have a sale.

You keep doing the same thing the second and third weeks. You keep at it in spite of the “No’s.” 

You are building momentum. Keep making the calls and you will make the sales.

You can’t hear the “no’s” and start making excuses. Everything stops when you stop making calls. Make the calls and the sales will follow.

Feldman said, “Fundamentals are down to earth. And one fundamental is: You have to make a call. It’s that fundamental.”

When you read that title, I know you are thinking, “What in the world does McDonald’s have to do with insurance sales?”

As you are probably aware, McDonald’s is among the most successful franchise operations. Here’s evidence that they do something right:  Most small businesses fail within five years of opening. McDonald’s, on the other hand, went many years without a franchise failure.  

But can we really learn something from the fast food industry?

First off, let’s address this question: What’s a franchise? A franchise is essentially a system–and the idea is that if the franchise owner follows the system and does what the organization tells them to do, the franchise owner will be successful.

I remember reading an article about the early days of McDonald’s. In those days at least, the best franchisees where farmers. Farmers knew how to follow a system. The worst franchisees were MBAs. MBAs wanted to change the system. They thought they were smart and that they could improve the system.

Some readers may remember Burger Chef. At one time in the 1960s, McDonald’s and Burger Chef were close to one another in size. Like McDonald’s, Burger Chef had a system that worked. In 1968, General Foods purchased Burger Chef and thought they would improve upon the existing system. It didn’t work; Burger Chef was sold to Hardee’s and has long since disappeared.

There was a management consulting group that did a survey of salespeople. They found that 78 percent didn’t have a sales system or sales process, or they had a sales process but didn’t use it. If you think about it, that could explain the reason why 20 percent of salespeople typically generate 80 percent of the business. The survey looked at salespeople across several industries. I think if you looked at the life and health insurance business, you almost certainly would find the same results.

When I wrote Sales Lessons from the Masters, I looked at the common denominators that made Frank Bettger, W. Clement Stone, Joe Gandolfo, and Ben Feldman successful selling insurance.  One of the common denominators is that they all had a sales system or a sales process.

W. Clement Stone started Combined Insurance in 1920 with $100. He grew it into a $1 billion company. He did it primarily selling a pre-issue accident policy. When he started in 1920, there were hundreds of insurance companies and thousands of agents selling similar plans. By the 1950s, his company and agents were the only ones still selling that kind of plan.

His agents would sell as much in a week as agents with other companies would sell in a month. The reason? Stone had a sales system or process. If the agent followed the system and made the calls, they would succeed. It was just like the McDonald’s franchise.

Ben Feldman, who is considered by many to be the greatest life insurance salesperson ever, had a sales system that he followed.

Few realize that Ben was a package salesman. His packages were bundles of whole life designed to solve a specific problem. For example, his educational package used whole life to fund college education. He would ask the prospect, “Do you want your son or daughter to go to college? Would you rather pay for it in four years or over eighteen years?”

When he developed a new package, he would test it on his wife, office staff and sons. His son Marvin told me that he and his brother knew a lot about life insurance by the time they graduated from high school—from Feldman testing his packages on them. Feldman believed that if the package was simple enough for a high school student, then a business owner should understand it as well.

He would put together a list of prospects and start calling them. 

Recently, I have worked with several small life insurance companies to develop a sales process around simple needs analysis. The process covers the approach through answering objections and closing.

The result for these companies has been the sale of larger face amounts and improved closing ratios.

Here’s a key point to remember: You can’t just throw a sales process out there and expect agents to use it. You have to motivate and sell agents on what the sales process will do for them. The agent needs to understand the “why” behind the process, what the process will do for them, and the words to say. 

When instituting a new sales process, a company or marketing organization is attempting to change behavior – specifically the sales behavior of their existing sales team.  Repetition is the key to changing behavior. Salespeople hate repetition, but repetition leads to mastery. Simply put, the more you do something, the better you get at doing it.

For many years, my goal in this business has been to say something to an agent 10 times in slightly different ways each time, so that eventually the agent picks up the phone, calls me, and and says,  “Ken, I have a great idea!” And when he or she relates the “great idea,” it’s my own words coming back to me.

Joe Gandolfo said selling is 98 percent understanding human beings and two percent product knowledge. That’s not to say product knowledge isn’t important. But as an industry, I feel like we have it totally screwed up. We have focused 98 percent of our efforts on product and only two percent on understanding human beings. I believe that is one of the reasons our industry is in a state of decline. 

A good sales process does not ignore product, but its primary focus is on gaining a clear understanding of both the agent and the consumer.

Do you want to increase sales within your organization? In my experience, providing training for agents to understand, learn, and use a sales process is a step in the right direction. But developing that process takes work.

So, in answer to that question we asked early on, I believe that yes, we can learn something—and something important—from the fast food industry. 

“Selling is 98 percent understanding human beings and 2 percent product knowledge.” -Joe Gandolfo

As an industry, we have reversed Gandolfo’s statement. We have focused 98 percent on product knowledge and 2 percent on understanding human beings. 

Vince Lombardi was considered by many to be the greatest football coach of all time. The Super Bowl trophy bears his name. When he became coach of the Green Bay Packers, he told his team, “We are going to focus on basics, starting with this.” He held up a football, and told them, “This is a football.” Lombardi succeeded as a football coach because he focused on the fundamentals and the basics. He was constantly looking to improve and problem solve. So, whether you use the pdsa cycle or change the way you operate, you need to make sure you’re doing the same.

As an industry, we need to get back to fundamentals and sales principles. If an idea is a principle, it will work 100 percent of the time.  Principles are like laws of nature. The law of gravity shows that if you throw an object from the roof of a building it will drop to the ground every time. It will never go up. The same is true with sales principles; they work 100 percent of the time. 

Today, the problem is that everyone seems to be looking for fast answers. We have become blind to long-standing sales principles that have worked, still do work and always will work. For example, one principle goes like this: Don’t sell insurance–solve problems. Who really wants to buy life, disability, critical illness or long-term care insurance? We help the client see that they have a problem. The insurance product happens to be the way they can solve that problem. By understanding this principle, your whole perspective will change.

Years ago, a friend of mine had a client who was an auditor. This auditor mentioned that he needed to earn some additional income. The auditor was such an introvert that he couldn’t lead a group in silent prayer. My friend asked for the auditor’s thoughts about mutual funds. The auditor asked my friend, “Do you mean buy or sell?”  “Both,” my friend answered.  The auditor said, “Well, after life insurance needs are met and a person has an emergency fund, mutual funds are all right. You are gambling on our economy, which is a good bet.”

My friend said to the auditor, “My company is putting on some part-time people. Would you have any interest in joining us?”  The auditor said, “I couldn’t sell.”  My friend said, “Forget about selling. Could you show people how to balance their budgets?  If they need life insurance, could you suggest they buy more life insurance?  And if there is anything left after they’ve done that, could you suggest they put it into a mutual fund?”  The auditor said, “Yes!” The idea of selling was unacceptable to him, but he could certainly help people solve their financial problems.

I’ve since lost track of what happened with that auditor, but the last I heard he was making as much money part time solving problems with life insurance and mutual funds as he was full time as an auditor.

Recently, as I was listening to an audio recording of one of Ben Feldman’s presentations, An Afternoon with Ben from the 1981 Million Dollar Round Table (MDRT) annual meeting, it struck me that many advisors missed one of the most important components of Ben’s success. 

Ben Feldman was probably the greatest life insurance salesperson of all time.  I found it very interesting, because as I listened to the questions audience members asked him, most agents were focused on who he was selling to and what products he was selling. They completely missed one of the critical factors in Ben’s success – his packages! Ben’s packages were bundles of whole life insurance designed to solve specific problems.

For example, he had a “see-saw” package for business partners. If one partner gets off the see-saw, the other partner crashes to the ground. So that package was whole life used to fund a buy-sell agreement. Another of Ben’s packages was his “guaranteed retirement income” package, which was a package of whole life to provide retirement income.

Problem solving is just one example of a sales principle.  Another example of a principle is the value of enthusiasm. Every great salesperson recognizes the importance of enthusiasm in selling. 

W. Clement Stone believed that the most important factor in the success of a salesperson is enthusiasm. In How I Raised Myself from Failure to Success Selling, Frank Bettger shared how enthusiasm saved his career selling life insurance. Bettger was struggling in the business. His manager told him that he wasn’t cut out to be a salesperson and the manager was cutting off his draw. 

Bettger knew he had issues to deal with. He signed up for a course that Dale Carnegie was holding. The session focused on enthusiasm. After leaving the session, Bettger decided he would put enthusiasm to work. He went to see his manager and convinced him to give him one month to prove himself. Using enthusiasm, he wrote as much business in that next month as he had written in the previous ten months. 

Harvard professor William James came to an important conclusion about human beings-feelings follow action. If you want to become a certain way, all you have to do is act a certain way. Bettger learned from Dale Carnegie that if you want to be enthusiastic you just have to act enthusiastic. Enthusiasm overcomes fear and nervousness. More important, human emotions are transferrable. When you are enthusiastic, what happens? You transfer your enthusiasm to your prospect!

Jack Wardlaw, another great life insurance salesperson, stated in his book, Top Secrets of Successful Selling (in the 1980 printing), “I have come to the conclusion that basic sales principles will remain unblemished from the time Grant Taggart sold his first policy until long after Ben Feldman sells his last.”  Wardlaw went on to say, “You can take a good salesman from any time period, if they are vested with principles of good salesmanship and knowledge of current products, and they would be successful today.”

In addition to “knowledge of current products,” as Wardlaw states, I would also add “competent with tools of technology.”

Grant Taggart started selling life insurance in 1914, making his calls on horseback in Wyoming. The only change I would make to Taggart’s approach would be to add current technology along with current product knowledge. 

Isn’t it time for us as an industry to get back to basic fundamentals and focus on sales principles?

Last year Americans bought 20 million drills. No one set out to sell them a drill. The buyers had a problem: They needed a hole. They bought the drill to solve the problem.

I believe the time has come to stop selling insurance—critical illness, income protection, life and long term care insurance. The insurance industry has to change its focus. We need to stop talking about product and start talking about what the product does.

Joe Gandolfo, one of the most successful insurance salesmen in history, said selling is 98 percent understanding human nature and 2 percent product knowledge. As an industry, we have turned that around. We place 98 percent of our conversations on product and 2 percent on understanding human nature.

Prospects do not care about all the technical details of an insurance product. Too many details confuse them and take the focus away from the problem you are solving. Customers don’t care how an air conditioner works. All they want to know is that it will keep them cool on hot days.

No one wants to buy insurance, but they have problems that only insurance can solve. Therefore, we need to stop talking about the product and emphasize what it does—it solves problems.

For example, when someone is diagnosed with cancer, they face emotional and financial stress. That’s the problem we can address. Critical illness protection solves that problem. By providing a cash benefit upon diagnosis of a covered condition, critical illness protection reduces the financial stress and, as a result, reduces emotional stress.

Here’s another example: Your clients want to have enough money to provide an adequate income when they retire. That’s a problem. The solution is systematic accumulation of funds through cash value life insurance.

My friend Keith Leech is the leading critical illness and income protection sales trainer in Canada. We were discussing our frustration when brokers only focus on the product rather than on what it does.

Keith told me about a recent training session he had conducted. After the training session, he was answering questions from four brokers. Three of the four were focused on the product and had a lot of product-related questions.

The fourth knew about one-third of what the others knew about the product. His questions related to presenting the need. Guess what—the three brokers focused on the product haven’t sold any policies. The fourth, who was focused on need, is hitting it out of the park with CI sales.

We need to help our prospects understand they have a problem and that insurance is the solution.

Years ago, a friend in the industry had been trying to sell life insurance to two partners to fund a buy/sell agreement. They kept putting him off, until he asked one partner these two questions:

First: How would you like to be in business with your partner’s widow?

Second: If your partner died, how would you talk with his widow to determine the price for her share of the business?

After hearing those questions, both partners completed applications the next day. Until he asked those questions, he was selling life insurance. Those questions identified a problem that was solved with life insurance.

The legendary insurance salesman Ben Feldman said you don’t need prospects. All you need is to find someone who has a problem that insurance solves. Stop and think about that statement—it can totally change your perspective on our business.

Ben Feldman had a powerful technique to help prospects understand they had a problem. It’s called “disturbing questions.” These are questions designed to make the prospect uncomfortable. Here are some of Feldman’s examples:

“How much is your life worth? How much did you insure it for?”

“Doing nothing doesn’t solve your problem—it only postpones it. You have a right to postpone it. But if you postpone solving your problem, you know who will have to solve it? Your spouse or your partner.”

Here’s an example I suggest using when talking with a business owner:

“Suppose you decide tomorrow that you are going to take a three-month vacation to Costa Rica. You’re not telling anyone you’re leaving or what you’re working on. You just leave. What would your business look like when you returned after three months?”

Most owners will laugh and say the business would be a disaster, if it still existed. Your follow-up question: “What if it was not a vacation but a three-month leave-of-absence because of cancer, a heart attack or a stroke? Would the result be any different?” That’s a disturbing question for a business owner. But you can provide the solution with income protection and critical illness insurance.

Remember, you don’t need prospects, you just need to find someone with a problem that only insurance can solve.

There are lots of people with problems that only you can solve with critical illness, disability income protection, life and long term care insurance. Now is the time for you to solve their problems.

When asked the secret of his success as a hockey player, Wayne Gretzky said, “I skate to where the puck is going, not where it has been.”

My question for our industry is: Do we skate to where the puck is going or to where it has been?

In the 2012 Critical Illness Insurance Market Survey (conducted annually by Gen Re in conjunction with the National Association for Critical Illness Insurance) carriers listed the primary reason for developing critical illness protection as agent demand. Yet many of those same carriers listed the greatest obstacle to critical illness insurance (CII) sales as slow agent acceptance.

I don’t know about you, but to me that is a glaring contradiction. The same reason the carriers are developing critical illness insurance is also the greatest obstacle to sales. Sometimes as an industry we are slow to catch on!

Interestingly, that does not surprise me. As an industry, we introduced critical illness protection without really understanding the need for the product and, hence, missed selling distributors on the need for CII. We assumed the product would be accepted, since it was so successful in other countries. However, we overlooked one of the key success factors.

Instead of helping agents and brokers understand the need for CII, how to present and position the product, and how to answer objections, we went right to product training and missed all the other steps. We forgot that critical illness is not like a life product which agents and brokers have been trained to sell.

In every country where critical illness coverage has been introduced, sales did not take off until carriers began investing in sales training for the distributors. Then sales started slowly and built momentum.

The starting point is to understand that critical illness coverage was created by a cardiac surgeon, Marius Barnard, in South Africa in 1983. He saw that his patients, thanks to advances in medical technology and early diagnoses, were surviving cancer, heart attacks and strokes that only a generation ago were likely to be fatal. However, with survival came financial consequences—instead of focusing on recovery, patients were dealing with emotional stress and financial worries.

Dr. Barnard also recognized that these medical advances were putting the insurance industry in a difficult position. A generation ago, life insurance was the most appropriate financial product for someone who was diagnosed with cancer or had a heart attack or stroke, because they didn’t survive. Today we survive those illnesses, and with the advent of CII, there is now financial relief to aid patients and their families who are coping with recovery.

It’s significant that so many of those who successfully sell CII outside the major medical market make a point of telling the story about how the product was created by a world-famous doctor, not an insurance company looking for another product.

Here’s  a dramatic example of an event that tells us how much the world has changed today. Keith Leech, a leading critical illness authority from Vancouver, Canada, relates a story about one of his clients. Four years ago, he sold a 34-year-old man a critical illness policy. One day the client was at the gym, warming up on a treadmill, and went into cardiac arrest; a few days later in the hospital he came out of a coma. Then 30 days later he received a check for $100,000 for his critical illness benefit.

There’s more to the story: When the client collapsed on the treadmill, 15 people took out their cell phones and called 911. The person on the treadmill next to him was a nurse; she grabbed the defibrillator attached to a nearby wall and began administering to the victim. Paramedics arrived and rushed him to the hospital. There, he was placed in an induced coma so as not to damage his internal organs.

Just think: 20 years ago, no one at the gym would have had a cell phone. It has been only 10 years since various facilities, including gyms, started installing portable defibrillators. Advanced technology and medical treatments have drastically improved survival rates. Only a generation ago, this story likely would have ended in a death claim.

This example illustrates why CII exists today but did not 20 or 30 years ago. It also sheds light on why many people aren’t even aware of critical illness coverage.

While the world has changed, we as an industry have not kept up with those changes. Consider life insurance rates; they are half to even a third of the price when I started in the business. Life insurance rates are lower because we are living longer. The reason we are living longer is because of the advances in medicine.

Today we survive the serious illnesses that would have killed us not that long ago; yet with survival our world is turned upside-down. Think about the additional emotional and financial stress that occurs when someone is diagnosed with a critical illness. 

A generation ago, the right financial products for clients would have been life insurance, because they didn’t survive cancer, heart attacks and strokes. Today, that’s old-school planning; modern planning includes both life and critical illness insurance.

Here are three key questions you must answer before you and your clients can become passionate about critical illness protection. 

1.  There are too many products already, how do I decide if critical illness insurance is important?

2.  Why critical illness protection now?

3.  Do my clients really need it?

Please share your thoughts and comments about these questions in the space below.