Saturday, July 13, 2024
Home Authors Posts by Larry Dean

Larry Dean

is a graduate of Wichita State University with a degree in Business Administration, and then earned his MBA from the University of Arizona. A late bloomer to the insurance world, Dean joined with what was then GE Capital Assurance in Overland Park, KS, as a captive agent selling long term care insurance for Genworth in 1999, and after earning the title of Master Agent, broke free of the captive status and served as a consultant to Personalized Brokerage Services in Topeka, KS, when they were developing their LTC Division. For 10 years Dean managed the Senior Products Division of Forrest T. Jones & Company in Kansas City, MO. While serving in this position he quickly understood the need to guide individuals who needed assistance when they became Medicare eligible. This in turn became the major thrust of the division, and thousands of prospective clients were assisted, primarily members of the Missouri Retired Teachers Association. Dean became widely known as “The Medicare Man” throughout the association of more than 25,000 members. Dean then formed his own agency, Senior Products Insurance, which is now located in Shawnee, KS, and eventually sold his book of business to a firm in Iowa that specializes in managing and servicing insurance clients on behalf of agents. Dean is licensed to market life and health insurance products in 11 states. Dean and can be reached at, or at Senior Products Insurance, 15729 W. 62nd St., Shawnee, KS 66217. Telephone and text: 913-909-3749. Email:

Younger Prospects—How To Capture Them

For most Broker World readers, the generations dubbed Gen X, and Millennials, can represent an entirely new challenge as their way of looking at the world and living their lives has been shaped by different factors than those of post-World War II and earlier Baby Boomers. They are normally not prospects that have already accumulated a nest egg and, for the most part, they often feel they are invincible! In addition, many have children they need to feed, clothe, educate, and they are paying for dance lessons, athletic events, etc. while also striving to succeed professionally in their chosen career path. The list goes on and on…

Added to the myriad factors listed above, many Baby Boomers have parents requiring services. While this may expose them to the “why I should have” factor of products like long term care insurance, these prospective clients still often counter their own acknowledged need, knowing they would have to come up with additional revenue to pay for any insurance premiums. In addition, they often think they will be able to purchase their protection sometime in the future when they are more financially ready to do so.

Even when confronted with caring for or seeing the challenges of the senior generations in their family, it is difficult to project getting older ourselves.

Society has encouraged, both overtly and subliminally, most younger prospects to lock into many of life’s golden rings, such as having an expensive mortgage, large college tuition debt, potentially multiple car payments, mounting credit card debt, and an entire list of “needed” expenses. Placing yet another monthly payment on top of what already seems to be an insurmountable mountain of financial payment responsibilities often becomes the major limiting factor in marketing to this segment of our population.

Any insurance agent that has approached a prospect generationally younger than themselves understands the reluctance prospective clients may have in purchasing other much-needed insurance products to protect against catastrophic losses. Most of the time insurance is not a “requirement” as it is with auto no-fault liability or mortgage protection insurance. It is an informed decision purchase or choice; not an obligation. Therefore, the first step in marketing to younger prospects is getting information to them regarding why your product makes sense—first logically, and then emotionally, but most importantly in terms that “speak their language.”

Getting the Message Out
Hello technology! The buzzwords today include Snapchat, Instagram, Twitter, TikTok and Facebook, among others, with new ones every day. If you are not embracing these communication tools in educating a younger crowd, someone else is. If you feel you are too old to teach yourself new tricks, then you may have to simply bow out of this segment of the market, or at the very least engage someone to do the marketing for you.

What you communicate in the social media markets must be short, concise, and your content should be relevant and topical. It has to be something that younger generations engage with, as well as being tied into your overall brand or digital marketing story. For most seasoned insurance professionals, this means having to either learn another marketing method or bring aboard someone that is already savvy to what the younger generation is seeking in the way of messaging.

Ever watch a television commercial and at the conclusion wonder what they were marketing? That is the new normal—just to capture their attention, show a positive image when using the product or service, and then leave the audience grasping for more information. Crazy, in that we used to grab someone’s attention by offering them an incentive to take some action. Today this market prefers to explore on their own. The best way is to provide a link for more information. Websites are imperative, but a way to lead them to take this drink of water has grown to encompass displaying a QR Reader to access more data independently.

While social networking is not necessarily a favorite topic with most seasoned insurance professionals, and it certainly has not always been vital in the past, my friend, as they say, “The times they are a changin’.”

Here’s a twist on an accepted method of learning how to reach younger prospects. Offer an incentive for a random number of individuals to take part in a Focus Group. The panel would include several individuals in the age range you are attempting to sell. Give them an incentive like a prepaid credit card to participate (potentially using a conference room, or even a Zoom meeting approach). Then use this focus group input to develop the key elements of attractiveness of your insurance product and marketing for this cohort. Even more importantly to you, learn what it would take to get them to want to meet with you or someone at your agency to discuss why this product makes sense for them to have.

In the non-profit sector the saying goes “people are sold to help the cause, but they still nearly always give to the individual.” Insurance sales are no different. Your marketing effort needs to start with the logic behind the need, and then follow with the emotional elements in landing the sale.

Larger Market Segment
One-on-one selling requires genuine ability. It has been said that only seven percent of the working adults in this country have the explicit responsibility of selling a product or service, and less than 20 percent of those selling are truly accomplished at what they are doing. Sales leaderboards prove the latter, time and time again.

So, if you are rarely a frequent leader making one-on-one sales in your agency, consider another tactic of going after corporations or associations. A vast majority of the younger market holds a job or often belongs to a non-profit association. Therefore they are somewhat captive to benefits being offered by their corporate office, and often have ancillary benefits being offered by their association. If the company provides your insurance product as a potential benefit, then, when the employee elects to take your product, it often can be automatically included in a payroll deduction. Group sales is vastly different from individual one-on-one marketing. Yes, you first must sell the individual within the company as to why your product should be included in the cafeteria list of potential benefits. But once securely in place you will most likely have an ongoing method to sell your insurance.

Things do not always work out, even when you have done everything right (sound familiar?). A personal experience was convincing a large truck distributor on the value of offering long term care insurance as a benefit for their employees. The owner wanted the benefit, and the group rate was lower in premium expense, so he thought having a group rated premium would be to his advantage. However, the bookkeeper informed the owner that their payroll checks could only have a limited number of deductions. You would think that someone that was sold on the insurance product would have shaken the limbs and found a way to add long term care, but he chose to simply purchase an individual policy for the couple. The sale was not lost, but the opportunity to make multiple sales was no longer as viable as it would have been having a payroll deduction type of sale.

Certainly, the concept of marketing to younger individuals through payroll deduction can be a viable alternative to pounding the social media pathways to see if individuals might take a bite of the apple.

Selling Viable Products
Find a way to capture a younger client on a needed service, and then use that client as a springboard for referrals or to add products in the future. An example might be to demonstrate why having a check in the mail could save a family’s finances when the client is injured and off work. Aflac comes to mind in how they demonstrate filling the financial gaps when a health issue arises which is not covered fully by health insurance. Or, why disability income can continue to provide much-needed income when you are no longer able to work. If you have captured your prospect’s attention with the reality of not having certain types of insurance coverage, then you pivot to the emotional side of the consequences if not properly covered.

Many insurance agents focus on annuity type sales. They are excellent products for planning for the future. However, a large segment of the Gen X and many in the Millennial population do not already have a large amount of funds set aside to invest. One potential way to work with the prospective client to win them over for the long run is to demonstrate the power of compound interest.

Gen X Example: At age 25 invest $300 (assumes tax-deferred fund), and limit household spending so the client can budget a way to invest another $300 per month in the same investment through a planned retirement at age 65. If the fund earns an average of eight percent compound interest, your client will have accumulated over $1 million by the time they reach age 65. To demonstrate the need to move forward now, rather than waiting, show the client the result of the same amounts being invested only 10 years later. Starting at age 35, the retirement fund is less than $500,000; and at age 45 less than $200,000 will be accumulated. This demonstrates the importance of investing early and continuing to invest.

(Note: you can verify this at using their compound interest calculator.)

Once you have demonstrated how you can be instrumental in helping your client achieve a long term financial goal (and who wouldn’t want to be a millionaire?), then you have captured their attention on how you can be a valued part of their future. As the client grows their employment earnings, then you are there to suggest ways for them to best invest a portion of any new payroll check growth. A friendly way of saying that you can help your client achieve financial freedom by putting that Christmas bonus in a long term growth investment! This is a lot like getting a base hit, rather than a home run. However, the client will always look to you on how to get to the next base.

Other Ways to View Products being Marketed
Most individuals cannot envision more than 15 years in the future. Try doing it yourself and you will have a very hard time thinking of yourself being that age or older. For that reason, products like long term care insurance have limitations on saleability to younger prospects. However, you will still want to market insurance products which mimic long term care in the youthful household. In addition, if your client ever cashes in on this product, you will immediately get a prospective client for a full-blown long term care sale if the client can then still qualify.

The insurance product is commonly known as short term care. You don’t market it as a way to pay for “nursing home” expenses, as younger prospects will never see themselves needing care in an “old folk’s home” as that stigma remains today. You address the value the product has in providing care for the client in the comfort of their own home, giving their partner the freedom to continue earning an income for the family during the health recovery. This type of insurance is rarely an emotional sale to the individual that may need care; it is for the spouse or partner knowing things will not turn totally “South of the Border” in the household while figuring out what options may be available depending on the extent and length of care needed.

A similar scenario occurs when marketing life insurance. Nobody that dies ever personally gets the money to spend. Therefore, the emotional marketing target is the spouse or the beneficiary. The primary wage earner (or potentially both income earners) has a moral commitment to provide for those family members that remain when they are no longer living. The insurance industry has provided a simple way to provide the remaining family members long term financial protection using term life insurance. For only a few dollars per month in premium expense, hundreds of thousands of dollars can be made available to the remaining loved ones in the event of the client’s death. The emotional impact of presenting this product in front of both partners will generally seal the deal. So, the important aspect in marketing this insurance product is finding ways to get in front of the target audience. Remember that younger prospects cling to social networking. Use that source to line up your appointments, or possibly consider paying for leads where the prospect has already expressed an interest. Have you explored the thought of having a YouTube presentation on how valuable term insurance can be to a family, and offer this as a click-through at your website? How about asking a true beneficiary to also express his or her gratitude in receiving the check from an insurance company and why it made a difference?

Younger prospects need facts as to why they should set aside earnings to purchase your insurance products. You must demonstrate why you can best supply their needed products in the present and over the long run. After all, they know they can purchase insurance from many sources, so what sets you apart is your perceived value to them. And, you need ways to stir their emotions to make the sale.

Getting the attention of Gen X, Millennials, and increasingly the Baby Boomers, takes a new marketing strategy to first get the opportunity to visit with them, then demonstrating why your products are so valuable, potentially critical, as well as affordable, and why you should be their partner in providing needed solutions as they age.

The reality is that the vast majority of people likely relate best to someone within their age range when making these types of decisions and purchases, so as you and your agency grow, consider having a range of providers on your staff equipped to provide services to all age groups.

Agency Asset Protection


The vast majority of those reading Broker World magazine are owners of, or are value-added contributors to, an insurance agency. As such, you are very familiar with the various insurance planning means of protecting your clients’ assets, and also growing those assets through annuities. However, too often overlooked is protecting the “asset” of your own agency. Very much like the mechanic that fixes his customer’s vehicles before taking the time to fix his own, or the fable of the cobbler’s children who have no shoes. Therefore, this article is primarily about ways to preserve the ongoing value of your agency in the event you are no longer able to personally do so.

Every agency has certain tangible assets, such as furniture, equipment, website, supplies, software, etc. Those types of assets remain even at a time when you are no longer running the business. While sometimes difficult to establish a true value, many of these assets can have an ongoing value to your successor. Because they can be accounted for in the event of a serious disaster, such as a fire, theft, or wind damage, establishing a value for and protecting these types of assets is normal in insurance planning on the property and casualty side. If you do not market P&C products, meet with an experienced agent that does.

However, the most difficult assets in determining a price value are those intangible elements: The value you personally contribute, your staff experience, established contracts, reputation and contacts of the agency, real estate lease, name recognition, and renewal income stream. Other than renewal income and your real estate lease, we often refer to these types of assets as Goodwill. Both tangible and intangible assets establish the value of the agency. Planning for protecting this value is essential!

As your agency grows over time it becomes an ongoing income stream for you and your family. Along the way you have insured the continuance of that revenue through hard work and quality servicing of your client base. So once developed, the next step is to consider succession planning.

When I first entered the insurance industry I did so as a captive agent selling only long term care for one carrier. As such, not having any idea if my new career would become my true calling in life, I did no futuristic planning when I entered the insurance industry. As a result, each of my sales applications were submitted using my name and personal agent number. When I broadened my horizon and decided to add additional products offered to my prospective clients, I never thought twice about the eventual impact of what would happen to my agency income stream in the event I was retired or no longer living.

While some carriers will continue to pay your estate on a residual income basis, even though you are no longer actively marketing their products, two new sectors became an ongoing potential issue for me: Medicare Advantage and Medicare prescription drug plans. These two products require annual recertification to continue to receive residual income. If I became mentally challenged, or deceased, taking those tests was no longer possible. To add to the picture, I had reached the point where Medicare clients had become my top money-maker. It was at this point that I realized my estate would receive very limited value when viewing only my tangible business assets.

Had I initially incorporated my business, most likely as a subchapter S or limited liability corporation, and had submitted my applications using my corporate name and tax number, then my agency would have received ongoing income even if the agency was sold. Even so, that still would not satisfy the requirement to recertify annually unless the transfer of my business occurred with an entity that had an agency representative that did certify. This would have been a possible solution if I had a partner in my agency. But, like so many marketers of insurance products, I eventually had a one-horse stable.

Another option that I gave serious consideration was to locate a firm that would service my existing customers while allowing me to continually market to new clients. The “fun” side of insurance is in landing new clients. Servicing of existing clients is often a very time consuming task with the thought of retaining your ongoing residual income. Any agency depends on a constant flow of new clients while servicing existing clients.

A major factor in considering the thought of having existing clients serviced by another agency was a fear of the service firm literally “stealing” my client information and then converting clients to their book of business. One way to protect yourself from loss of client integrity is to enter a binding contract with the servicing firm preventing this from happening, and doing so prior to sharing any client information.

In addition to referrals, one of the most profitable aspects of having well-serviced existing clients is the opportunity to obtain spin-off sales when you have given them suggestions on how other insurance products could enhance their position. You are giving up this opportunity when using an outside service firm. However, the positive side of an outside servicing option for your Medicare clients in particular is that due to the Annual Election Period for Medicare Advantage and Medicare prescription drug plans, a vast amount of the agency time is not only spent finding the best overall insurance solution for existing clients, but knowing there will be no increase in income in placing the client with another carrier. This is a very time-consuming effort. Even with sophisticated software quoting systems, there is still a lot of time spent in soliciting the right to generate comparative quotes (with first obtaining a signed Scope of Appointment form) and then the follow-up time in presenting those options to the client. Having a licensed agent working for your agency that can do the necessary steps with your clients is one way to eliminate the need for having an outside servicing firm. However, the cost of staffing may exceed the loss in income by having an outside service firm.

The ultimate dilemma for me: (1) Bring aboard a licensed partner knowing that any of my existing personal business residual income would be lost in the event I was unable to remain licensed and certified; (2) sell my book of business and retire; (3) continue selling while turning over the servicing of my clients to yet another outside firm; or, (4) sell my book of business while retaining the right to sell for the agency that acquired my accounts as a Licensed Only Agent (LOA).

Ultimately, knowing that my age would eventually limit my sales and ongoing servicing ability, what I determined to be the best solution was to find another firm that would acquire my book of business while allowing me to continue selling as a LOA for that agency. Other options may fit other agencies better based on your unique needs and goals. In three previous Broker World articles I reviewed that time-consuming and demanding process, as well as the major factors in arriving at my choice of a successor to my business. And, yes, most insurance carriers will allow a transfer of client accounts. However, please note, the process is different with each carrier. With a predicted drawn-out process, always think about the ability of your successor to stay the course while your client base and residual income is in the process of being transferred. At the very least, obtain a formal agreement giving the acquiring agent or entity full rights and obligation to acquire your book of business at a predetermined price, even if you are not yet ready to liquidate (in essence, a future sale giving your estate ongoing income in the event of your death or limiting health condition).

While selling your book of business only satisfies the income stream portion of your agency, it is the most significant segment. Your other tangible assets will always have a ready-made buyer if the price is fairly determined. Other concerns include any property lease obligations, staff severance agreements, file maintenance (Medicare requires verification of client contact information for 10 years), changes to your website, communications with your existing clients about the decision, and more.

The list of what to consider when choosing a successor, transferring the book of business, and grappling with myriad unexpected details, is quite lengthy. A definite need is to let your clients know (in writing) how the transfer of the servicing of their account protects them from your potential unexpected departure from the business. Remember, not all clients have published or current email accounts, and they often do not open their email. Document your departure in the form of a letter via U.S. Mail to all existing clients, preferably with a picture of yourself and your successor as a formal introduction.

My mission in life became apparent when I realized the value of my service to my clients. Upon the sale of my agency and pseudo-retirement, my new mission has become conveying my knowledge by assisting others in a similar situation. If you would like additional ideas on how to best sell your agency, please feel free to get in touch with me. Certainly, I am not going to personally acquire your book of business, but I can help you wade through the multiple steps in determining your potential options. It is important to note that most acquisition firms are not limiting their approach to only Medicare type agencies, so even if you do not have the recertification issues of Medicare, any third-party advice may become valuable in your final decision when it comes to succession planning.

Note: I rarely answer phone calls from numbers I do not recognize. However, I am reliable when you send me a text at 913-909-3749. Now that I am retired the easiest contact method is to send me an email to my personal account:

Succession Planning Strategies And Tactics


To orchestrate the successful transition of a retail senior insurance practice, much effort will be required in building a comprehensive plan, as well as executing many important details. In this third and final installment of my succession planning series, we’ll discuss the track my buyer laid out for us to run on this year. This applies to any type of insurance business, but mine was primarily Medicare.

Phase I—Documentation

  1. Signed purchase agreement with key terms and conditions.
  2. NIPR report on the seller for all state licenses and carrier appointments.
  3. Carrier-specific Agent of Record (AOR) forms for all active MAPD/PDP accounts.
  4. Assignment of Commissions (AOC) forms for all active Med Supp/Ancillary accounts.
  5. Seller W-9 + voided check for deferred payments (if applicable).
  6. License-Only Agent (LOA) contracting through buyer agency + carrier releases (if applicable).

*Phase I Important Consideration*
You may (should be) thinking, this is a lot of information—it’s true. Let’s re-consider the “Who” focal point of my previous Broker World article—regardless of the offer, you could cost yourself thousands of dollars by making the wrong decision. Dollars of actual currency, time, or relationships—and always be cognizant of the fact that the highest offer isn’t always the best one.

The firm you choose must have a track record of servicing a volume of clients like yours along with the technology and support to execute on the plan. Doubling (or more) the size of an agency by adding your practice is a tough ask for an agent. Wholesale firms’ clients are agents and agencies, not seniors. The experience for both your clients and yourself is important!

Phase II—Processing

  • Tasks for All Active Seller Accounts
    • Completed entity and personal licensing for active states.
    • Completed entity and personal contracting for active carriers.
    • Ready to Sell status for active CMS products.
  • Weekly Follow Up on Carrier
    • AOR processes on CMS accounts.
    • AOC processes on Med Supp/Ancillary accounts.
    • LOA processes on desired retained carriers (if applicable).

*Phase II Important Consideration*
If your buyer doesn’t have the infrastructure to manage these projects, future revenues will not transition correctly. If you have a buyer who is not concerned or focused on these critical details during your due diligence process, you are in for a long and messy transition. When preparation and diligence is taken with these tasks, the entire process should take 90 days or less to complete!

Phase III—Integration

  • Business
    • Websites/numbers/accounts/communication tools should be transitioned.
    • EFT payments should be received as indicated in the purchase agreement.
  • Clients
    • Seller messaging about the transition should be sent via typical communication method(s).
    • Buyer messaging about the transition should be sent via desired new communication method(s).
  • Producing Seller (if applicable)
    • Systems/processes/technology/tools implemented.
    • LOA contracts in place.
    • New biz customer/account/revenue agreements activated.

*Phase III Important Consideration*
Effective. Communication. Is. Key. There must be open, active and regular lines of communication from the beginning of the relationship through all three phases—for the mutual success of buyer/seller/clients. When in doubt, reach out. This will be a process not an event. You will have a partner for months/years to come (whether or not new business is being written). Mutual respect and understanding are imperative to the long term success of this process!

When I sold my book of business (primarily Medicare Supplement, Medicare Advantage and Medicare Part D Prescription Drug clients) one of my fears was that my clients may not stay with my buyer. For that reason, I didn’t telegraph my intention to my clients. In retrospect, I feel that I would have been ahead in letting every client know that, due to my health and age, I was attempting to find the best buyer to succeed as their personal agent—one that would give them the same amount of service. When the announcement was made it left several of my clients confused, thinking that I had somehow abandoned them. However, also taking on the position of LOA (Licensed Only Agent) for the firm that acquired my book of business, I remained licensed in the industry. This last step was a “comfort zone” to many that otherwise felt that I had somehow abandoned them.

If you are a broker thinking about your own succession plan, I encourage you to let me know and I will share some of the steps that led to my final decision on how I selected a buyer, and how the purchase value was developed using data on each of my clients. Every agent’s business is different, but certain elements in any succession plan are essential if you want a smooth and financially prudent transition.

Succession Planning—The Valuation Stage


In the September issue of Broker World you read my outline of the various options I personally considered on a succession plan of my business. One of those options was to sell my residual income stream. This issue deals more succinctly on the factors that led to my eventual agency sale, along with some planning advice you should also consider if you are considering a succession plan.

Determine Your “Why”
The most important factor touched on in the last article was: “Why.” If you don’t have that covered, you could end up wasting a ton of time and money for both you and your potential successor. With that as your guiding North Star, let’s dig into some of your next critical decisions ahead.

The Who
Once you know “Why” you are doing a succession plan, you need to determine your “Who.” The individual/firm you engage will end up becoming more of a partnership, rather than a transaction. After all, it’s often your life’s work at hand and the commitments you’ve made over a career of valued relationships! You should plan on getting to know and trust your successor- to ensure a smooth transition for you and your clients.

Whether it’s a cash sale, or a deferred payment, the process of transitioning service and relationships built over time is never a “here today, gone tomorrow” proposition. Choose your successor wisely and you will be able to enjoy the freedoms you desire in retirement. Choose the wrong successor, and you may have years of headaches and challenges in front of you! And that, my friend, is a true nightmare when all you wanted to do was retire knowing your clients will be well taken care of while you receive income from the fruits of your labor, rather than seeing your income stream go down the rabbit hole.

How Much?
As counterintuitive as it may seem, you must not start with “How Much.” The highest valuation with the wrong firm will be a disaster. The right firm with a fair valuation will be a much better experience for all parties. Not to say the right firm won’t have the highest valuation, but the former is arguably more important than the latter in this case. Let’s review some of the factors in a comprehensive valuation:

  • Base Revenue Multiplier—A starting point for a Business Valuation.
  • Account Factors—These factors will be asked of your firm if you offer multiple lines of business, and will likely garner a higher valuation for your book.
    • Core Medicare Ratio—What percentage of your book is MAPD vs Med Supplements?
    • Ancillary Ratio—What percentage of your Core Medicare already has ancillary products?
    • Long-Term Care Ratio—How long on the books and age of the client.
    • Life Cross-Selling Ratio—Same as above, identifying sales opportunities for Life.
    • Annuity Cross-Selling Ratio—Same as above, identifying sales opportunities for Annuities.
  • Business Bonuses—Value credits for key structures already in place for successor firm—the more you have in place, the more you should receive.
    • Rolling 12/ 24/ 36 Month Growth—Performance against a benchmark.
    • Entity License—Much easier to transfer value of business with this in place.
    • LOA Downline—If you have downline, whether they are on a Direct Contract or LOA.
    • CRM—If, and what, will be key to a qualified buyer.
    • Staff—Transitions are more efficient with people familiar with your practice/ clients.
    • Independent Branding—Insurance Business XYZ is easier to transition than MyLastName Insurance—unless your name happens to match theirs!
    • Average Client Age—Credits given to proximity to an optimal age fit with their practice.
    • Contracts Above Street—If you possess contracts above Street Level, these would be valuable for someone who has lower levels now.
  • Deal Terms—Each of these factors will change value higher/lower for you.
    • Up-Front Payment—How much you receive at closing.
    • Payment Term—How much you receive over time (and with what stipulations).
    • Commission Splits—Your percentage of your sales on new prospects and/or their sales on your clients, if either are applicable.

If the firm you’re working with doesn’t seem to care about these things, they either don’t know what to ask, have no experience in what they’re doing, or have a model that may not be the best fit for you or your clients. If they don’t know these values for themselves and aren’t asking yours—there could be some bumps along the road!

Warning There are firms that are out there who will price your business for “Run-Off.” What this means is that they will pay you what your book will actuarially produce in future renewals, with room for the cost of money and a profit margin. Or to be direct—They are buying your accounts to effectively die off. There will be no service, intentionally, and your clients will be left dealing with the carriers.

At one point in my insurance career, I needed capital to retire my home mortgage. I settled too quickly. A firm offered me an outright one-time payment of 200 percent of my ongoing long term care renewals. Since that time, I have had mixed emotions, in that with the constant escalation of premiums many of those clients dropped their policies. So having already received my income, this didn’t hurt me financially. However, I still feel somewhat cheated, as the acquiring firm somehow never reported to the insurance providers that a change in agent servicing had occurred, and I continued to receive all the ongoing servicing calls and the need to assist my former clients on what options were best for them when those premium increase notices were received. I loved what I did, and I therefore felt an obligation to help my former clients, even though there was no income generated for my assistance.

In my next article I will put together a checklist, timeline and expectations for What/When/How. Additionally, we’ll consider Best Practices as well as what to look out for at every stage!

Succession Planning Retirement Solutions


As I approached the time when I thought it would be nice to retire, I discovered a lot about my hard-earned insurance book of business. First and foremost, if I didn’t have a succession plan in place, and happened to die or become incapacitated before handing over my business to someone else, the insurance firms would keep all of my residual income. Yep, none of it would go to my estate.

Major alert—get something in place for my heirs before I was no longer here to make that happen!

I had a small insurance agency specializing in Medicare aged clients. It earned a good income annually just from the residual income. Each year I used mainly referrals and direct mail to bring on new clients, and that ongoing effort replaced any lost income due to the death of my clients or those that got swayed by the Joe Namath and Dyn-O-Mite type television commercials. I was comfortable; however, I was growing old like my client base. It was time to let loose and finally enjoy the fruits of my labor.

Options that I considered

  1. Turn the business over to one of my family members. Sounds easy, but they were not listed as a selling agent on the business already sold, so they would not share in any income from my clients that I had already contracted in the event of my death. And did they share the passion for the business that I had learned to love? No!
  2. Bring aboard an experienced agent and let that individual work the business; but again, my book of business was not transferable unless my existing clients were somehow re-written using the agent that I had brought aboard to run the business.
  3. Do an outright sell of my book of business to a firm that had experience in acquiring small agency businesses, thereby giving up any future income stream and paying taxes on the entire book of business sold, or using a Good Will graduated income stream and stretching my payments over several years rather than receiving a lump sum one-time payment.
  4. Continue on with my agency, but turn the servicing of my clients over to another firm by paying a servicing fee, and at the same time giving this firm full ownership of my agency for a predetermined price in the event of my death.

When you reach my age, and have the above options to consider, the logical approach is normally the fourth option. It would allow me to continue operating my business while the other firm does the necessary service work while getting the clients used to the new service, and simply paying that firm to administer my existing and any future book of business. It also would permit a guaranteed payment to my estate in the event I ever wanted to let go and fully retire. Finding the right firm to do this, and one that you can trust, is the real challenge.

The solution I finally chose was an outright sale of my book of business, payable over several years to control the taxation issue, and at the same time becoming a Licensed Only Agent (LOA) for the acquiring firm. I chose this option after receiving five proposals. It also was my choice when it came to electing a firm that I felt would service my clients with utmost integrity. It offered a solid source of income over the next few years so that I could enjoy my retirement when still able to enjoy the fruits of my labor. And, becoming a LOA meant that I could continue selling new clients and know that any new client would be serviced with the same amount of professionalism that my other clients would be receiving. And, as the LOA, receiving any new client regular sales commissions and renewals on those new clients. Lastly, my estate was guaranteed the monthly income in the event of my death.

New industry challenges
My timing was excellent, as Medicare just announced several new 2022 provisions that can and will impact those of us in this industry. The foremost change is now a requirement that any telephone call to a client or prospective client needs to also be accompanied with a recorded conversation. And that conversation needs to be archived for no less than 10 years!

That new requirement will undoubtedly provide the incentive for many Medicare insurance agents to consider their own succession plan—if not an outright retirement! Sure, there will be agents that will forget, or refuse to do the recorded conversations, or fail to properly secure those conversations for the required 10 years. However, if they ever get audited it could mean forfeiting their residual income, fines, loss of their insurance license or penalties.

No, it is best to plan ahead when it comes to succession of the business. It’s best for you, the agent, your heirs, and certainly is best for your clients. In my case, due to my age, the sale of the business worked best. For other agents, letting a solid service firm work the client base is a great solution as you are not giving up control of your business—only letting another service firm perform the necessary functions to keep your clients informed and satisfied. In doing so, it also frees up your time to focus on obtaining new clients. And, perhaps most importantly for you, it assures your heirs that in the event you become disabled, die, or fail to qualify on your annual certification exams, that all your hard-earned residual income will not vanish.

If you are in a similar situation and are considering your succession options, feel free to contact me. I will give you my experience in more detail and why I made the decision to work with the firm that I eventually selected.

There is an entire addendum type article that can be written on the structuring of any sale, including the valuation of the book of business, what needs to be included in the written succession plan, how payment can be received for the ultimate tax advantage, etc. Those topics will follow.

You owe it to your clients so they are not left dangling when you are no longer around to service their needs. You owe it to your spouse or other family members, as they will lose the income stream of your book of business unless you plan ahead. You owe it to yourself so that you can finally enjoy the fruits of your efforts.

Good luck, and good planning!

The Medicare ABC’s


Some agents are extremely successful selling Medicare Supplements, Medicare Advantage plans, or Medicare Part D prescription plans.  Others only offer these products as a sideline to their other lines when working with prospective clients.  This article pertains only to those truly serious about generating an excellent income from the sale of Medicare related products.  Part-time emphasis on Medicare products may earn a little ongoing revenue, but unless you are dedicated to staying abreast of the industry, no amount of best practices will help.

Let’s start with the obvious.  When someone turns 65 they are automatically eligible for Medicare benefits providing they have paid into the Social Security system a minimum of 40 quarters.  Also eligible are those individuals under the age of 65 that have been on Social Security disability for a minimum of two years.  And, many also learn they can “piggyback” a spouse or former spouse’s eligibility when they might not have otherwise personally qualified for coverage. You can learn more about the ins and outs of medicare jacksonville florida and the plans available from Thomas and Associates if you’re interested.

With an estimated 10,000 individuals turning age 65 each day through the year 2020, that generates a very large number of prospects.  How to capture and retain those prospects is information most seasoned agents keep to themselves.  Therefore, this article may be helpful to those wanting to break into this very lucrative market.


You can purchase lists of individuals soon to turn age 65.  The same name list is normally provided to any agent that pays for the list.  You are simply taking your chances with getting your name in front of a sufficient number of prospects in your territory-along with all the other agents with the same intent of signing up that individual.  It works only if you are willing to spend the money to do the direct mailing, and have a good sales pitch to entice the prospect to reply to your letter or postcard.

Word-of-mouth marketing is always the best source of new leads.  You have demonstrated your capability and desire to assist someone, and then they feel good about recommending you to their friends.  This comes over time; the seasoned agent has many satisfied clients.  However, if you are new to the industry you cannot depend on referrals to fuel your new business.

Many agents use clustering methods, such as inviting prospects to a common meeting area to discuss Medicare and the various insurance solutions available once the prospect is properly enrolled.  This is a very cost-effective way to generate leads.  The counter limitation is having to conform to Medicare imposed regulations that impact what can be said, what can be provided in terms of monetary value, when you can hand out business cards, etc.  Each carrier being represented at those meetings will also have a say as to what is said, as their neck is on the line when an agent purports to have solutions that are not truly representative of the products they represent.  One method to guard against an agent promising too much, or by doing comparisons of various plans, is the usage of Secret Shoppers, who attend your meetings to determine if you are accurately representing MAPD and Part D.  A positive in using these cluster-type meetings is that, typically, those in attendance will come from the immediate trade area thus limiting follow-up meeting time. 

Another proven lead generation method is to work with influence centers, such as property and casualty agents that do not want to, or have the time to, correctly cultivate their existing P&C clients when it comes to Medicare.

Often you can station yourself in high traffic areas, like near, but not in, the prescription drug area of a major pharmacy like Walmart, CVS, Walgreen, etc.  Those opportunities are available through your Field Marketing Organization, and normally only during the Annual Enrollment Period.  Selling to prospects onsite is prohibited.  However, a casual conversation may lead to several new one-on-one appointments, and that requires a properly secured Scope of Appointment form.

My success has come from direct mail marketing to association members.  They already have an affinity for their trade association, and often this becomes a true endorsement of you as their preferred agent.


You only have so much time to spend once you have made contact with the individual.  It might be nice to set four appointments per day, hoping to see three individuals, and then sell at least one of those three.  That’s a great goal to set for yourself!  However, in reality, things often limit your ability to meet that extensive of a goal.  And, your cost and distance of travel often limits your time to spend with prospects.  If you only did a percentage of this goal, like selling to only three individuals weekly, you can still achieve financial success over the long run.

Consider selling over the phone.  It is not as effective as one-on-one meetings, but you can cover much more ground using the telephone, followed up with mail, email, etc.  Be cautious about who you call, due to the telephone solicitation rules.  However, once a prospect has requested your assistance, they generally are exempt from the solicitation guidelines.  That’s the real key to having an offer via direct mail that prompts the prospect to send something back to you requesting information.  In my experience, that comes from becoming extremely competent on Medicare Part D… knowing which plan works best for that individual in terms of pharmacy preference, prescriptions used, etc.  This also means never selling a Medicare Supplement policy without also correctly advising your prospect on which of the available Part D plans might work best for them based on their personal needs and desires.  To simply refer the client to is a sure way to allow a competitive agent in the door.  Yes, it means having to certify annually with AHIP and the various carriers you represent, but that is the price of becoming the type of agent individuals want to use and trust enough to recommend to their friends.  It also gives you access to that segment of the market that might want to try Medicare Advantage plans.


What to Recommend
The time-proven Medicare Supplement policy remains the staple product for most agents that devote a high percentage of their sales efforts in the Medicare market.  It is easy to describe, and several options are available, with Plan F being the frontrunner.  To do so you also need to have a true understanding of the prescription plans, as supplements do not include this.  With most seniors taking, or predictably will take, medications, once you get past the adage of “all Plan F policies pay the same,” you need a way to demonstrate your true expertise to your prospect.  That’s where Part D becomes the determining factor for why the prospect should select you over another agent.

Many agents are now also recommending Medicare Advantage plans.  Approximately 35 percent of those on Medicare (currently 55 million) with additional gap insurance now use an Advantage plan.  The rapid growth has come largely from carriers having captive agents and large marketing budgets to attract individuals to hear the story about Medicare Advantage Prescription Drug (MAPD or “All-in-One”) plans.  These work well for those individuals that currently have, and then maintain, their good health.  However, in an aging population medical issues often become increasingly pressing, and then the cost-sharing disadvantage of the Advantage plans becomes a major factor.  For instance, your client develops cancer and needs extensive medical treatment.  On the Medicare Supplement Plan F, generally most of those costs are paid by Medicare and the supplement policy and the client can use the policy with any medical provider that accepts Medicare assignment of benefits.  On the Medicare Advantage plan the client is typically limited to medical providers within the immediate territory.  Also, cost-sharing and other expenses can often add up quickly to the upper limit stop-loss provision of the policy.  Often the stop-loss expense exceeds the cost of a Medicare Supplement policy.  And, if the medical expenses continue into the following calendar year, those out-of-pocket expenses need to be met yet again when on a MAPD.  However, there are MAPD Special Needs plans that cater to specific medical issues, and these can be a true advantage to those with qualifying health needs.  Or your potential client may not be able to afford more traditional insurance, so the MAPD again becomes a godsend for your prospect.  One other instance where the MAPD policy works very well is as a backup plan for VA benefits. 

Medicare Part G plans are just like the Plan F, only the client first pays the federally stipulated Medicare Part B deductible before the supplement insurance kicks in.  These Medicare policies are quickly becoming the leading supplemental gap product as Plan F is legislated to no longer become available for sale in 2020.  The legislative rationale behind discontinuing Plan F is to assure that the client has some “skin in the game” other than the policy premium.  The good news for those considering a supplement is that many carriers plan to permit anyone that has their Plan F at the time the legislation becomes effective can “grandfather in” their existing coverage to a Plan G.  This will mean that only new applicants have to worry about the legislation.  The bad news is that anyone that remains enrolled in Plan F will no longer have any new “blood” in the system…the pool of insureds will steadily decrease as those insured die or otherwise discontinue their coverage.  This could develop into a remaining adverse selection pool, in that an aging population is more likely to utilize their policy benefits and new younger applicants will not be added to that insured pool.  A potential counter to this is having the assurance that during the Annual Election Period of October 15 – December 7, those that have an existing Medicare Supplement policy can elect to move to a Medicare Advantage plan with no health questions asked.


Maintaining your Client Base 
First, the good news.  Most seniors dislike change.  Therefore, once you have them as a client they are likely to remain in your portfolio of clients.  However, with the advent of Medicare Advantage plans, people often want to learn their alternatives.  If you don’t have a good grasp on these types of plans, then your client will assume they must turn to another agent to learn.

A provision of the Medicare rules means everyone currently enrolled in a MAPD or Part D plan can change to another plan during the Annual Election Period.  Some might feel this is a limiting factor, as it means your clients are free to explore other options annually on those plans and you might lose them to another agent.  However, it also is a great excuse to touch base with your clients annually just to assure them their plan is still the best for them, or to schedule a one-on-one opportunity to discuss something new.  Clients like to be stroked, even if it fails to generate any new revenue.  The alternative is to let another agent do this and then you are forced to find a new client just to get back the revenue level you had prior to the loss of that client. 

Many agents use anniversary or birthday cards to stay in touch with their clients.  This methodology has worked well for many years.  Today, with the internet, agents have a very inexpensive way to stay in touch with their clients via email or text messaging.  You are very unlikely to get into protocol trouble by sending an individual a birthday greeting by email.  The client likes receiving the acknowledgement, but you also then have a test of the accuracy of the address.  People do change their email addresses, and if your message bounces you can get on the phone and ask the client for the new contact information.  This then becomes yet another opportunity to discuss not only how they are getting along, but to learn if their policies are working as projected, to pick up referrals, etc.


Financial Capability
Earlier it was mentioned that one goal would be to sell one policy each day.  More realistically, when first getting started, two or three policies weekly would be more realistic.  This still remains a modest goal, even for someone that has never sold Medicare products in the past.  The two to three policies sold per week in year one, compounded over the next several years, results in a very substantial income.  Using an average of $400 commission per plan sold, and only two to three sales per week, that still generates in the vicinity of $50,000 during the initial year.  If you continue doing this in your second year, and you retain 80 percent of the initial year’s sale revenue (generally subsequent years generate a reduced commission rate, and some of your clients will terminate coverage), then in year two your income increases to more than $90,000; then $120,000 in year three.  Of course, you will have marketing expenses in obtaining your Medicare related income, but the net earnings will sustain an agent for many years.  If you had dedicated your efforts to sell more than two to three policies per week, you have not only a full-time income stream, but also a solid income going into subsequent years in the form of residual income.  Those agents that specialize in Medicare earn great incomes and have a steady residual income stream.  And, as most agents first getting started tend to do, they expand their Medicare income by introducing dental, vision, final expense, cancer and long term care insurance to supplement their Medicare revenue.  Always remember, it is easier to market to existing clients than to new clients.  Therefore, the add-on products will come naturally.

Once you dedicate yourself to the senior market you find that it is more than simply a monetary thing.  It becomes your mission to help people resolve their gap of knowledge about Medicare.  It is one of the most rewarding feelings you will ever encounter in the insurance world.  Seniors need your help.