Zachary G. Cole

As a relatively new advisor, I have experienced the ups and downs, failures and successes of launching a new career in the life insurance industry. Needless to say, sticking with it hasn’t been easy, but the entrepreneurial goal of creating and building my own business, rather than trying to climb a corporate ladder, keeps me focused.

I understand and embrace the fact that success is the function of the effort I’m willing to put into the job. Of course, the potential financial upside in the life insurance business is a strong motivator as well.

There have been plenty of surprises in my career so far, but none has caught my attention more than how few young advisors I come across. This needs to change. Based on my experience thus far, this is a great industry filled with opportunity.

With that in mind, here are some thoughts about what I’ve learned so far. Hopefully, they may be helpful to others who are building a career—and a business—as advisors.

 • No one is going to do it for you. You must have a self-starter mindset. You’re in a business that requires you to be your own person, to be self-reliant. And this means that you make a plan of attack so you know what’s required to go from here to there, make a personal commitment to that plan and then attack it.

 • You have to fall off the horse before you can get back on. This is not quite how the expression goes, but it expresses, for the new advisor, the expectation and acceptance that there will be falls and the optimism that one will get back up with confidence. It’s a good outlook to have. While there will be many hurdles along the way, success comes from refusing to give in to the fear of being unsuccessful.

 • Don’t confuse an objection with a rejection. Yes, I know it’s easier said than done, but an objection is not a door closing but an opportunity presenting itself. What can you do to be more helpful? The client may need more information, clarification or motivation to move forward, and it’s your job to provide it.

 • Put yourself in scoring position. It’s unlikely to hit a home run in the first meeting with a client, so don’t expect to do it. Go for a double and put yourself in scoring position for that next meeting.

Your communication skill is the bat that you take to the plate. Like any other ability, it’s one you can hone with practice and experience. Learn from each swing, every phone call you make and every meeting you have. Regardless of its outcome, it will only make you better for the next one.

Of all the elements of effective communication, the most important is being a good listener as you strive to understand your clients’ needs and how you can best respond to and meet those needs—the better you see the ball, the better your chance to make solid contact.

 • Discover the extent of your network. Your ability to develop solid leads through networking is the key to becoming a successful advisor. It’s a function of your willingness and desire to put yourself out there—to show up, to create your own “luck.” It’s discovering that it’s truly a small world.

As I was shuffled out of the office of a busy executive who didn’t have time for me, I noticed he had an engraved shovel from a groundbreaking event. I asked him about it and it turned out that my grandfather, who had been in construction, was one of the participants in that event—small world. The exec suddenly found some time to talk that led to a fruitful meeting and several more contacts from the same industry.

 • There’s a lot to learn but there’s a lot of help. The sheer volume of insurance concepts and products can be overwhelming to the new advisor. As you start the long steep climb up the learning curve, you can expect to stumble. Even so, you would be foolish not to take advantage of the insurance Sherpas in your office. Those experienced pros who have conquered a mountain of knowledge are there to guide you. Learn to cultivate these relationships—your survival may depend on them.

 • Success can only come as a result of a win-win for you and your client. It’s the culmination of your effort, attitude, communication skills and product knowledge that will produce the result you’re seeking.

If you have a Swiss Army Knife, you know how difficult it is to get along without it. It’s like having a whole toolbox in your pocket.

It’s the same with indexed universal life insurance (IUL) or equity indexed universal life insurance (EIUL). This is a type of permanent life insurance that features all the benefits of the traditional universal life insurance but with accrued values that are tied to a stock market index. Policyholders are offered the opportunity to reap the benefits of stock market gains, while enjoying the protection of the policy’s guaranteed minimum interest rates should the stock market drop.

Upside Potential

IUL policies credit interest based partly on the upward movement of a major stock market index; thus, when the market does well, so does your client. Over the life of the policy, this could translate into higher cash value and additional supplemental retirement income. At the same time, the tax-deferred benefits of a traditional universal life policy still apply. However, IUL’s do have a cap rate, or maximum rate, which can limit the gains when compared to a variable policy that has no ceiling (or floor) whatsoever.

Downside Protection

IULs also give policyholders a guaranteed minimum interest rate unlike variable life insurance or mutual funds. So while they’re taking advantage of the market going up, they’ll never suffer losses due to the market going down. Zero is a client’s hero!

Put the Policyholder in Control

As clients’ needs change, the policy can change with them. With this flexibility, the death benefit can change, premiums can increase or decrease, and there are options or riders to meet particular needs. If a client is just starting out in life or working with a limited budget, an IUL policy can lay a solid foundation. Then, as a client enters new life stages, premium payments can be adjusted to help build more cash value for the future.

For older clients who may have a larger amount of money available that’s not needed for current income, there’s an option for making a single lump sum payment. Should the money be needed later, it’s still available.

Builds Savings. Indexed universal life insurance provides a tax-deferred way of accumulating a cash value at competitive interest rates. This can actually be a valuable alternative to a Roth IRA or 401(k) due to the potentially higher interest rates, tax efficient income to the  policy owners, and the ability to withdraw loans from the policy for specific purposes such as education or emergencies, all while maintaining a death benefit.

Unlike other retirement vehicles, there are no limitations on the amount that may be contributed annually to an IUL. As of 2013, the IRS limits the annual contribution to an IRA to $5,500 annually if the account owner is under the age of 50, and $6,500 annually if the participant’s age is 50 or older.

Wealth Transfer. IUL policies can help clients leave a legacy to pass on to heirs by giving them as much of their estate as possible, while making sure the tax and other obligations are satisfied. It can be used to convert “tax-heavy” assets such as IRAs and nonqualified annuities, in situations where original needs may have changed.

College Planning. According to The College Board’s 2011 Trends in College Pricing, over the decade from 2001/2002 to 2011/2012, the published tuition and fees for in-state public four-year colleges and universities grew at an average rate of 5.6 percent per year beyond the rate of inflation.

Another key benefit of permanent life insurance that doesn’t involve death is its potential to accumulate cash value on a tax-deferred basis. Those funds can then be accessed to help pay for college costs, if necessary. Various loan options are available to help clients access the potential cash values within their policies.

Family Protection

The death benefit gives clients peace of mind knowing that their loved ones will not face financial hardship in the event of their death. And the cash value can grow with their family and their needs. The income tax-free proceeds can provide liquidity to help pay estate taxes and expenses.

Under certain circumstances, those who would otherwise be uninsurable on a single life insurance policy due to their health can be covered with another individual under a survivorship policy.

Gifts to Minors. Survivorship policies can be a great tool for allowing grandparents to leave a legacy to their grandchildren.

Charitable Gifts. The policy’s proceeds can be paid to one or more charities or it can replace the amount gifted to a charitable organization in order to provide heirs with the full value of the estate.

Business Applications

Survivorship life insurance has several business applications—from business succession plans to key person coverage. In addition, the benefits that apply to individuals also apply to business owners; however, if a client is an S corporation, there is the option of making the premium contributions as a draw against the profits of the corporation and avoid the self-employment tax/Social Security tax, which results in a 13.3 percent tax savings!

If you’re using IUL with clients, you’ve discovered its flexibility and value. If you haven’t, it may be time to put this Swiss Army Knife in your tool kit.