The annuity market is undergoing a significant transformation, driven by record-breaking sales, shifting consumer demand, and technological advancements that are making annuities more accessible than ever. Traditionally, annuity order entry platforms were designed for institutional financial firms, leaving independent life brokerage agencies with limited digital solutions. However, with the rise of innovative platforms and growing interest in guaranteed retirement income, the industry is witnessing a shift. New technologies are streamlining the annuity sales process, improving transparency, and enabling advisors to better serve their clients. As annuity adoption expands beyond traditional distribution channels, independent agents, BGAs, and IMOs now have powerful tools at their disposal to navigate the growing marketplace efficiently.

For years, leading annuity order entry platform vendors dominated the financial institutional space, with limited penetration into the independent life brokerage sector. However, that landscape is shifting. iPipeline’s AFFIRM® for Annuities, a multi-carrier compliance and order management system, has long been a preferred choice for Independent Broker-Dealers and Wire Houses. Designed to streamline annuity transactions for carriers, distributors, and financial professionals, AFFIRM® supports both fixed and variable annuity products, ensuring seamless order entry and compliance. More recently, the platform has gained traction among BGAs and IMOs for electronically submitting annuity applications, marking a significant expansion in its adoption.

Hexure’s FireLight® has had an early advantage in the independent distribution space, thanks to its comprehensive digital sales capabilities for both life insurance and annuities. By integrating pre-sale functions, sales illustration tools, and post-sale services into a single platform, FireLight enhances efficiency and user experience, making it a go-to solution for independent advisors seeking a streamlined, end-to-end annuity sales process.

As annuity adoption expands in the independent brokerage space, the broader market trends further underscore the growing demand for these products. Record-high annuity sales, driven by rising interest rates and a wave of retiring baby boomers, highlight a massive opportunity for financial professionals. Yet, despite this momentum, annuities remain underutilized, with many retirees unaware of their potential benefits. The challenge? Complexity. Many advisors and consumers struggle to navigate the diverse range of products, making it difficult to compare options and confidently select the best solution. This is where innovative technology solutions, like BackNine’s Quote & Apply platform, are stepping in to simplify the process and bring annuities to a wider audience.

Total annuity sales posted $432.4 billion in 2024, the third consecutive year of record high annuity sales, per LIMRA. With the backdrop of the best interest rate environment in nearly 20 years, and more than 10,000 baby boomers retiring every day, it’s easy to understand why the annuity market is so hot. Bryan Hodgens, Head of LIMRA Research, puts it best–“Since the pandemic, we have seen a significant rise in consumer interest in investment protection and guaranteed retirement income solutions.” More than 70 percent of the marketplace is in fixed, indexed, and income annuities, meaning the opportunity for insurance professionals to expand their business and work with a wider swath of clients is rich.

Despite the boom in the annuity markets, it’s estimated that only about 10 percent of retirees own annuities. This is in the face of research that suggests the average American would be interested in the protection and guarantees afforded by annuities. For example, American Century Investment’s Annual Retirement Survey found that 92 percent of Americans would be interested in using a portion of their retirement plans to generate guaranteed lifetime income.

The most likely reason for this disconnect? Annuities are seen as complex solutions by advisors and retail clients alike, and carriers can make it difficult to compare different products. It’s difficult to act in your client’s best interest when you can’t easily compare all of the solutions in the marketplace. BackNine Insurance and Financial Services is a BGA that has enhanced their multi-carrier life insurance quoting and eApp solution to now support annuities. This system has allowed agents and their clients to find the best coverage for their dollar in all manners of life insurance, from term life to IUL to long term care. With their most recent enhancement, Quote and Apply can now help you easily find the best lifetime income annuity for each client’s unique case.

As an example, let’s imagine you’re working with a 60-year-old client who plans to retire at age 66 whose only source of guaranteed lifetime income is Social Security. You discover in your meeting that the client has $200,000 eligible for rollover into an annuity. By answering just five questions, you’ll be shown the highest lifetime income solution out of more than 100 different products. You can easily find key details, such as fee rates, liquidity provisions, and surrender schedules, and you can download client brochures or advisor guides. You can also compare the contract to other top options, allowing you to show clients that you’re acting transparently in their best interest with your recommendation.

Financial planners can also use this tool to solve for a client’s income gap–if you know the difference between the client’s expected retirement expenses and their other guaranteed income sources, you can find the most efficient income product for their plan. Once you know your product of choice you can easily bridge into BackNine’s online order entry portal, allowing you to complete forms digitally and collect signatures electronically. This process saves valuable time, reduces new business errors, and makes writing annuity business much easier. While you may have utilized other quoting and comparison engines, what sets BackNine apart is the ability to solve for all insurable needs in one place. As the first multi-product line consumer-facing quote and application system, Quote & Apply empowers agents and their clients to get quotes in seconds and apply in minutes. BackNine also offers a proprietary CRM, BOSS™ (Back Office Support System) to help agents easily manage client relationships and new business.

BackNine’s President of Annuity Sales, Matt Gozdecki, sees Quote and Apply for annuities to get back to the basics, “Study after study shows us that the appetite for guaranteed retirement income amongst Americans is significant, but the insurance industry has unnecessarily complicated that conversation. Quote and Apply lets you take the conversation away from confusing riders, roll up rates, bonuses, and deferral credits, and put the focus back on what matters–protecting lifetime income as efficiently as possible!”’

As the annuity landscape evolves, the role of technology in simplifying the sales process and expanding access to these valuable financial products cannot be overstated. The surge in annuity sales underscores a growing consumer appetite for guaranteed retirement income, yet the complexity of product comparisons and application processes has historically been a barrier to broader adoption. Fortunately, platforms like iPipeline’s AFFIRM®, Hexure’s FireLight®, and BackNine’s Quote & Apply are breaking down these barriers, empowering financial professionals with the tools they need to act in their clients’ best interests. By providing intuitive interfaces, seamless digital workflows, and real-time product comparisons, these solutions are making it easier than ever to incorporate annuities into holistic retirement strategies.

For independent agents, BGAs, and IMOs, the opportunity is clear: embracing digital platforms can lead to increased efficiency, fewer errors, and ultimately, more satisfied clients. As more retirees seek financial security amid market uncertainty, advisors who leverage these technologies will be best positioned to meet demand and drive business growth. The future of annuity distribution is digital, transparent, and advisor-friendly. By adopting the right tools today, financial professionals can ensure they are not just keeping pace with the industry’s evolution but leading the way in providing innovative retirement income solutions.

Why Pacific Life Insurance Company Is Optimistic About The Future Of Life Insurance Sales And Why You Should Be, Too

The life insurance industry has faced a challenging landscape in the last several years, marked by slow overall growth, which can be attributed to economic and regulatory uncertainties, demographic shifts, and the world-wide pandemic. Over this same period, we have witnessed several major life insurance carriers exit or significantly scale back their life insurance businesses. These actions have left fewer players in the independent life brokerage channel, leading Brokerage General Agencies (BGAs) to align with stable carrier partners that possess a long-term commitment to the life insurance space.

Despite these hurdles, Pacific Life has emerged as a beacon of optimism, particularly in the realm of death protection-focused products like term life insurance and guaranteed universal life (GUL). Through strategic innovation, strong partnerships, and a commitment to excellence, Pacific Life has positioned ourselves as a leader in the BGA Independent Life Brokerage Channel, with ambitious goals for the future.

Explosive Growth in the BGA Channel
Since inception in 2017, Pacific Life’s suite of PL Promise products has achieved remarkable success, growing from scratch to a $120+ million¹ annual business over that timeframe. Today, it is the second-largest life distribution channel at Pacific Life, providing valuable life insurance protection for over 300,000 households¹ across the United States. This explosive growth is a testament to the strength of our partnerships with the BGA community. By working closely with BGAs and financial professionals, we’ve been able to deliver affordable death benefit solutions to families looking for protection, underscoring our commitment to the life insurance industry, the brokerage community, and consumers.

This success is particularly noteworthy given the broader challenges across the industry. While overall industry growth has remained modest, Pacific Life’s ability to scale our business with BGAs highlights the effectiveness of our strategy and the resilience of our BGA partnerships. Our dedication to meeting the needs of underserved markets has been a driving force behind our growth, enabling us to provide meaningful financial protection to a growing number of households.

Ambitious Growth Goals for 2025 and Beyond
Looking ahead, Pacific Life has set ambitious growth targets for our life insurance businesses, specifically with the PL Promise suite of products. Given the success of our PL Promise Term² and PL Promise GUL³ products, we have identified the BGA channel as a significant growth opportunity, allowing us to invest in our people, technology, processes, and capabilities. Significant milestones are planned for 2025 and beyond. These goals reflect Pacific Life’s confidence in the future of the life insurance market and our commitment to life brokerage and the BGA channel.

Pacific Life’s optimism is grounded in our extensive resources and long-standing reputation for excellence. With nearly 160 years of experience in the financial services industry, Pacific Life has built a strong foundation of stability, growth, and service. Our PL Promise product suite exemplifies our commitment to addressing the needs of the underserved middle market, helping families close the financial protection gap with affordable and accessible solutions.

The PL Promise Term product, for example, offers highly competitive pricing and an innovative conversion option, while PAL+, Pacific Life’s accelerated underwriting program, ensures a seamless and efficient experience for both financial professionals and clients. Today, 62 percent of our PL Promise business will be underwritten on a No-Medical Exam/Fluid-less basis.⁴ Combined with Pacific Life’s iconic brand and consistently strong financial ratings, these offerings position us as a trusted partner for generations of families planning for a secure future.

Key Initiatives to Drive Future Success
To achieve our ambitious growth goals, Pacific Life has implemented several key initiatives aimed at enhancing our distribution, operations, and expansion of our product portfolio.

1. Commitment to the BGA Community: Central to Pacific Life’s success is our unwavering commitment to the BGA community. The company recognizes that our achievements are built on the dedication and partnership of BGAs and financial professionals who work tirelessly to serve their clients. By fostering strong relationships and providing the tools and resources needed to succeed, Pacific Life helps ensure that our partners are well-equipped to navigate the challenges of the industry to help achieve their goals.
   This collaborative approach has been instrumental in Pacific Life’s ability to protect over 300,000+1 households with affordable death benefit solutions. As the company continues to grow, we remain steadfast in our dedication to supporting the BGA community and delivering value to financial professionals and their clients.
2. Underwriting Excellence: Pacific Life’s Underwriting and New Business organization operates with a mission to deliver a consistent, best-in-class customer experience. By aligning underwriting guidelines, risk class names, and applications across channels, we are streamlining processes to better serve clients and to foster a unified experience. These changes not only enhance the customer experience but also enable Pacific Life to scale our operations effectively, supporting our growing business and consistent underwriting outcomes.
3. Planned Future Expansion of the Product Portfolio for BGAs: Pacific Life is continually evolving our product offerings to meet the diverse needs of clients. The planned future expansion of the BGA product portfolio beyond PL Promise Term and PL Promise GUL reflects the company’s commitment to providing innovative product solutions that address the financial protection needs of families. By offering a comprehensive range of products, Pacific Life empowers BGAs and financial professionals to deliver tailored solutions that resonate with their clients.
4. Leveraging Technology and Innovation: Advances in technology play a critical role in Pacific Life’s strategy for the future. From streamlined application processes to enhanced data analytics, we are leveraging innovation to improve efficiency and support growth objectives. These efforts help Pacific Life remain at the forefront of the industry, delivering value to our partners and clients alike.

A Bright Future for Life Insurance Sales
Despite the challenges facing the life insurance industry, Pacific Life’s optimism is well-founded. The company’s track record of success, combined with our ambitious growth goals and strategic initiatives, positions us as a leader in the market. By focusing on death protection products like PL Promise Term life and PL Promise GUL, Pacific Life is addressing a critical need for financial protection while driving growth in the BGA channel.

As the industry evolves, we are poised to adapt and thrive, leveraging our resources, expertise, and partnerships to deliver innovative solutions that meet the needs of families across the country. With a clear vision for the future and a commitment to excellence, Pacific Life is not only optimistic about the future of life insurance sales but also confident in our ability to be a thought-leader and shape the industry for years to come.[KK]

Reference:

1. Created by Pacific Life Insurance Company data as of 12/16/2024.
2. PL Promise Term is level premium term life insurance. Form series, P16LYT, S16LYT10, S16LYT15, S16LYT20, S16LYT25, or S16LYT30, varies based on level premium period chosen and state of policy issue.
3. PL Promise GUL No-Lapse Guarantee Universal Life Insurance. Form series P18PRUL, S18PRUL, varies based on state of policy issue.
4. Percentage of eligible cases meeting the accelerated underwriting criteria of ages 18-60, standard or better risk class, drop ticket submission, and up to $3M in coverage, or the modified underwriting criteria of ages 18-70 and coverage up to $3M for PL Promise Term and up to $2M for PL Promise GUL. Data for YTD thru 2024 Quarter 3. Created by Pacific Life Insurance Company data as of 9/30/2024.

This article is intended for financial professional use only. If you are not a financial professional, please visit our public website at PacificLife.com.

Pacific Life Insurance Company is licensed to issue insurance products in all states except New York. Product/material availability and features may vary by state.

Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker/dealer, insurance agency, or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company.

Life insurance is subject to underwriting and approval of the application and will incur monthly policy charges.

Broker World and Broker General Agencies are not affiliated with Pacific Life Insurance Company.

The Allianz Life Insurance Company of North America (Allianz Life) 2023 annual consumer survey of Americans’ views on retirement planning found that diverse Americans are re-engaging with professional financial advisors in 2023, rebounding from a drop reported in 2022. Allianz Life found that 36 percent of Black Americans reported having a professional financial advisor in 2023, up from 24 percent in 2022. This is a reversal of the previous year, which saw Black usage of professional financial advisors decline from 38 percent in 2021, to 24 percent in 2022. Hispanic investors report similar shifts in working with a professional financial advisor, rising from 35 percent in 2022 to 42 percent in 2023, after falling from 44 percent in 2021.

The increased engagement of Black and Hispanic Americans’ with professional financial advisors tracks with a corresponding increase in confidence. When asked, “Right now, how confident do you feel about being able to financially support all the things you want to do going forward in your life, Black, Hispanic and White Americans all reported an 80 percent confidence level (a nine point year-over-year increase for Black Americans and a five point increase for Hispanic Americans).

Working with a professional financial advisor on a written plan that maps out how to achieve a successful retirement can be one of the most important steps anyone can take in seeking to secure their financial future. And while the uptick in investors of color working with professionals is encouraging, all groups are still behind white Americans, 47 percent of whom currently work with one.

“It’s great to see an increase in diverse populations working with financial professionals and gaining confidence,” said Travis Walker, business solutions and diversity consultant, Allianz Life. “But clearly the industry has more work to do. We have to really listen to what our clients and potential clients are telling us about what they want, and don’t want, in a financial professional.”

Why not work with an advisor?
Americans who don’t currently work with a professional financial advisor gave varying reasons. And, when those who have a professional financial advisor were asked why they don’t discuss certain important issues with their advisor, diverse investor groups often reported they were using other resources to find solutions to these issues (38 percent of Black Americans, 32 percent of Hispanic Americans and 30 percent of Asian Americans).

These feelings may be due, in part, to some Americans of color having different financial concerns than others. For example:

• 38 percent of Black and Hispanic Americans list “Paying off credit card debt” as one of their top three financial goals, compared to 30 percent of the total population.
• While 45 percent of the total population say “Saving enough and making plans to live a comfortable retirement,” is one of their top three financial goals, only 36 percent of Black Americans say the same.
• 31 percent of Black Americans say “Leaving a legacy for my family” is one of their top three financial goals, compared to 23 percent of the total population.

“The data are telling us that one size does not fit all when it comes to what people are looking for in financial advice,” said Walker. “Now more than ever, it’s critical for financial professionals to approach their clients with an open mind and really listen to their concerns. That’s how we help make financial guidance work for everyone.”

When asked about topics they have not discussed with a financial advisor, but would like to, there are also significant differences among people of color compared to the overall population:

• 78 percent of Black, 77 percent of Hispanic and 69 percent of Asian Americans would like to discuss the possibility of “Unexpected, large expenses to pay for (e.g. damage to home, replace major appliance, need a new car),” as compared to 56 percent of the total population.
• 77 percent of Black, 73 percent of Hispanic and 70 percent of Asian Americans would like to discuss “The rising cost of living will prevent me from enjoying my retirement,” as opposed to 59 percent of the total population.
• 77 percent of Black, 79 percent of Hispanic and 62 percent of Asian Americans would like to discuss “Navigating Medicare and health insurance and making the right choices for my healthcare,” compared to 54 percent of the total population.

“These results show the need for a more holistic approach to providing financial planning strategies,” said Walker. “By definition, that means getting to know your clients better, and using a planning process that takes into account life needs that might fall outside the realm of traditional retirement strategies.”

Diverse populations of Americans, just like all Americans, can benefit from professional financial advice. When asked what might make them more likely to work with a particular financial professional, 23 percent of Black Americans said they would like to work with an advisor who has “similar characteristics to me such as similar age, gender or race.”

“One of the ways we bring more people of color into our client population is to bring more people of color into the career of financial professional,” says Walker. “There are a variety of industry-wide efforts to do so, and our success in these efforts will go a long way toward creating a more inclusive market for financial guidance.”

*Allianz Life conducted the Allianz 2023 Annual Retirement Study online in February and March 2023 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) or investable assets of $150k.

Neither Allianz Life Insurance Company of North America nor Allianz Life Financial Services, LLC provide advice or financial planning services.

Products are issued by Allianz Life Insurance Company of North America and distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.542.5427 http://.allianzlife.com.

This content does not apply to the state of New York.

Allianz Life Insurance Company of North America, one of the Ethisphere World’s Most Ethical Companies,® has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2022, Allianz Life provided additional value to its policyholders via distributions of more than $7.7 billion. As a leading provider of fixed index annuities, registered index-linked annuities and fixed index universal life insurance, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 150,000 employees in more than 70 countries.

Due to the surge in long term care need within the Baby Boomer generation, as they continue to grow older and age in place, many of their children are now turning to financial advisors and long term care professionals for solutions to their own potential needs for these services down the road.

Because their own health is still good, and despite the overwhelming responsibilities being shouldered by this generation in providing unpaid care to their parents, the level of denial in terms of their own potential need for these services remains high.

To combat these negative forces, it must be remembered that it is critical to identify and personalize the need for these services, but also to create urgency on the part of these younger clients.

Urgency begins and ends with the agent feeling the urgency that no matter how old/young a prospect is, that it’s incredible that they have not protected themselves yet. “Why have you taken so long to protect yourself at your age?” “What must happen for you to come to grips with this devastating looming problem?”

No one in their mid-40s is in the same health that they were as a 21-year-old. With time comes change. Their hair (graying or thinning), their skin (wrinkles or sagging), a slowing metabolism, fat accumulation that used to be easily burned off, diminished jumping ability, and slower running speed. Stamina is not what it once was, and there is a greater need for sleep. To this end, most pro athletes have retired because they can no longer compete physically, with longer healing time for injuries and diminished overall performance. How many visited chiropractors when they were 21? Memory changes, and the brain has already begun to shrink by the time a person turns 40. Younger clients are most fearful of the threat of a diagnosis of disease or accidents, which happen to everyone. The key is to protect insurability today.

Is selling to younger clients a one call close? Absolutely! They deal with denial issues just like older prospects and if you don’t help them today with denial and urgency, trying to get back in the home is an effort in frustration. Younger clients still purchase emotionally but do use more logic to support their decision hence why explaining the most expensive cost of waiting—insurability—supplements their thought process.

Urgency begins with the initial client contact. You may have to make more evening or Saturday morning calls to catch prospects at home if they are not reaching out to you. As you speak to them and ask probing health questions, you should close the health section with, “Now I know why you are looking into this important insurance addition to your portfolio.” If they ask, “What do you mean by that?” simply respond, “I can’t tell you how many clients I speak with in your age group who have already waited too long and they can no longer protect themselves. From what I can tell on the surface it appears perhaps you have not waited too long and may still be able to protect yourself.”

Because these younger clients have active professional careers that keep them busy during the day, if you wish to avoid evening appointments you first must remember that, as a professional, your time is no less valuable than any other professional who typically conducts his or her business during the regular workday.

To this end, make up your mind that’s how you want to prioritize your time and be clear when setting appointments. A recommended approach would be to say to your prospect, “l don’t know about you, but after a full day of work I’m drained and don’t always have the energy to concentrate. For important planning matters like this, many of my clients prefer either early morning appointments, say 7:30-8:00 before they go to work, or they come home a little early from work for a late afternoon appointment, say around 4:00-4:30. Which is better for you?” Be clear and crisp with your either/or close. Some agents are so clear about not working evenings that they would prefer to work Saturdays instead. People visit their attorneys, doctors, dentists, and financial planners during normal business hours, why not their LTCI consultant? This is such a testament to belief in the worthwhile work long term care specialists do and how you as the advocate appropriately value your time.

How many younger people have already had health issues in their past that caused them to need help with their ADLs? Certainly folks with bone breaks, sprains, surgeries, bad flu bugs, car accidents, bad cuts, infections, tooth extractions. What if they had never gotten better from those disabilities? I would contend that 100 percent of your prospects have had disabilities that could have had far reaching consequences if they had not healed! This is a great time to peel the onion and dig deep to uncover the real fear and anxiety.

It’s also vitally important for younger prospects to uncover their financial circumstances to include both assets and income streams. Return on Investment (ROI) or Interest on Savings (IOS) may not be the best mechanism for funding the policy while they are younger and still in accumulation mode. For them, premiums may come from current discretionary employment income. Regardless of how they plan to pay for these premiums, not fully examining a prospect’s finances and making a recommendation to buy is like a physician doing an incomplete examination and then recommending a prescription. In medical circles, that is known as malpractice.

What are the consequences of younger clients procrastinating? Once you’ve determined a client’s emotional needs and desires, you can then have them deal with consequences of those dreams not becoming a reality and force them to conclude whether they are okay with that outcome. Ideally, make those dreams shorter term so they can really feel the consequences when you do the takeaway. As an example, “What if you weren’t able to send your child to college due to poor planning, or you weren’t able to save for retirement due to an unprotected change in your health?” This concept is known as the “takeaway.” For more background, read the chapter in How I Raised Myself from Failure to Success in Selling by Frank Bettiger entitled “The $250,000 in 15 minutes” to fully appreciate the power of the takeaway. It will unlock the key for you if you struggle to create urgency for someone to act today.

While conducting your client interview, follow this line of questioning:

• Whom do you have your health insurance with?
• What is the most important reason you have health insurance?
• Would you ever do without your health insurance? Have you ever been without?
• If you had none today, how long would you wait to do something about it?
• What are the main diseases or accidents you worry about? They will often give answers such as stroke, MS, Alzheimer’s, car accidents, which we know are only covered for skilled care.
• Don’t you find it ironic that you only have half a health insurance policy? What are you going to do to fund the main issues you are worried about that you have no real coverage for?
• How does your incomplete health insurance plan impact all your hopes, dreams, and aspirations?

Another complimentary approach while discussing the associated risk of not having protection in place against the need for long term care is to tap into their goals for why they are saving money in the first place. This approach helps them reprioritize how they are spending money and helps leapfrog long term care insurance ahead of some of their other funding strategies and puts it on an equal plane with health insurance. Think of the Maslow hierarchy of needs pyramid with survival at the base and self-actualization up at the top. Most younger people think of LTCI as a “nice to have” up near the top of the pyramid, and our goal is to have them move it down to the base of the pyramid as a “must have” for future security.

• What principally have you been saving your money for? Most answers will involve either retirement planning, college education for kids, or purchasing a retirement property.
• If something happened to your health tomorrow and you had to fund long term care personally, what would happen to your savings strategies?
• How would you feel if you had to liquidate all your retirement savings or college savings and your spouse may never get to retire or your kids go to college?
• Is there any other risk that you can think of other than long term care that could keep you from realizing your lifelong dreams that you haven’t already protected?
• Doesn’t it make sense to have a long term care insurance policy in place to make sure that all your hopes and dreams can be realized?
• Do you see any reason why you would treat the long term care risk any differently than you would your skilled health care risk?
• If you can afford a policy without impacting your lifestyle and significantly altering your savings strategy, do you see any reason why you wouldn’t get this insurance while you have a reasonable chance of qualifying? A great congruence check for agents is asking them if they secured their own LTCI plan. Failure to come to grips with their own morbidity as a “younger” person has a direct impact on their ability to effectively create urgency for their prospects! Plus, how do you answer the question posed by the prospect “What coverage do you have?” if you are not protected?

Creating urgency with younger clients is simply a matter of being passionate as we assist clients in understanding the growing risk and consequences associated with people needing care, and accepting the fact that their health could change instantaneously and appreciating the huge consequences that go along with guessing wrong. No matter how old you are, health changes can happen with a snap of the fingers. The key is protecting insurability today while they have a reasonable chance of doing so. They must be convinced that the consequences of waiting far outweigh the risk of deciding to move forward with protection today.

“If all you have is a hammer, everything looks like a nail.”
—Bernard Baruch

Up to this point we have determined the “why” and the “purpose” of the partnership. Now it is time to formulate the quantifiable objectives your new partner(s) is/are seeking. Asking questions like those asked in the home interview with the client makes this a dynamic experience.

In about 30 percent of the relationships you establish, commission splitting will not be an issue because your strategic partner is not [insurance] licensed and it is illegal to share commissions with them. For this reason, attorneys, fee-based planners, and other non-licensed professionals will not care about this aspect of the partnership. For these people, one alternative method in which you can still “sweeten the pot” for them would be for you to absorb some of the marketing expenses, e.g., you pick up the tab at your joint breakfast/lunch/dinner events. This may sound cost-prohibitive to you, but trust me that picking up a $1200 dinner tab with the prospect of generating $75,000 of commissionable premium is truly a win for you!

For those who do desire to share in the commission, I suggest that the conversation go something like this:

“Jane, in terms of income, just how much money would you like to generate from introducing long term care insurance to your clients?” This is often the moment of truth, and this is when you will ascertain her sincerity, level of commitment and true objectives. Based on your “warm up” conversation, you may know that your partner is contemplating sending a child off to college or desires to purchase a vacation home or new car. Knowing the source of this newfound motivation will certainly make it easier for you to keep them focused and engaged.

If they throw out a number such as $100,000—a number that I have very commonly encountered—be prepared to break down what it will take for them to achieve this number.

I have an actual Excel spreadsheet that will do this for us, but I will often explain it this way:

“Okay Jane, you want to bank $100,000 in long term care insurance commissions. To do this we will assume that we are going to be 50-50 partners; that we will close 80 percent of the clients with whom we sit (this number will be closer to 100 percent with proper Need development), and that 80 percent of them will in turn have the requisite health to qualify for this coverage. If they are already working with you, I am not going to worry about whether they have the financial assets and ability to pay for this coverage.

Further, assuming that you are in line to receive 50 percent of the sale, at $4000 per average household premium, that means you will net $2000 of premium per sale. At 65 percent commission, you will garner $1300 per sale in first year commissions. That means that we will have to place 76 policies, submitting 96 annually, and setting 120 interviews per year or about 2.4 interviews per week. If you can get me in front of that many people on an annual basis, I will put $100,000 in your pocket. This of course will be sweetened by the stream of annual renewals that you will also be receiving for the life of the policy.”

Regardless of the answer, we remind them that they will have the ability to earn up to 50 percent of the production credit or premium, which will then be subject to the commission structure of their personal contract. In most cases, street compensation is more than enough to keep them actively engaged and, after receiving their first commission check, very enthusiastic.

Over the years I have worked with any number of producers who have used arbitrary methodology to determine how the production credit will be split between the advisor and planning specialist. I would suggest that you make life easier on yourself and the advisor and eliminate this stressful aspect of the discussion by simply being honest and forthright and suggesting that the standards of the Million Dollar Round Table (MDRT) be applied to the partnership. This is especially important if you are working with multiple partners in the same firm. Having different compensation structures in place is a recipe for disaster.

Before jumping into that aspect of the negotiations I have found it useful to preface it with a quick review of some basic assumptions that goes something like this:

“Jane, as I mentioned to you earlier, I have no desire to take your client list. I personally do not like cold calls, I know your clients won’t like receiving cold calls, and, upon learning that you gave me their name and number, may take great exception to that and may want to have a few choice words with you. It is a lose-lose-lose proposition and may even create problems for both of us in terms of violating Do Not Call statutes.

I also want to reiterate that you earn your portion of the commission by retaining control of the relationship with your clients. They trust you; they appreciate you and know that you have their best interests at heart. For this reason, I want to become your trusted associate on this one aspect of their financial plan. I don’t merely want “access to your book of business” but rather are offering you a turnkey marketing system comprised of me, thirty other agents, a general agent and his staff, as well as multiple carriers fully equipped and capable of providing support at every stage of the process to bring this valuable coverage to your clients.”

I then suggest that you again confirm what financial expectations that the advisor or firm may be harboring. After they have put this number on the table, you can then proceed to outline the terms of the MDRT program. If I accompany the agent to this interview, the dialogue will often go something like this:

“Jane, as you may recall, there are five aspects to the MDRT Standards for splitting commissions. We have found that utilizing them has made life simpler and more agreeable for everyone.

The first 20 percent is assigned to the owner, or agent of record, of the client. In this case, you clearly own the client relationship and are entitled to this first portion.

Secondly, who is setting the appointment? As I mentioned, your value to our partnership is the ownership of the client relationship. If you are broaching the subject of long term care with your clients in the course of annual reviews, phone calls, and other follow ups, and are the instrument of getting me in front of your client, ideally here in your office so that you can be involved as well, you earn that 20 percent as well.

The third piece of the puzzle is the actual sale. Now, if you are here in the office, make the introductions, do a review of their portfolio, and then excuse yourself while the agent conducts the interview, but come back at the end to validate the plan design and to solidify the sale, we will split this 20 percent with you, bringing you to 50 percent of the commissioned sale.

The fourth piece is awarded to the person who is doing the heavy lifting in terms of the application processing, obtaining medical records, and completing all aspects of the sales process. This clearly will rest with the agent.

The final piece is awarded to the agent of record who will conduct post-sale activities and additional follow up. Again, this will go to the agent.

When all is said and done, you are now 50-50 partners, and you earn your portion by managing your client relations, setting appointments, and facilitating the introductions here in your office. Should you opt to do less than this, then we can naturally adjust the split accordingly. So, again, you have the opportunity to earn up to 50 percent of the sale. Does that sound fair to you?”

I have found that when you position the split in this light, there is no disagreement, and you are still affording them choice on how to conduct their business. I would also recommend that you frame up a mutually agreed upon Vision and Mission Statement that adequately portrays your common goals for the partnership. With this plan in place, you can now move on to the marketing plan which is key to all success that you will enjoy in this budding relationship.

Take A-ways:

• Be in the position of offering your strategic partner a choice on how much of the commission they are willing to work for.
• Using the MDRT standards for commission splitting eliminates both subjectivity and oftentimes any feelings of greed on the part of your strategic partner.
• It is important that there just be “one deal” on the street associated with your agency in terms of commission and premium splits. More than one can be a disaster and ruin your reputation.
• Since many consider money as the root of all evil, it is imperative that you establish a clear understanding regarding the sharing of commissions or how they will be compensated if commission-splitting is not an option.
• Other motivating factors for the partner may include client retention, asset protection, and the concern for client well-being. This is the Need aspect of the arrangement. Emphasize these points on a regular basis.