As we expand our businesses and look for alternative revenue streams to supplement the financial planning and life insurance products we are selling, many of us are looking for new ideas and new products that complement our current sales processes and customer base.
For example, if I am meeting with a prospective client who is interested in purchasing a final expense product I may have a conversation with them about buying a children’s whole life policy for their grandchildren (see “Don’t Forget the Babies” in Broker World, July 2019) or an annuity, prescription drug plan, dental coverage or Medicare supplement policy. Many refer to this as a cross-sell.
For my team and I, we refer to it as the “sister sale.”
Sister sales happen all around you, every day. For example, when you access a popular online retailer to have items delivered to your home, there is often a list of products at the bottom of the page that says “inspired by your shopping trends.” That retailer realizes that if you bought one product, there are complementary products you also may want to buy.
If you remember your microeconomics course from college, we studied complementary products. For example, sugar and cream are examples of products that have an interrelated use with another good, such as coffee or tea. So, if sales of coffee dipped, so might the sales of cream and sugar. Conversely, if sales of coffee spiked, you might see a rise in sugar and cream sales, regardless of the price of the complementary items.
The P&C industry effectively cross-sells by offering bundles, meaning you can save more money if you purchase your home and auto insurance together. While this works for a commodity like property and casualty insurance, it is not always the case for financial products because there must be a perceived value to the customer. Even if they are told the price is less, if they see no value in having it the customer still won’t spend the money. While perceived value is also important for the P&C sale, a lot of times the customer is purchasing because insurance is required on the home for a loan or for the auto to legally drive in the state. The life insurance customer is not “required” to purchase life insurance, or other products such as critical illness or long term care—that is of course unless their spouse is requiring it.
This brings us to our sister sales idea. Whether you are a seasoned agent or a newer agent, the following may apply to you:
- You need to earn commissions now to pay for leads or just to build your business.
- You would love a way to secure your future and earn larger trail commissions.
- You have your typical sales pitch and you know the drill:
- Final expense
- Mortgage term sales
- Policy review
- Income replacement
If any of these points apply to you, the sister sales idea may be just what you need. And it really boils down to asking prospects one simple question: Who provides your cancer, heart attack or stroke insurance coverage?
When you ask this question, it naturally leads to multiple follow-up questions:
- Wait, you don’t have cancer or heart attack and stroke coverage?
- Are you concerned at all about getting cancer or having a heart attack or stroke?
- You have health insurance, that’s great, what’s your deductible?
- Are you concerned about the “hidden costs” or expenses you might incur should something like this happen?
- If something like this would happen, would an extra $10,000, $20,000 or $30,000 in your pocket make your life easier?
- A 60-year-old male can get $10,000 of coverage for just $20 per month.
- Can I run you a quick quote?
This leads to the second part of the conversation and the intrinsic or emotional part of the sale.
- Do you know anyone who was diagnosed with cancer?
- What would you do if you got that news?
The critical illness products available from many carriers provide a way for someone who has probably gotten the worst news of their life to help plan for unforeseen or unexpected costs, get their affairs in order, or even live out a dream.
- Living the dream could mean taking the family on a vacation or buying something you have always wanted but could never afford.
- Getting your affairs in order could mean paying off debts or bills so your surviving spouse will not have to worry about paying them off or finally having the money to pay a lawyer to write up a will.
- And of course, there may also be unknown or unexpected expenses that also occur with a major event such as a heart attack, stroke or cancer. What if you were in a hospital and your spouse needed a hotel or airfare to be with you? Or what if you needed a wheelchair and needed to build a ramp in front of your home to get up the stairs?
The Benefit to You
Most carriers, mine included, levelized the compensation on these products for the entire life of the product. What this means to you is better trails and a way to build a larger stream of income for your future. Let’s take a simple example and assume 10 percent trails for every year after year one. If you just sold five cases per month, at $50 in ANBP per case, that would equal 60 cases per year at $300 ANBP per annum. You would earn an extra $3,600 per year in trails (not including the first year’s commission). This might not sound like a huge number, but after 20 years would give you an additional $72,000 per year in trails. Imagine what the number would be if you could double or even triple your sales or sell higher premiums! The rewards are significant.
It is hard for me to admit that I am approaching 60. It is even harder for me to think about the fact that I lost two very dear friends of mine this year who were both not yet 60. I have been in the insurance industry for 30 years now and I have a great passion for what we do. I am never embarrassed to talk about the protection we provide. People need to be educated about their insurance options so they see the value and what it will mean in their lives should a tragic event happen.
Your Call to Action
- Ask the question! Who provides your cancer, heart attack and stroke coverage?
- Ask every client, family member and friend you have!
- Go back to clients you wrote in the past and ask.
- Ask everyone you know age 50 and older.
- Write the application, no matter how big or small.
- You can write at least $10K of coverage today and I bet you are even thinking of someone to talk to about this right now.
Most importantly, make critical illness products a regular part of your agent and client discussions. Everyone knows someone who can use this product.