Life Insurance
Making Life Insurance Sales in Tougher Times
by Allan D. Gersten

The word “recession” is on everyone’s mind and news outlets all over the world talk about it daily. Most of us, particularly if we are in sales, like to act as if ignoring economic pain will help us succeed. We want to be positive even when surrounded by negativism. To many, that may seem terribly naive. But is it? Come to think about it, there may be more truth to it than we can possibly imagine.

People who expect to succeed perform better than do those who are less optimistic, write researchers Jonathon D. Brown, Ph.D. and Margaret A. Marshall, M.S. in the book, “Great Expectations: Optimism and Pessimism in Achievement Settings.” People with high expectancies of success work harder and longer and adopt more effective problem-solving strategies than do those who are pessimistic
They conclude a discussion of their findings this way: Although pessimism can have positive consequences under some conditions, optimism seems to be more beneficial. People who hold positive beliefs about their ability generally fare better than do those who are pessimistic.

Financial advisors and insurance salespeople – and everyone else for that matter – benefit from being positive, no matter what may be happening all around them. After four decades in the business, my experience indicates that there is every reason for those in life insurance sales to be optimistic even in tough times. This conclusion is based on the fact that life insurance is an economically insulated product. It is a unique asset class that is uncorrelated to changes in the equity, bond, commodity, and real estate markets.

To suggest that life insurance sales are unaffected by negative economic conditions may seem daring and even somewhat soft-headed. But that’s not so. We have worked with producers over the years who have been consistent in their sales through the worst and the best of times. Whatever the situation, they forge ahead, undeterred by external circumstances.

There are good reasons for such success. For one, life insurance is a bulletproof business, one that possesses inherent value for the consumer in good times and bad. Sometimes, we are so close to life insurance we fail to see its benefits.

Life insurance guarantees are significant. At the top of the list is the promise to pay. It’s worthwhile to remind ourselves that the life insurance industry has never reneged on that promise. It’s no exaggeration to state that purchasing a life insurance policy is 100% safe. That should give us enormous confidence in what we do every day.

If that isn’t enough, life products possess immensely beneficial tax advantages. When our clients understand what this means, it makes life programs extremely appealing. When you compare paid premiums to the death benefit, a life policy will provide a very solid internal rate of return at life expectancy. When you apply the leverage available with gift and estate planning techniques, there will be significant benefits beyond the internal rate of return on death.

It’s true that order takers can have a particularly rough time in tough times. These are producers who view life insurance as a commodity and agents who passively skim sales from their clients and prospects without providing much needed value-added services.

In tougher times, it’s time to behave differently. An agent will lose ground with a defensive attitude and approach. This is no time for the lazy or passive producer who fails to have a well thought out plan of action.

In good times, it’s easy to convince ourselves that our success is the direct result of our outstanding sales capabilities. To put it bluntly, even mediocre producers can look good in good times.

The choice to prosper is entirely up to advisors who are willing to evaluate their practices so they bring knowledge, creativity, and sound strategies to the life issues of their clients.

We often miss a critical point in life insurance sales: In uncertain economic times, clients are more highly focused on preserving financial resources and making them more secure. In these circumstances, they are looking for solutions that will give them confidence that their future is sound and solid. In other words, there is enormous opportunity for producers if they seize it.
Here are tips for success in tough times:
1. Ask yourself hard questions: What is my target market? What do I bring to this market? Do I need to hone my skills and broaden expertise? Do I know this market as well as is necessary to compete and win?
2. Hone your skills in marketing yourself and your products. Are your sales skills as good as you think they are? Have you laid out your blueprint for calls, meetings, and re-sales with your success? Could you benefit from coaching?
3. Keep track of your results. If you’re not satisfied, take steps to make changes.
4. Manage your time ruthlessly. Wasted time equals lost sales.
5. Having target markets is essential in focusing your time, energy, and expertise. This means cultivating the right people and requesting the right referrals.
6. Annual policy reviews are critical and they should be performed with more diligence than ever. Always listen for opportunities. It is important to stay with your customers. Most importantly, provide help to the client. To do this, review family needs, along with estate and business planning. This is how clients will understand and appreciate the value you bring to them. Let clients know that you offer a unique product, one that provides safety so that it may warrant moving assets.
7. Consider entering partnerships to access specialized markets requiring particular expertise. Stay close to professionals whom you admire and are willing to take the time to work with you. Mentoring is an effective long-range strategy for the growth of your practice.
8. Look for ways to influence your target market and individual prospects. Be an innovator. Lead with seminars. Search opportunities to speak in public.

In the final analysis, it’s life insurance itself that drives a positive attitude. As financial and life insurance professionals, we must recognize that it always delivers on its promise and that’s the reason why you and I can succeed no matter what the times or circumstances.
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Allan D. Gersten, CLU, CFP, ChFC, is Chairman of First American Insurance Underwriters, Inc., a brokerage firm based in Needham, MA. He has been in life insurance sales since 1969. He can be reached at 800-444-8715 or agersten@faiu.com.