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Selling Final Expense

If it’s one complaint I often hear from agents who work the final expense market its retention. After all policy retention will affect your commission, carrier contracting, and your time. If you’re paid an advance it can be daunting. Therefore, let’s discuss how to improve that aspect of the market.

Have you heard this one? “…don’t worry about chargebacks in final expense, it’s all about the numbers…you’ll have so many applications and policies in the pipeline you won’t even notice.” While that might be true if you’re submitting and placing 10-15 applications week in and week out, for the average agent doing half that amount (5-7 applications) it can feel like you are never getting ahead. Sending half your week chasing down NSF’s just to get policies back on the books.

It makes little difference financially if you are an average producer or large agency processing 50-100 applications a week; with an average premium of $45 per application, that’s a lot of lost revenue. It can be the single reason of going broke getting out of the business altogether.

Policy retention starts at the point-of-sale. Like all life insurance sales, final expense is sold on emotion. As part of your presentation you need to paint a very significant picture of what kind of position their families will be left in when, not if, they pass without a life insurance policy to care of final expense needs.

Next, comes benefit size and premium. If you’ve painted the right picture discussing their options along with the average cost in today’s dollars they’re ready to buy. Most agents go for the big sale right out the bag. “…you need $20,000 to insure you’ll have enough to cover the costs and here’s the monthly cost…when do want to get started.”

To improve retention don’t do that. Find out what’s in their budget. Go over their monthly income verse expenses. Keep the premium within 10 to 15% of what’s remaining. That simple exercise will show them they can afford the premium without changing their life style.

From there, you’ll reach the point of gathering the banking information for premium drafts. Explain thoroughly how the process works. Tell them insurance companies will always be a couple of days late after their chosen draft date. Most final expense life insurance carriers offer Social Security billing cycles when it comes draft date options. Use the actual date they receive their check as the chosen draft date.

If the date is close to a month out, call them the week before. Let them know they have qualified and to expect the initial draft to be on… Send out a card in month two before the next draft date thanking them for their business letting them know to call you if they have any questions and if you can help out anyone they may know.

While reaching a 100% policy retention in life insurance sales, regardless of market, is near impossible, adding these steps to your point-of-sale in the Final Expense market will keep your retention in the 80% plus arena instead of 70% or less.

 

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