This guest blog post was written by Bob Brzyski, Vice President of Marketing and New Business at Pinnacle Financial Services, Inc. Pinnacle Financial Services, Inc. is an FMO (Field Marketing Office) that works with its agent partners to provide the best in services and technology by making insurance processing easier and more accessible.
Understanding Life Insurance Options & Your Clients' Goal with Life Insurance
There are many types of life insurance available to individuals. As a life insurance agent, you’ll want to know:
- The different product types available
- The amount of coverage that is needed
- How to best structure an illustration
You want to be competitive so you don’t lose the business to an internet quoting tool, but you also don’t want to give them an unrealistic quote.
The ultimate goal as a life insurance professional is to conduct good field fact-finding and field underwriting so that you are able to give the best options to your prospect. Your clients' goal for life insurance could be one (or multiple) of the following:
- A desire to protect their family
- Provide retirement income
- Cover burial expenses
- Help with college planning/saving
So, how can you determine their goal?
First, follow a proven fact-finding process. There are plenty of fact-finding documents that can help you have this conversation. Learning about a client’s family, their assets, current insurance policies, and household income are just some of the important facts you will want to uncover.
Once their goal is discovered, you can offer the best product option from the wide variety of life insurance types and sub-types. These types include term insurance, universal life, and whole life insurance.
If they want to protect their family in case something happens to them, then a term life policy could fit the bill as an income replacement option. If you find that they have maxed out their 401k contributions and are looking for other ways to supplement their retirement income, an index universal life policy might be the way to go.
The next part of the process is looking at if your client medically qualifies for the policy. Field underwriting is incredibly important so that you can give a quote that is accurate for the client’s situation.
Field Underwriting Considerations
There are different considerations to take into account when looking at field underwriting. Here are some to keep in mind.
Obviously, life insurance is less expensive the younger you are. Usually, you are healthier when you are in your 20s and 30s than in your 50s and 60s.
Male vs. Female
A woman's life expectancy is longer than a man’s. Therefore, premiums are less for women than for men.
This category has several factors.
- Are they going to the doctor, and if so, what for?
- Are they on any medications?
- What are their height and weight?
- Do they smoke/use cigarettes, cigars, or chewing tobacco? If they quit, how long has it been?
- What does their family history look like? Has a parent died at an early age due to a heart attack or cancer, or are they still alive in their 90s?
What does this have to do with pricing? Everything!
If your customer is a race car driver on the weekends, a scuba diver in shark-infested waters, or likes to jump out of a perfectly good airplane once a month, they are at higher risk for death. Underwriters are not big fans of these activities.
On the other hand, does your customer participate in 5Ks, are they an avid gardener, or do they belong to a gym? If this is the case, they could qualify for a better rate.
Motor Vehicle Record (MVR)
Does your client have a clean driving record, or do they have speeding tickets and DUIs? Underwriters think, if they are reckless with driving, they might be reckless with their health.
This is similar to activities, especially if your customer is an electrician or works at a nuclear power plant. Any high-risk occupation could classify them as a risk.
How Field Underwriting Improves Your Life Insurance Sales
With the answers to these important questions, you can now give the most accurate rate quote possible.
Also, keep in mind that individual insurance carriers can look at a particular client differently. Just because one company might give your client a standard rate does not mean they cannot get a preferred rate with another.
At the end of the day, when you prepare and give accurate quotes based on the prospect's goals, you are more likely to place the business, have happier clients, make more income, and garner more referrals.
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by Bob Brzyski on Friday, December 2, 2022