Orphan policyholders just may be a key to success.
As the leader of a large life insurance brokerage agency, one of the things that routinely crosses my desk are lists of policyholders who evidently do not have an active life insurance producer associated with them.
I’m not talking about a few policies on those lists, but rather hundreds of policies.
In our business, we refer to these as “orphans.”
What is orphan status?
Orphan policy status happens with the agent who originally wrote the policy dies or leaves the business; or the policyholder moves away from the agent who write the policy.
The journey to orphan status
Orphan policies gain that status a few ways:
- The original writing agent died.
- The agent left the business.
- The policyholder moved geographically away from the agent who wrote the policy and the carrier subsequently assigned the policy to a local agency for service.
The reasons outlined above are legitimate.
However, there’s one more reason that a policyholder might become an “orphan” and it happens far more often than you think.
Leaving your client in a lurch
It occurs when the life insurance producer simply ignores the client after the sale is made.
All too often, we see the producer complete the sale of the policy and simply move on to the next sale.
They think their job is done – but that’s far from the truth.
There seems to be an underlying feeling that once life insurance is sold to an individual, he or she will not be interested in buying more anytime soon.
The producer assumes these clients don’t need to be serviced.
Unfortunately, this assumption is not accurate.
The fact is that over their lifetime, an individual who has purchased life insurance will purchase a policy six more times.
Here’s what’s even more shocking: Studies show us that those six policies will be purchased from six different agents – including the producer who wrote the first policy.
If this is true, when a policy is sold and the commission paid out on it, that commission theoretically is only one-seventh of what could be earned by the agent who wrote that policy.
That means you’re missing out on huge earnings potential from every client!
Changing how you sell
Don’t let this bad creating-orphans habit take root.
You need to change how you view the sale.
Instead of looking at the transaction as the “selling of a policy” – a single act – you need to view the transaction as one where you’ve gained a new client.
Most people that have sold life insurance will tell you that this is exactly how they look at that initial sale.
But studies do not support that idea. In fact, they suggest just the opposite.
Want to know how you can make sure that you’re the agent on the next six policies?
It’s an easy method, one that has been suggested to life insurance producers for many, many years.
Make sure to keep in touch with your client religiously by:
- Conducting routine life insurance reviews every 2 to 3 years with each client.
- Making at least one phone call per year just to check-in.
- Sending clients interesting information pertaining to life insurance from time to time.
- Recognizing clients’ birthdays or “insurance” birthdays.
- Using a client-management system to record and be reminded of life-changing events (births, marriages, etc.) and the need for a review.
These five items are routinely used by the most successful people in the life insurance industry and have been for many years.
Be a life insurance producer who sticks
With today’s technology, it has never been easier to accomplish these tasks, maintain a relationship with a life insurance client, and drive sales.
Unfortunately, failure to do so will mean you’ll fall into the old trap: If you’re not staying close to your client, the likelihood is that someone else will.
Don’t settle for only the first policy. Make sure you’re involved in the next six sales, too.
How are you making sure that you’re the go-to life insurance producer for the long-haul?
