When dealing with a new client, do you approach the situation with a bit of fear?
Maybe you're afraid of losing the sale to another life insurance producer or perhaps even to the internet.
Without realizing it, you may be setting your clients up for disappointment, too. How will they feel if they don't get the policy they want for the price you quoted because you were overly-aggressive in quoting that price?
Not great. You may even miss the opportunity to place the case.
Fear and over-quoting go hand-in-hand and are big issues, but they're problems that can be overcome with the right strategies.
Here's what you need to know so you can grow your life insurance sales instead of losing them.
Solving the Problem
Both of these issues are easily remedied – and they should be.
You can eliminate your fear by managing the client’s expectations during the sales interview. To avoid the possibility of being underquoted by another producer or having your client find a lower premium on the internet, you need to make the client aware that there are several possibilities for how much the policy might ultimately cost.
Plus, when field underwriting is done properly, any possible disappointment on the part of your client is mitigated.
Behind the Scenes
Obviously, the initial thought in any sale is to seek the support of the carrier with the cheapest price out there.
In the life insurance arena, this would mean quoting them a price based on criteria that – in the minds of the carrier – would make them the perfect candidate. This would include criteria like current perfect health, a an ideal financial situation, no adverse family history, etc.
Although each carrier might have a different name for this underwriting “class” of individual, we will call them Super Preferred.
Unfortunately, a surprisingly few people fit into this class. According to one life carrier that experiences a very high volume of applications, the fact is that only a little more than 15% of the applications submitted to them are issued at the Super Preferred Class with the very lowest premium.According to one life carrier that experiences a very high volume of applications, the fact is that only a little more than 15% of the applications submitted to them are issued at the Super Preferred Class with the very lowest premium.
Don’t Send Your Client Down the Wrong Path
Considering that 15% statistic, this begs the question, why would a life insurance producer ever quote this class?
If your client was about to board an airplane and you knew that there was an 85% chance of that airplane crashing, would you advise them to get on? I suggest not. I think they might end up disappointed!
Even if a producer wanted to be conservative and quote the next best class (let’s call that Preferred), only about 17% of those cases get issued at that class or better. Are we still advising the client to get on the plane?
Most carriers today have at least 4 or 5 “classes” that can be quoted before extra “ratings” are applied for significant health impairments. Each class, as you move from the top down, creates a higher premium for the client.
Manage Client Expectations Right Out of the Gate
This is where it is vital to manage the client’s expectations – or better yet, what they should NOT expect. Here’s what you can do.
Perform Thorough Field Underwriting
Do an adequate amount of field underwriting to see where the client might fit.
Ask generally about medical background and family history. The answers to these two items alone will immediately indicate their ability to qualify for the top classes. If there is even a suspicion of a problem, it’s inevitable that there will be a disappointed client if the upper classes are quoted.
Quote a Range of Prices
Show the client a spectrum of prices that carriers could charge based on his particular situation. If you introduce a best price, a middle-of-the-road price and a lower-end price, the client will have a much better idea of what he might actually have to pay.
Quote Conservatively
Based on the field underwriting, let your client know what price she may be headed for and be conservative. Be upfront with her and tell her that the information that she’s given you might very well pose a problem and result in increased pricing.
Also, let her know that the possible change in price is not a carrier-specific issue, but rather an industry issue. A higher price is a very real possibility no matter what carrier she might deal with.
Simple Steps to Life Insurance Sales Success
The bottom line to eliminating your fear of losing a client and causing your client disappointment for having to pay a higher price is to embrace the following:
- Manage your client’s expectations.
- Field underwrite thoroughly and do not hesitate to ask questions of your client.
- Present more than one pricing alternative.
- Quote conservatively
Originally published 5/16; Updated 4/21
