February 16th, 2021
It’s the start of a New Year. For most people, the holiday season was an expensive, chaotic and stressful time of year. Now, kids are back in school and we have our heads down trying to make an effective start to the new year. This can also be a tough time to generate new client leads. Instead of waiting for ‘new’ clients, focus on existing clients. That’s where policy reviews come in and save the day!
Your existing book of business can be a gold mine of opportunity. Spend some time contacting those existing clients to review old policies and how they align with current life events. What are their needs now, today? Reaching out to clients not only can produce new business but helps to build
Scott Gilpin
Life Marketing Manager
800.541.6705
positive relationships with existing clients. It conveys to the client you care about them and their needs, not only at the time of sale but throughout. Even if the policy review doesn’t produce a new sale, the client-agent relationship is further enhanced, allowing for referrals to friends and family. A referral from a satisfied customer is the Holy Grail. It provides you a new client who already has a positive impression. What agent doesn’t love referrals?!
"Your existing book of business can be a gold mine of opportunity."
In my opinion, policy reviews are not just asking your existing clients to review their needs and the policies that you wrote for them; it’s the time to ask about what insurance products they already have in force. Some
agents only ask about a client’s existing coverage when they are filling out that section of an application but performing a thorough review of a client’s existing products is essential before you put pen-to-paper on a new policy. You can uncover real opportunities when you do this step. It can completely change the path of the policy you intended to write.
Let’s look at a couple of examples of the power of policy reviews.
You were given a referral to speak to a 57-year-old gentleman inquiring about additional life insurance. When you first talk to him, he expresses he is looking for $500,000 of term insurance. He mentions during the conversation also having a 10-year-old 20-year term policy for $100,000 and an old $50,000 whole life policy. He is spending $260 for the term policy and $575 for the whole life. When you dig a little deeper, you find out his whole life policy has approximately $23,000 of cash value.
Option #1 - Simply do what they request
Simply do what he requests and quote a $500,000 20-year term for $1,940 per year. He is now spending $2,775 for all three policies. He’ll have $650,000 of coverage for 10 more years, $550,000 until the 20-year term runs out, and $50,000 whole life to age 100.
Option #2 - Dig Deeper into Existing Policies
You quote a $600,000 20-year term for $2,313 per year, with the intent to replace the old term policy and the whole life. Utilizing the $23,000 cash value from his whole life as a 1035 exchange into a guaranteed UL, he can buy a guaranteed face amount of $51,668 until age 100, with no further premiums. Now, even though he is 10 years older than when he purchased the term policy and 25 years older than when he bought the whole life policy, he is spending $2,313 for a total of $651,668 of coverage for 20 years and the $51,668 is guaranteed to his age 100. By digging a little deeper into his existing policies, you are able to provide more coverage, for longer and for less money. Secondly, you receive more commission than if you sold him his original request. Instead of payment on just the $1,940 term policy, you are now paid on the $2,313 term policy and the $1,180 (target premium and some excess) on the GUL policy. It is a win/win for both you and the client.
I encountered another simple but extremely powerful example that happened a few months ago
The agent I was working with had sold a $250,000 term policy to a woman when she was 50 years old. He realized her 20-year term was close to expiring, so he called to discuss the current situation. When speaking to the client, he discovered she had breast cancer two years ago. We checked on her inforced policy and discovered she only had a few months left to convert the policy. We also determined she was unlikely to qualify for new insurance with her cancer history. The agent ended up
converting a portion of the death benefit before the conversion period ended allowing the client coverage that would last her beyond her term policy and likely to the end of her life. If the agent hadn’t reviewed her file, they both would have missed the conversion period, and she would have been without insurance and unable to purchase a replacement policy. By simply looking at his existing book, the agent was able to not only make a new sale but more importantly, he took care of his client and made sure she had the coverage she desperately needed.
In my opinion, policy reviews are not only a good idea but are a requirement to ensuring you’re always providing the best service for your clients. Of course, policy reviews also provide new and additional sales. I have worked with a lot of agents over the years. Some agents are young and trying to build their book of business. Others are older and already have a large, established book business. For those younger agents, the policy review is a great way to supplement business when work is slow (like this pandemic!). Older agents, or those with a large client base, sustain their practice simply by performing policy reviews. I can honestly tell you the biggest cases I observe through our office are most often existing clients of the agents. Every sale is important. It puts that client in your system, which is a potential sale in the future. If you neglect those clients you have already done business with, you are denying yourself (and them) a goldmine of opportunities. Please let us help you with your policy reviews. Thank you.
