Memoirs of a Life Insurance Agent | September 2001 Web Exclusive

Web Exclusive: Memoirs of a Life Insurance Agent

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By John Lee, CLU

Are the glory days of selling life insurance truly in the past? John Lee dusts off his fedora and gray flannel suit and takes a us back to 1945.

"Mr. Prospect, you say you can't afford to pay the premium for this life insurance policy. Fortunately or unfortunately someone always pays a premium. If you don't pay this modest premium now, your family may have to pay it in the future by not having what they require in the event, God forbid, of your untimely passing.

Little Timmy won't be able to have that little red wagon he wants. Your darling little princess, Tiffany, may not be able to go to her friend's birthday party because your wife will not be able to afford a pink party dress. And think of your precious wife, Molly. I have a friend who did not believe in life insurance and one night, coming from work, he was hit and killed by a city bus. His wife now has to work making beds at the local Holiday Inn. Don't you agree that it would be best for you to purchase this policy now so you can protect the future of your family? Do you want to pay the premium annually or would the monthly check plan work better for you?"

In 1945 hundreds of thousands of American men returned from World War II to fall into the arms of hundreds of thousands of women and begin the creation of the American utopia of the `50s and `60s. The GI Bill provided college education for the returning veterans, which translated into better jobs, more money and more buying power. The American Dream was finally within reach of the common man: wife, children, a home and mortgage.

There were things to buy: vacuum cleaners, dishwashers, furniture, automobiles, pink party dresses and little red wagons. And as a result of all of this acquisition came a vast cadre of highly motivated life insurance salesmen (women need not apply) whose sole purpose was to guarantee the hard working husband (the family provider) that Molly and the babies would be able to live the life they were accustomed to should he, God forbid, meet with an untimely demise. This marketing miracle lasted for three glorious decades.

Joining the ranks

I entered this rapidly growing industry in the spring of 1956, just out of college, as a sales management trainee. Prior to my employment I, like all perspective agents, was required to take a series of tests designed to determine if I had the aptitude for life insurance sales. The primary test was especially useful to the company because it established, with some degree of accuracy, if the candidate was a Type A: an upwardly mobile, aggressive, extroverted overachieving workaholic. I recall one question that asked something like, "Would you rather make a sales call in the evening or learn to play the bagpipes?" In my 43-year career in the business I never met a life insurance agent who played the bagpipes.

If companies were looking for that upwardly mobile workaholic they found the right guy in me and hundreds of other men. I was the perfect candidate. After a four-year stint in the Navy, I married the girl of my dreams and entered college. By the time I graduated we had two of our three children and our financial goal was to earn an annual income of $10,000. We eagerly entered into that greatest of all American endeavors--granted every citizen by the Bill of Rights--the pursuit of happiness.

Prospective agents came from all walks of life: former schoolteachers, bankers, recent college graduates, discharged military personnel, the disappointed and discouraged. They came with the promise of a brighter future, a better tomorrow. Those who succeeded were rewarded with financial success rarely possible in other endeavors.

The company I joined had one of the finest training programs in the country. My first month, I was sent to Hartford for an extended period of study. Like all new agents, I learned the intricacies of life insurance contracts, scripted sales talks and learned how to use the telephone to arrange appointments (Dialing for Dollars). A lot of time was also spent on teaching us how to close a sale--in other words--how to get the prospect to sign on the dotted line.

The opening paragraph was a script we all became familiar with. It contains several tricks of the trade. First, we were taught to repeat any of the prospect's objections: "Mr. Prospect, you say you can't afford to pay the premium for this life insurance policy." By doing this I, the salesman, affirm that I have heard his problem and empathize with it. This is followed by a motivational picture of the possible loss of Timmy's little red wagon and Tiffany's pink party dress if he does not accept the modest premium payment. This is followed by a motivational story of the unbeliever's wife who ends up making beds at the local Holiday Inn. This statement is concluded by assuming his agreement and finally, not asking for the sale, but giving him a choice of premium payments. All this may sound devious to the uninitiated, but it is simply good salesmanship. The basic premise of intelligent marketing is not to sell the product but rather to help the prospect buy.

During our sales pitch, we never used the terms "save" or "savings." In the `30s and `40s half of America opened Christmas Club savings accounts and cashed them in by June. People hated the fact that they failed when it came to saving money, but they loved the idea of accumulating money. "Mr. Prospect, the cash value account of this policy will accumulate to $6,000 by the time little Timmy is ready for college." We never asked the prospect for his signature (too legal), rather we told him "just write your name here." If the annual premium was $1,380, we did not refer to it as one-thousand-three-hundred-and-eighty-dollars (too expensive), rather it was "thirteen-eighty." And choice, always choice: "Do you want to take your insurance physical on Tuesday or would Wednesday afternoon work better for you?"

Answering the call

Many were called but few were chosen. The turnover rate of new agents was extremely high throughout the industry. Some companies were fairly selective but several used the "mud on the wall" method. If the recruit passed the aptitude test he was given a rate book, a rabbit's foot and sent forth to get names on the dotted line. If he did not show promise within a few months, he was sent packing. The new agent had to be a self-starter. He had to develop a technique that would allow him to have some place to go and someone to see. Even in my retirement, I still have a recurring nightmare that I am behind in my sales quota and have run out of prospects.

For those who did succeed, the rewards were exceptional both financially and professionally. Essentially, the agent's compensation was based on straight commission. Most salespersons were paid only once, when the sale was made. Life insurance agents, however, received a substantial payment based on the first-year premium, usually around 50 percent to 60 percent. In addition, they also received a renewal commission each time a premium was paid in subsequent years, usually about 10 percent for the next nine years and around 2 percent beyond the 10th year for as long as they controlled the business. A smart agent could reach the point where he would live very comfortably off his first-year commissions and bank the renewals.

Another outstanding benefit for the successful agent was total independence. While there were some restrictions on loyalty to his primary company, for all practical purposes, the agent was a true entrepreneur, a sole proprietor. He was his own man. In addition the company provided excellent medical and dental benefits for him and his family, along with a generous pension program. The local agency usually offered office space, phone and secretarial services.

Another benefit for the agent was the nature of the product--it was intangible, with no inventory to worry about. There were servicing requirements such as beneficiary changes and premium adjustments, but most of these details could be handled by a good secretary, while the agent devoted his time to the primary tasks of prospecting and selling.

If there was one indispensable requirement for the agent it was a genuine, passionate belief in the primary purpose of his calling--to provide the necessary income for Molly and the babies and ensure they would be able to live the life they were accustomed to should he, God forbid, meet with an untimely demise. In the `40s and `50s it was assumed that Molly could not take care of herself. She was, after all, only a housewife and mother. And the prevailing male attitude was, "No wife of mine is going to work." The picture the agent was given of Molly--think June Cleaver--was that she was a loving, demure, stay-at-home wife and mother who would be totally helpless in the world on her own.

Many insurance home offices exploited this attitude regarding Molly's helplessness. In the event of a death benefit payment, it was to the company's advantage to keep the corpus of the policy in its coffers and pay it out in installments. Agents were trained to convince the husband to initiate a settlement option agreement, which virtually allowed him to portion out the insurance payments from beyond the grave--"After all Mr. Prospect, we can't burden Molly with large sums of money without some help and guidance." What was not anticipated, however, was inflation, which radically diminished the widow's buying power.

I recall one incident that dramatically illustrated this terrible practice. In the mid-`60s, one widow, who had suffered such a settlement, called the company's home office and begged them to increase her monthly payment so that she could support her children. She was told that nothing could be done since this was the result of a contractual agreement her husband had made when he purchased the policy. In desperation, the widow boarded a train with her three small children and set out for the home office. Upon arrival she insisted on seeing no one except the president of the company. Initially she was refused, but after hours of sitting in the lobby with her children, she was granted an audience with the president and successfully pleaded her case. I am certain there were many suffering widows who were not so aggressive and resourceful.

Staying motivated
To make certain the agent maintained a high level of belief in his product the companies and the industry provided constant motivation at many types of sales meetings. My first experience in this form of emotional fortification was a sales congress held at Moore Theatre in Seattle in the autumn of 1956. The program included four or five highly successful agents from various parts of the country. Some used humor in their comments, but the final speaker opened his remarks by telling us, in a thick southern drawl, he had no place for jokes when it came to the subject of life insurance.

"I have been blessed with the most beautiful wife in the world," he began. "God has been good to me. I have three beautiful children. God has been good to me. I work for the best insurance company in America. God has been good to me. I work in the greatest industry in the world. God has been good to me." His speech concluded with the background music of The Impossible Dream as he urged the audience "to bear with unbearable sorrow and run where the brave dare not go." When I got home I told my wife that it was futile to pray for our success. God was working full time for a life insurance agent from Biloxi, Mississippi.

The company meetings were much more formal and a lot more fun. Each year the home office staff gathered with those agents who had made their quotas, along with their wives, for a three- or four-day sales seminar at a resort. The business meetings were conducted in the mornings, and afternoons were devoted to golf or tennis for the men and shopping tours for the wives. Each evening the home office hosted a formal cocktail party and banquet. My recollection of these events is a mixture of sun, nicotine, red meat, alcohol and angst. The cocktail parties were referred to as "company money on the rocks."

The business sessions were devoted to the introduction of new plans and products and recognition for outstanding achievements. However, like all sales meetings, the emphasis was on motivation and production. You could never sell too much and each year the quotas were increased. The prevailing lament was that every time an agent made a touchdown, the home office moved the goal posts.

The motivation always came in the form of a powerful speech given by one of the company officers or a top agent, reminding us again of our sacred mission to protect Molly and the babies. One of the most memorable of these was given by an agent who, with tears in his eyes, solemnly invoked the pledge that he would gladly pierce one of his veins and sign, in his own blood, the life insurance application so that his wife and precious children would be able to live the life they were accustomed to. This was the level of passion that many agents demonstrated.

A universal characteristic of a successful life insurance agent was a well developed ego. Aside from the independence and the monetary rewards, the agent derived significant satisfaction from being applauded for his sales efforts. Agency management and home offices went to great lengths to exploit this need by providing ongoing acknowledgement through challenges and awards. Every week the local office would publish a bulletin that detailed the current sales of each producer. If sales were flagging a contest would be inaugurated offering prizes for outstanding achievement.

Every September home offices would enter into a frenzy of activity promoting a nationwide sales contest. A theme would be established, generally involving a sports event like football or baseball. The producers would be divided into teams and agencies would be pitted against each other to see who could produce the most. A sales quota was set and those who reached it were treated, along with their spouses, to a gala celebration. At every opportunity winners were awarded a prize or a plaque.

No one really dies

It is ironic that a product that promises to pay a given sum of money upon the death of an individual should be called life insurance. Whoever coined that term must have been well aware that our culture looks upon death as something that happens only to the unlucky, the old and infirm. "Science will get something worked out, a pill or a potion, that will keep it from happening to me."

The wise life insurance agent learned early on to avoid the "d" word. Death, die, dying, dead were not found in his lexicon. It was OK to pass on, pass over, pass away but never the "d" word. "Mr. Prospect there is no reason to suppose that you won't live a long and happy life. However, it is wise and prudent to hope for the best but plan for the worst. This policy will not only safeguard your family in the event, God forbid, that you should pass away, but the cash value will accumulate to $38,000 by the time you are ready to retire. I suggest that we bind your application with one month's premium or would you prefer to pay the full annual deposit?"

Picture us in the `50s--think Robert Young in Father Knows Best. There we were with our leather briefcase neatly tucked under our arm, in our gray flannel suit, pants pressed, shoes shined, a snap in our fedora, dedicated to the sacred mission of preserving the American way of life for helpless widows and orphans. We had a firm handshake, a look-'em-in-the-eye attitude, a smile on our face and a song in our heart. What auto salesman would vow to tap into his blood to sign the application? What real estate agent would, with tears in his eyes, proudly proclaim that God had led him to the greatest business in the world? We were magnificent in our passion and purpose: the few, the chosen, the elite in this country's vast army of salesmen. We were Life Insurance Agents and damn proud of it.

And we gave as much as we received. We were strong, earnest, hardworking leaders of our communities. We were scoutmasters, little league coaches and deacons of our churches. We were active members of Big Brothers, the local Rotary and Lion's club. You could look on any school board or any charity drive and there you would find a life insurance agent.

But our time, like that of the Studebaker, I Love Lucy and the fedora, finally came to an end. No, we did not abandon Molly--she abandoned us. One morning in the late 60's, whether thorough boredom, the feminist movement or economic necessity, she walked out the door and joined the American workforce. You can find her now as a president of a corporation, a lawyer, a physician, a dental technician, a massage therapist, a bartender and, yes, even an insurance agent. She may very likely earn more money than her husband, or she may be a single mother. There is simply no longer the need to protect Molly and the babies; she's at the office and Timmy and Tiffany are in daycare.

The era of the true Life Insurance Agent was brief but glorious. Once Molly left for work we were forced to turn to other markets: business insurance, health insurance. We became specialists and now call ourselves estate planners, financial planners or investment advisors. Our portfolios now contain stocks and mutual funds. Life insurance is just another arrow in our sales quiver. Hardly a week goes by that I am not offered low-cost term insurance on the Internet. The mission now is all about interest rates and corporate yield. The passion of Hartford has become the profit of Wall Street. That brief but grand epoch of Molly and the babies will never come again. All that remains now are the memories. Perhaps the time has come to take up, God forbid, the bagpipes.

John Lee, CLU, served as charter president of Alaska General Agents and Managers Association, president of the General Agents and Managers International Conference and the Seattle chapter of the American College of Chartered Life Underwriters. He is retired and lives in Bellingham, Washington, with his wife Camilla. He can be reached at 360-650-0907 or via email at jjlee64@comcast.net.

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