Last month, I had lunch with a friend who is a successful financial planner. We both started in the business as full-time agents for a life insurance company when sales techniques were quite different than they are now. For example, we were taught the importance of motivating prospects to help them make a buying decision.
We talked about the many changes in the business. He told me that over 80 percent of his income is now generated by nonlife insurance sales and that he no longer finds it necessary to use “corny” motivational stories. I commented that perhaps the reduction in life sales and the absence of motivation go hand in hand.
In my opinion, we have thrown out the baby with the bath water.
Allow me to share some stories that helped sell life insurance
yesterday, are doing it today and will continue to be effective
We would be well advised to learn how to motivate clients to purchase the life insurance they need.
The three riders
Dave Downey, who has qualified for the Top of the Table for 28 consecutive years, relates this story, first told to him by the legendary Frank Nathan:
“I was delivering a large life insurance policy. In addition to the new policy, there was a large potential future need. In view of this, I asked for, and received, an offer from the insurance company for twice the original amount. While the client recognized that he might need this coverage in the future, he thought he could wait to buy it. I then told him the following parable:
“There is a legend of three riders crossing the desert at night. Out of the darkness came a voice commanding them to dismount and fill their pockets with pebbles. After they had obeyed and remounted the voice declared, ‘Tomorrow at sun-up you will be both glad and sad.’ When dawn came, they reached into their pockets and discovered not pebbles but diamonds. Then they were both glad and sad—glad they had taken as much as they had and sad they had not taken more. And so it is with life insurance.
“I added nothing, and without hesitation the client said, ‘Let’s do the whole thing.’”
Wishing we were down there
The late Woody Woodson, who authored the “Back Page” for decades, tells this story:
“I was attempting to make the largest sale of my career to a prospect who owned a successful company. In spite of my best efforts to convince him otherwise, he was not sure he needed the additional life insurance. I then related the following anecdote:
“The plane was sitting on the tarmac while I repeatedly looked at my watch. Finally the pilot came on the intercom and said: ‘We’re sorry for the delay. We know it’s more difficult to sit on a plane waiting for takeoff than to sit on a plane that’s aloft and on its way. We must wait here until the Houston weather stabilizes so we can go ahead with confidence that we can land. We learned a long time ago that it’s better to be down here wishing we were up there than to be up there wishing we were down here.
“It’s a lot like life insurance. Because it’s better to have it when you don’t need it than to need it and not have it. The client laughed and said, ‘You know what? You’re right,’ and I made the largest sale of my life.”
Jack Steger, a superstar in the business, was attempting to make a large life insurance sale to fund a buy/sell agreement. Things were going along well until the accountant suggested that life insurance wasn’t necessary because the company could buy out the heirs of a deceased stockholder over a period of years.
Jack had a powerful “one-pager” to overcome this objection. It showed two balance sheets. The first had the company’s existing balance sheet. The second had the same sheet after the company assumed the liability of paying off a deceased’s interest—a new liability that might equal 50 percent of the company’s net worth and could be incurred at the worst possible time, immediately after the death of a key person and owner. Jack then asked, “If you were the surviving owner, wouldn’t you rather have a balance sheet that didn’t have this obligation?” The sale was consummated.
Like my luncheon companion, many planners are receiving an ever-increasing portion of their income from nonlife insurance sales. This trend is a disservice to consumers, and we would be well advised to learn how to motivate people to purchase the life insurance they need.
Thomas John Wolff, CLU, ChFC, served as 1979-1980 president of NALU (NAIFA). A member of MDRT since 1958, he is a recipient of the John Newton Russell Award. He is a member of Hartford AIFA (Conn.). His address is P.O. Box H, Vernon CT 06066.