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Ideas From the Top

NAIFA’s leaders share some time-tested ideas that have helped their businesses thrive.

By Lisa Singh

Mention an overlooked product.
If you count doctors among your clients, John A. Davidson, LUTCF, FSS, NAIFA president and owner of Davidson Insurance & Financial Services Inc. in Thousand Oaks, Calif., has this advice: It’s all well and good to talk with doctors about life insurance, buy/sell agreements, deferred compensation and health insurance, but don’t make the common mistake of failing to mention a business overhead expense (BOE) policy. Anyone who owns a business has financial obligations tied to running that business. And if, for example, a doctor becomes disabled, what happens to the three-year leasing contract he signed for the office space? Enter the BOE policy, which usually kicks in after 30 days, with benefits lasting up to two years.
Davidson typically sells the policy along with a personal disability income (DI) policy. He also tacks on a life insurance sale—either term or whole life—because if the prospect were to die, someone still has to fulfill that leasing contract. “It’s an easy sale,” he says. He brings up BOE by asking, “What will happen to your business if something happens to you, and you’re not here to produce the income? You still have ongoing expenses. This is a way to shift the responsibility away from yourself and your partner to the insurance company on a tax-deductible basis.”

Don’t forget LTCI.
One more thing about those doctors (or any other working professional you’ve sold a DI insurance policy to), says Davidson: As the policyholder creeps into his late 50s and early 60s, chances are his DI policy will reduce in benefits or disappear altogether by the time he’s 65 or 70. Enter a long-term care indemnity or cash-benefit product. It’s a natural transition for a client in this age bracket, says Davidson. He poses this question to prospects: “What are you going to do about protecting your income when your disability product is no longer in force?” He adds, “Let’s secure your long-term care cash benefit program today.”
In many cases, the premium for LTCI is less expensive than the DI contract the client currently has. He also reminds the client that the premiums for LTCI have a tax-favorable treatment, the benefits are tax-free, and the client has the peace of mind of knowing that in the event the product has to be used, he won’t deplete his retirement savings. “I sold 22 policies in 10 days with that sale [technique],” says Davidson.

Selling fixed annuities—the low-stress way.
Looking for a low-stress way to sell fixed annuities? Russ Smith, CLU, ChFC, CFP, CSA, offers this approach: Send a completed annuity application to clients who have a good chunk of money sitting in the bank, either in a CD or a money market account. Fill in everything on the application except the signature and dollar amount. Include a product brochure (for full disclosure), as well as a cover letter, which may say something like this: “I know you have money sitting in the bank that’s not working as hard as possible for you. Enclosed is an application to allow you to get a tax-deferred return on your money. I would like you to consider a tax-deferred annuity for the following reasons.” (Include four points: a higher rate of return; tax-deferral—it allows you to control the taxes, rather than being controlled by them; 100 percent principal guarantee; and probate avoidance.) The letter continues, “I’ve made it very simple for you. I’ve completed the whole application, except for the amount and your signature. So, all you need to do is fill in the amount that you’d like to put away on a tax-deferred basis, sign the application and mail it back to me with a check using the envelope provided—I’ll do the rest.” The first time Smith sent out 25 letters using this technique, he got back one response—a check for $100,000.




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