by: Mark D. Milbrod, CLU, CLTC-March 2019 ASG Insight


One of the biggest problems facing the life insurance agent is the ability to add value to the sale.  The worst thing we can do is to commoditize the sales we make.   What do I mean?  Let’s say we have a client that calls up and asks for $500,000 of 20 Year Term.  For a 40-year-old male in good health (assuming Preferred Non Smoker Rates), the premium would be $575 annually.  We can fill the order and simply move on.  Give him what he asked for.  But what have we done?   We just commoditized that sale.

The next year, that client is approached by some other “insurance guy,’’ and he sells him a new 20 Year Term for $550.  There is no loyalty on behalf of that client.  It was just a transaction.   In the above example, that $500,000 20 Year Term was probably purchased to protect a mortgage so the house will be paid off in the event of a premature death.

Now let’s rewind to that original request.  We didn’t just “fill the order.”  We sat with the client and asked what he needed the insurance for.  He is married and has two small children, ages 6 & 4. The wife is a stay at home mom and had no immediate plans to go back to work. As we mentioned, the $500,000 was needed to pay off that mortgage.  Now what???

I like to use a yellow pad at the point of sale.  I always ask the question, what happens after the mortgage is paid off?  Don’t you have other monthly expenses?  So, I take out the pen, start listening and wouldn’t you know it, they start telling me what other expenses they have.  Here’s a typical example, assuming a mortgage has been paid off by the initial Life Insurance proceeds…



This starts a whole new conversation and brings up an entirely different line of questioning…

  1. Do you want your spouse to be forced to go back to work?
  2. Who is going to take care of the kids?
  3. Wouldn’t it be great to have options?
  4. How long would you want to continue replacement income?

The list can go on and on.  The larger the expenses, the larger the policy size.  Besides, most people relate more to a monthly income number rather than to a very large death benefit that in most situations they feel is excessive.  The point in all of this is to take the commodity of the sale and make it more meaningful.  They are giving you the answers to the above questions and they are telling you what the monthly expenses are.  So now you can customize a plan to fit their individual needs.  In the example below, the client asked to have the $500,000 as an initial death benefit and then $4,100/month for 20 years.  Here is the result:



Had we just filled the order, the premium for the $500,000 of 20 Year Term would have been $575.  Now we are providing a total needed death benefit of $1,313,179 (which represents an initial lump sum of $500,000 and the balance paid out as a guaranteed monthly income of $4,100 for 20 years.

This amounts to a commissionable sale that is almost 2½ times the original request but of more importance, you have sold to the true needs of the client.  By doing this, you are taking on a larger advisory role and now this sale is so much more meaningful to the client and their family, it becomes virtually non-replaceable.

You can also add another layer to this sale by including an additional lump that is payable at the end of the income period.  Below is a chart illustrating the premium for various age and payout options…



I have always been a fan of consultative selling.  This approach adds significant value to the sales process.  It is huge client retention tool by making what you have put in place, virtually non-replaceable.    Clients understand that their policy is not just “paying off their mortgage.”  It means so much more.    Their families can continue to live an unimpeded lifestyle that they were accustomed to living.  It allows choices that would ordinarily be in jeopardy if not for putting together a properly designed plan.

The best part about it is that THEY are telling you what they need and that’s what makes it even more powerful.

If you would like to learn more about how we can help you take the commodity out of the sale, reach out to us today.