It’s ok to offer Life insurance!
Ask yourself why national P&C carriers like Liberty Mutual and Nationwide, require their producers to write life insurance too? The answer is retention. As you know the more lines of business you have with a client, the more likely they are to stay with your agency. Life Insurance is a long-term product, one that you do not have to review/replace every year. Since these clients are more likely to stay with you long term, it increases the amount of renewal commissions you can make on their other product lines as well. On the opposite side of the coin, think about the clients that go looking for life insurance and find another P&C agency down the street that can help them. Once that agency helps with the life insurance, they will most certainly quote the P&C business as well, wouldn’t you?
An opportunity with Life Insurance
While our agent may be correct that “clients no longer ask about life insurance,” the opportunity to help your clients with their life insurance is higher than ever. When asked 60% of Americans state that they have life insurance, however more than half of those people admit that they only have a group policy through work, which on avg. is 1-2x their salary and
not transferable. Also 50% of those polled with life insurance think that they do not have enough. Another reason for you to bring up this valuable protection. You and your staff are talking to your clients everyday about Homeowners, and auto insurance, but are you asking about Family protection or business protection insurance, aka Life Insurance?
Challenges with Life Insurance
I understand that Life Insurance is more difficult to qualify for than traditional P&C products. Medical underwriting is very different from the requirement needed on a homeowners or
auto policy. Many agencies believe that the risk of losing a client is not worth asking about life insurance. I am not going to sugarcoat it; you will experience declines and challenging conversations with clients when you write life insurance. But if you have prepared them up front for what to expect, fully explaining the application and underwriting process, and work with them to provide the most accurate information to the carrier, then you have done your job. Being upfront and honest with your client regarding the chance of a decline is the best practice and builds trust. While you will do your best to get them the policy they want, any offer from the company is based on their health.
When I finished with my call, I was slightly disappointed with this agent’s point of view, but I was also excited for the opportunity and challenges ahead. Life insurance is a valuable product that many clients need, and few will ask for on their own. Technology has made it easier than ever to provide this valuable protection to your clients. The cost has decreased and is therefore more affordable than ever. If you have made it your
position that you do not want to offer Life Insurance, then I wish you the best, honestly. Just make sure to remove the liability from your business, by taking down life insurance from your website, and marketing pieces. For those of you that wish to continue offering life insurance, contact your BGA to learn
all they can do to help you with your life insurance efforts!