Question: I’m often “ghosted” after I send out insurance illustrations to prospects. After all that work, nothing happens. How can I get a better return and make more sales?
It surprises me how often I hear this question because I would have thought by now that the industry would have learned that illustrations don’t sell anything. Never have. Never will.
The problem is that rarely someone does buy what you illustrated and sent and then you think it works. But it didn’t. You sold the case despite sending out the illustration.
This problem has only worsened since the pandemic. Many advisors who learned they could sell insurance from their basement in their shorts don’t want to get back on the road to make a personal difference. For them, sending illustrations to prospects is a natural part of their post pandemic selling process.
Here are just a few of the reasons it’s wrong to send illustrations:
1. The one thing you know about an illustration is that the policy will never be like that. Cancel early. A slight dividend change. A policy loan. A conversion or a policy adjustment… and it’s a whole new picture. Illustrations are only “estimates” of what can happen. They are not predictions – as you will read in the fine print. So, how helpful is that?
2. Actuaries and marketing can make illustrations do anything and they have over the years. Premium offset or “level premium for life” Universal Life anyone? It’s not fair to clients to have them count on these estimates. So, as my friend David Hull says, never get involved in an “illustration war”.
3. Who can understand them? In fact, who would even read it? Even agents? I suppose when they were a page or two long as they were one time, you might expect a prospect to at least scan it. But today? 20, 30, 40 or more pages? Forget it. And even if it were read, who would UNDERSTAND it? Of course this supposes that anyone would even try.
4. Policy deposit and value summaries read more like materials lists for that new house you want to build than they are drawings of it. They may make sense to the person building it but it will go over the heads of most regular people and they still won’t “see” what they have.
[All of this is notwithstanding the compliance requirement to provide and review illustrations to help ensure understanding and acceptance of the policy. Follow the rules. Use disclaimers.]
Would you like to make policy illustrations work better for you and your prospects?
Do you want them to help prospects buy what they want rather than wait and wonder?
Prospects buy for their own few reasons and unless you can use an illustration to illuminate those reasons, an illustration package will be a hindrance to a sale and not helpful to it. To illuminate a sale effectively, we must “interpret” illustration values to meet the prospect’s needs and not the actuary’s. This takes serious product knowledge.
This is especially important when you are dealing with cash value life insurance (not permanent or whole life… no one likes these ominous sounding words). But before I get to an effective interpretation strategy, there is this.
NEVER send illustrations to prospects and expect them to buy based on them. You will only give them homework they don’t want and confuse them, so they don’t buy. Likely this is not the reason you are doing it.
You are always more effective reading and explaining the illustration with the client in their presence. In person is best but even virtually, share your screen and explain it page by page. Help them understand the values. Don’t force them to guess.
When you are together, you can see and hear their reactions and then clarify their concerns in the moment. That reduces objections later. This requires you to know and understand the illustration nearly as well as an actuary. When you are a life specialist you make a positive difference.
As for interpreting the cash value life insurance illustration and illuminating the highlights use the Contract Milestones Strategy – again with the appropriate disclaimer reference to the illustration and its inherent limits:
There are 3 notable product values in the contract milestones summary:
The year in which the increase in contract total cash value at the current dividend scale equals the annual contract deposit (cash premium) paid. This is the year clients stop “spending money” and are just rearranging assets for the benefit.
The year in which the total cash value equals the total deposits made at the current dividend scale. This is the year the policy cost is only the lost opportunity on the deposit.
The year in which the total face value of the contract exceeds the total of premiums paid. This is the year when you get all your premiums back and the full value of the policy.
So, stop with the traditional values at 5, 10, 15, 20, 25, 30, 40, and 50 years stuff. That is mostly noise. Illuminate what matters most to your prospects in person before showing the illustration and ghosting will disappear.
You will also be a sales professional and paid like it too.
This column by renowned advisor coach Jim Ruta was first published in the April 2024 edition of Insurance Journal magazine.
For more information on the tools to use to build your brand, check out www.advisorcraft.com/solis
Jim Ruta’s mission is simple – to preserve, promote and propel the financial advisor business. A former insurance advisor and executive manager of a 250-advisor agency, Jim is a highly regarded coach, author, podcaster and keynote speaker. He has spoken 4 times at the MDRT Annual Meeting including the Main Platform. Jim Ruta is an Executive Coach and Keynote speaker specializing in life insurance advisors and leaders. He works with top advisors around the world and re-energizes audiences with his deep insight and passion.
If you have a question for Jim, you may send an email to [email protected]
