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Immunize your business against improper replacement

By Jim Ruta | August 18 2015 08:50AM
How do I minimize replacements of the life insurance policies I sell? It seems that even when I know the client well, business still disappears.

Replacement of existing life insurance accounts for at least one in every two policies sold according to everything I read. It has for a long time so, it’s not likely going away anytime soon.

The smart approach is to immunize your business against indiscriminate and “improper” replacement. I say “improper” because with today’s term pricing, there are clearly times when you can help consumers by rewriting their business. These sure seem like the old “re-entry term” idea to me. It can make sense sometimes when the rewrite premium saves a client thousands over the renewal.

But, you’re talking about improper replacement, where the real loser is the consumer. Re-writing the same or similar policies without good rationale or replacing old cash value policies are good examples of apparent improper replacements. Of course, each situation is different.

Here are 10 ways to immunize your clients and your business against the undue influence of advisors looking for improper replacements:

  • Engage your clients in writing. Be seen as more professional by establishing the highest relationship standards. A “Relationship Engagement Document” makes you hard to beat at the outset.
  • Sell from the heart. Show you care about them by getting them to care about what matters most to them – their spouse, children, grandchildren or business. Tying honest emotion to purchases makes policies harder to replace.
  • Do the right job for the client the first time. What’s right is right. There is no right way to do a wrong thing. When you prove that by what you do, there is less chance someone else can find a hole in your recommendation.
  • Write confirmation letters of the reasons people bought. A letter placed with the policy explaining their thinking at purchase is a great reminder if they ever want to give it up. It’s “insurance insurance”. Consider the “I am Your Policy” letter. Ask me.
  • Deliver your insurance policies promptly and properly. Reselling the need on delivery is a booster shot for their buying intention. Making delivery a special occasion makes it hard to forget.
  • Send “thank you for the business” letters after the sale. Courtesy and caring breeds loyalty.
  • Do all the “hokey stuff” for clients. Send birthday cards, holiday cards, policy anniversary cards, wedding anniversary cards and kids’ birthday cards. Offer birthday breakfasts or lunches. Clients struggle to replace advisors they like.
  • Survey your clients for satisfaction. Loyalty and persistency increases with feedback.
  • Provide a “replacement prevention kit”. Tell new clients what another agent has to do to properly replace the policy. Give them the proper replacement documentation too.
  • Do annual reviews, annually. It’s hard to believe your current agent isn’t acting in your best interests when you see her every year. Start by sending “The 60 Second Annual Review” letter.

Immunize your clientele by preventing the “disease” from starting in the first place. Take control of your business with these ten tactics

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Do motivational talks help advisors be more effective and productive? I hear that all motivation must be self-motivation. What’s right?

It’s hard to believe that a “motivational talk” is bad for you but, I’ve heard that too. That doesn’t stop me from doing them, but it does stop some people from coming to them. It’s as if you are weaker if you need them or even weakened, by them.

It’s too bad. Disparaging motivation is like disparaging eating – once you have a good meal, you should be good to go from then on. You should feed yourself internally once you’ve got a full stomach? I don’t think so.

Everyone benefits from external motivation. Motivation is energy, just like food or gas in the tank. It doesn’t matter how powerful your “engine”, you need fuel every day if you want to be your best. The more energy you have at your disposal, the further you can go with the power you have. The most highly paid professionals get it. Top business leaders get it. Sports are a great example in point.

You’ll hear that multi-millionaire hockey or basketball players should be able to keep themselves “up” all the time and play their best without a coach motivating them. Some think their coaches shouldn’t have to do anything – just put the players out there on the field of play and let them at it. They should be “professional” enough and motivated enough to do their best all the time. They sure are paid well enough. Right?

Wrong.

Motivation ebbs and flows. Sometimes you have it, sometimes you don’t. Losing drains a lot more from you than winning replaces too. So, motivational “talks” whether from a coach, manager or even the audience can give you just the energy you need at just the right time. Everyone needs that extra push sometimes and motivational talks, in all their forms, help us all.

The Pan American Games have just finished in Toronto. How many times did I hear how much the hometown crowd helped Canadian athletes do better than their previous best? All the time. Canada broke a record for medals at these games. Canadian athletes broke Pan Am Games records at these games. I say it’s in part because of the “motivational talks” they got from the cheering of the Canadian audiences.

Motivational talks are not bad for you. They do not mean you are weak or undisciplined. No, they don’t replace internal motivation because that’s the reason you are in the game to start with. But, they are important.

Motivation is part of what it takes to be your best. That’s why professional athletes in every discipline, great business leaders in all fields and yes, even leading insurance advisors count on a “coach” to help motivate them to be their best. It’s why attending motivational congresses helps refill your tank with motivation energy so you can keep getting up when you get knocked down. (You’re never beat if you keep getting up.)

Motivation is not everything but it is something. It doesn’t replace technical skill in sports or business but it definitely helps you steer that to your highest level of achievement. Take advantage of it.

Pan Am Games home town advantage.

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