I’m hearing more these days about agents encountering reluctance among prospects to meet and clients to move forward with planning and purchasing life insurance. Whether in the middle market or high-net-worth advanced market, prospects and clients have enough concern about what’s happening out there to cause them to hold off for now. Of course, anticipated changes in income and estate tax laws only contribute to that uncertainty and hesitation.
I won’t even pretend to have a broad-form solution to what could be an emerging problem. But if an agent in either market who’s experiencing that kind of reluctance asks me what they should do about it, I’d have a few questions for them designed to be sure they’re not contributing to the problem in the first place. Though not a golfer, I guess you might say I’d be checking to see if they were at least teeing the ball up correctly.
To be clear, I have no suggested questions for the agent who’s dealing with an individual who looks at them point blank and asks, “What part of ‘No’ don’t you understand?” My questions assume that the agent is meeting with prospects or clients who are at least willing to talk. Also, my questions are designed and posed so that the agent has to respond responsively and not default to, for example, “Well, in this client situation…”
Since I’m not actually there to ask these questions, perhaps you can ask a trusted colleague (who doesn’t report to you) to do so.
Questions for Agent
In either market, I’d start by asking the agent for an overview of their approach. Not just what they say, but what they ask and how they ask it. It doesn’t take long to tell if the agent is using a genuinely consultative, personalized approach or, basically, a well-honed talk track that the agent would deliver to whomever they’re sitting across from. The consultative approach endeavors to meet the client where the agent finds them. The other is determined to get the client to see their issues in the agent’s terms. The consultative approach is presented in a foundation building, “Let’s talk, I’m listening” tone. The other isn’t. The consultative approach will elicit buying signals that the other won’t, especially when the individual is, at least initially, likely sitting there with their arms mentally folded across their chest.
In the advanced market, listen for the same things I just noted and then some. Assume that the client is a business owner who’ll have to deal with a valuable, illiquid asset and then maybe a wealthy investor who’s not facing a liquidity problem but is still looking to grow and preserve their wealth. This gives the agent the chance to explain how they approach different individuals who have different needs or uses for life insurance. Here again, I’m listening for a consultative, foundation-building, “let’s talk” approach. For what it’s worth, the sooner the agent brings up estate taxes, the faster the client will know that the agent isn’t a foundation builder.
I’ve offered tips on many of these topics in such articles as “A Life Insurance Agent’s To-Do List for 2025.”
Networking with Centers of Influence
Staying with the advanced market, I’d ask the agent for an overview of how they’d structure an initial networking meeting with a center-of-influence-type advisor, such as an estate-planning attorney. Once again, it’s about both what the agent says and what they ask. The more high-profile and highly regarded the advisor, the more they’re besieged by agents for referrals. So, I’d listen to how the agent builds the case for when and why the advisor should take a chance and call them in. My experience as one of those advisors, now retired, is that most agents do far more talking than asking, and even when they do ask, they don’t ask the right things. As a result, they simply don’t leave the advisor with the impression that “This is an agent who knows how to work with an advisor.” “How Life Insurance Professionals Can Screen Estate Planners for Better Networking” offers some tips in that regard.
Product Selection and Design
The next topic would be product, meaning how the agent determines the type of product suitable for the client, how it should be designed, etc. Again, quite basically, I listen for whether the agent has a process for this or eschews such a process to inexorably build the case for selling their favorite product no matter who they’re sitting across from. You’d be surprised how quickly that distinction is apparent. I’ve always encountered agents who won’t sell a flexible premium product or, if they do, won’t sell it at less than a guaranteed premium. These days, I would consider that reluctance a major impediment to appealing to the hesitant, cautious consumer who wants to get started on a life insurance program without taking on a fixed commitment.
In the advanced market setting, I’d also ask the agent how they work with the advisors on the selection and design of the often tax-sensitive approach to funding the premiums, what technical resources they bring to the table and how they select and design products to work well in the preferred structure. Most agents can only take this part of the conversation so far, which for that high-profile, tax-savvy advisor may not be far enough. Trust me, the incisiveness of the agent’s questions to that advisor will have a significant bearing on whether the advisor thinks of that agent when trying to figure out what to do with clients’ troubled life insurance arrangements now on their desk.
Policy Reviews as a Marketing Tool
Many agents use policy reviews to market to individual policyholders, trustees and advisors. ?And why not? After all, not only is the review a valuable service for the policy’s stakeholders, but it can also pave the way for the agent to do a policy replacement or maybe a life settlement, which is often the real reason why they market the reviews in the first place. Anyway, it seems axiomatic to me that some of the same conditions that would cause a downturn in the life insurance business could cause an upturn in the need for policy reviews.
While not so much in the middle market, in the advanced market, reviews are becoming a crowded space, meaning there’s a lot of quality competition for that business. If an agent were to tell me that they’re using reviews in their marketing and, in the event liquidity and other traditional sales become more challenging, would step up those efforts, I’d have some questions, especially about marketing those reviews in the fiduciary space. For example, “Okay, let’s assume that, like most of your competitors, you already know how to make the economic or fiduciary case for a review. But what about your review process, resources and deliverables say to the policyholder that they should engage you versus a competitor?” And, “Knowing that a fiduciary could be held as accountable for the choice of reviewer as they could be for not having the review done in the first place, what assures the fiduciary of your professionalism and objectivity?” Last, “Problems initially attributed to policy performance may just as likely be due to problems with the tax-sensitive premium funding arrangement. Does your review encompass the economic and tax aspects of that packaging?” I expect to hear a response of “Of course it does.” All it takes is a few more questions to show that’s not the case. I offered some tips on these points in “A Trustee Refreshes Its Process for ILIT Reviews.”
Marketing Through Investment Advisors
I suspect that agents who aren’t already doing this will consider offering to “partner” with investment advisors as a way to get referred leads. For the many reasons I’ve expressed in one article after another, I see this as a steep climb for most agents that will only get steeper, especially as any downturn in the life insurance business would likely tell investment advisors that now wouldn’t be a particularly good time to add life insurance to their repertoires. So, I’d recommend that agents ensure they’re getting the aforementioned client-facing basics right before putting their time and money into a venture that could prove quixotic.
#Overcoming #Client #Reluctance #Uncertain #Times