How To Sell Life Insurance From Home During the Covid-19 Pandemic

Most people involved in the insurance and financial advisory business are working from home as directed by the White House. Social distancing has become very real as evidenced by almost no traffic on the streets of small and large cities. The traditional way of doing business by scheduling face to face meetings has become difficult and most would call those attempts irresponsible. So, how do we continue to do business in this new world?

First of all, according to a recent Life Insurance Management Research Association(LIMRA) study, the sales potential of the underinsured market in the US is $12 trillion. Yes, that is with a “T”. According to the same study, the underinsured market is expected to grow by $300 billion per year based on the current rates of population growth and inflation. There is obviously a real opportunity to sell life insurance.

And what better time to do so than now because:

  • The market ins underinsured, and most people know they are
  • Because of the pandemic, death and sickness are obviously on all Americans minds, and
  • It has never been easier to write life insurance remotely.

The trend with life insurance carriers has been and will continue to be making the purchasing process simpler, less intrusive and less expensive. Their studies have shown that at certain face amount limitations, it is far more simple and cost effective to use data and electronic tools to underwrite policies rather than following the traditional path of paper applications, ordering medical records and exams, requiring wet signatures and hard copy policy deliveries. These efficiencies make the purchasing process simpler for the client while removing many of the obstacles of buying life insurance the “old way”.

So, while at home with the threat of Covid-19 on everyone’s mind, why not check in with your clients and help them narrow or eliminate the coverage gap they have and better protect their families.

You can:

  • Run proposals online. Studies show that Americans overestimate the cost of buying life insurance by alarming amounts.
  • Apply online. Drop tickets and simplified applications are normal for most carriers today. Drop tickets don’t require you to ask intrusive medical or financial questions. Those questions are asked by trained personnel at the carrier level.
  • Obtain e-signatures. Several carriers now allow for e-signatures.
  • Client avoids the insurance physical. Once again, at differing face amount levels, clients can avoid having to meet with an examiner to answer medical questions and provide blood and urine samples.
  • Electronic policy delivery. Most all carriers have an electronic process in place to allow the client to retain their policy and finalize delivery requirements. These processes are simple and easy for the client to understand and complete.

Following are examples of 2 carriers that have streamlined their process to make selling and buying life insurance much easier:

  • Lincoln Financial-Their TermAccel program allows applications age 30-60 to purchase $250,000 to $1,000,000 of term life insurance at standard non-tobacco, standard tobacco and better rates with no exam following a turn-key electronic process. And, they offer better rates for those that follow their TermAccel process than others that choose to use the older, more paper-intensive, wet signature process.
  • Protective-their Velocity program offers applicants ages 18-45 the ability to purchase up to $1,000,000 of term life without providing fluids or ordering medical records. The face amount is limited to $500,000 for applicants ages 46-60. The entire application process is electronic including policy delivery.

Other carriers have streamlined their processes as well, so check with your Brokerage General Agency for more information on how to make your life easier and more profitable by selling life insurance in the new electronic way.

Now is a great time to be talking about life insurance and you will likely find people at home while receptive to this conversation.

In down economic times such as these today, finding alternative sources of income to make up for the lost revenue makes sense and will be much easier given the more efficient processes carriers have created.

The author, Michael R. Smith is the author of Tread Lightly, A Guide To Life Insurance For The Affluent Client, and a Principal with TFP Brokerage, an Atlanta based life insurance Brokerage General Agency and Life Settlement Broker. He can be reached at mike@tfpbrokerage.com or by phone at 678.338.4384.

Why Property and Casualty Agents Should Consider Life Settlements

     Life Settlements involve life insurance policyowners selling their policies to secondary buyers.  Settlement purchasers are largely financial institutions and hedge funds, but additional buyers have emerged in this industry.

     The Life Settlement market has continued to grow in 2019 and all indications are that this trend will continue.  Not only are blocks of Life Settlement polices attractive to institutional buyers, they have also become popular as an Alternative Investment so there is flurry of capital available to purchase eligible policies.  Buyers are purchasing policies today at lower anticipated ROI’s than ever before. According to the Life Insurance Settlement Association, more than 250,000 policies with a combined face amount of over $57 billion is lapsed annually by US seniors over age 65, and these are just the permanent plans.  If term life is added, the total exceeds $112 billion. This is a very timely topic and one that others will be having with your clients if you don’t address this with them.

     So, why is this important to P&C Agents? 

For several reasons:

  • P&C Clients may be lapsing policies that they could have sold and turned a policy into additional assets for their clients.
  • P&C agency’s may have clients that reach out to competitors for advice on their life insurance. 
  • Most P&C agencies have life licenses so getting a settlement license is relatively easy.
  • The policy review process will help the P&C agent learn more about their client’s insurance policies and identify further opportunities to either replace policies that are not financially structured properly or open opportunities to further discuss the client’s needs.
  • The P&C agency could materially help their clients while participating in a new form of compensation with little change in the P&C agent’s behavior.

    How does the settlement process work for a P&C agent? 

First and foremost, the P&C agent needs to identify a senior policyowner of a life insurance policy, whether term or permanent.  This can be done by simply asking clients whether they own life insurance. If the answer is yes, then further asking if the policy has been reviewed lately is a natural follow up question.  If that answer is no, then inquiring as to if they would like to have their policy reviewed by a professional would be the logical next step.

     At this point, it is critical for the P&C agent to have established a relationship with a Brokerage General Agent(BGA) or advisor that they:

  1. Trust, and
  2. Is well versed and established conducting life insurance reviews.

     The P&C agent should then obtain a copy of an annual statement on the policy in question and supply this policy information to the BGA or advisor referenced above.  The appropriate BGA or advisor partner will then collect all information necessary to review the policy and provide insight as to how that policy is performing and generally whether the policy is a settlement possibility.

     If the policy appears to be a settlement prospect, the P&C agent should locate a settlement broker that conducts the following process:

  • Has proprietary HIPAA form signed
  • Collects all medical records on the insured
  • Obtains at least one life expectancy report on the insured
  • Packages the entire file and sends out to the Provider market in an auction capacity
  • Remains transparent throughout the entire process to keep the advisor and client informed.

     When a Life Settlement is appropriate, it can have a dramatic effect on the policyowners life.  Obtaining a meaningful settlement on an asset considered to be a cash flow liability is a unique service that will create loyalty amongst all involved.  The P&C agent will once again be considered a valuable asset and respected advisor to that client and their family. And, the settlement transaction can be financially rewarding for the P&C agency.

 

The author, Michael R. Smith is the author of Tread Lightly, A Guide To Life Insurance To The Affluent Client, and a Principal with TFP Brokerage, an Atlanta based life insurance  Brokerage General Agency. He can be reached at mike@tfpbrokerage.com or by phone at 678.338.4384. 

 

     

 

  1. Lapsed Life Insurance Policies: An Astounding Number 

By Darwin Bayston, CFA, President and CEO, LISA/February 24, 2015

 

Why Property and Casualty Agents Should Review Their Term Life Books of Business for Life Settlements

  Life Settlements involve life insurance policy owners selling their policies to secondary buyers.  Settlement purchasers are largely financial institutions and hedge funds, but additional buyers have emerged in this industry.

     The Life Settlement market grew significantly in 2019 and all indications are that this trend will continue in 2020.  Not only are blocks of Life Settlement policies attractive to institutional buyers, they have also become popular as an Alternative Investment so there is flurry of capital available to purchase eligible policies.  Buyers are purchasing policies today at lower anticipated ROI’s than ever before. According to the Life Insurance Settlement Association, more than 250,000 policies with a combined face amount of over $57 billion is lapsed annually by US seniors over age 65, and these are just the permanent plans.  If term life is added, the total exceeds $112 billion. This is a very timely topic and one that others will be having with your clients if you don’t address this with them.

Why term life insurance policies? 

Well, we all know that when a term policy level premium ends, the premiums skyrocket and very few policy owners keep that policy.  So, the policy almost always lapses for no value.  

The ideal term policy needs to be convertible on an insured over age 65 or the insured must be very sick.  If the policy is still convertible to permanent insurance, then Secondary Market buyers might be interested which could convert a premium obligation for the client into cash.  In addition to whatever revenue is directed to the P&C Agent for the Life Settlement, the policy conversion will generate revenue to the P&C Agents firm.    

     So, why is this important to P&C Agents? 

For several reasons:

  • P&C Clients may be lapsing policies that they could have sold and turned a policy into additional assets for their clients.
  • P&C agency’s may have clients that reach out to competitors for advice on their life insurance. 
  • Most P&C agencies have life licenses so getting a settlement license is relatively easy.
  • The policy review process will help the P&C agent learn more about their client’s insurance policies and identify further opportunities to either replace policies that are not financially structured properly or open opportunities to further discuss the client’s needs.
  • The P&C agency could materially help their clients while participating in a new form of compensation with little change in the P&C agent’s behavior.

    How does the term life settlement process work for a P&C agent? 

First and foremost, the agent needs to identify a senior policyowner of a term life insurance policy.  This can be done by simply asking clients whether they own life insurance. If the answer is yes, then further asking if the policy has been reviewed lately is a natural follow up question.  If that answer is no, then inquiring as to if they would like to have their policy reviewed by a professional would be the logical next step.

     At this point, it is critical for the P&C agent to have established a relationship with a Brokerage General Agent(BGA) or advisor that they:

  1. Trust, and
  2. Is well versed and established conducting life insurance reviews.

     The P&C agent should then obtain a copy of an annual statement on the policy in question and supply this policy information to the BGA or advisor referenced above.  The appropriate BGA or advisor partner will then collect all information necessary to determine if the policy is convertible and obtain a conversion illustration. They can advise you if a Settlement is worth pursuing.  Please contact Mike Smith at below coordinates for our Life Settlement Qualifying Worksheet to help you determine if you have a prospect.  

     If the policy appears to be a settlement prospect, the P&C agent should locate a settlement broker that facilitates the following process:

  • Has proprietary HIPAA form signed
  • Collects all medical records on the insured
  • Obtains at least one life expectancy report on the insured
  • Packages the entire file and sends out to the Provider market in an auction capacity
  • Remains transparent throughout the entire process to keep the advisor and client informed.

     When a Life Settlement is appropriate, it can have a dramatic effect on the policy owners life.  Obtaining a meaningful settlement on an asset considered to be a cash flow liability is a unique service that will create loyalty amongst all involved.  The P&C agent will once again be considered a valuable asset and respected advisor to that client and their family. And, the settlement transaction can be financially rewarding for the P&C agency.

 

The author, Michael R. Smith is the author of Tread Lightly, A Guide To Life Insurance For The Affluent Client.  He is a Principal with TFP Brokerage, an Atlanta based life insurance Brokerage General Agency that is also a Life Settlement Broker.  He can be reached at mike@tfpbrokerage.com or by phone at 678.338.4384. 

 

     

 

  1. Lapsed Life Insurance Policies: An Astounding Number 

By Darwin Bayston, CFA, President and CEO, LISA/February 24, 2015