Better Prospecting: The Upside To Being An Expert Witness

 This article was originally published in Life Insurance Selling magazine on 4/10/2010 by KIM MAGDALEIN

Life insurance is wonderful because it is useful for so many concepts. It allows you to become an expert in small, defined niche markets.

Becoming an expert will require some imagination. For instance, I discovered years ago that in a divorce settlement, the judge will often require a certain amount of life insurance coverage on the party paying child support. I also discovered that the amount of coverage is almost always an arbitrary figure just pulled out of a hat.

Additionally, judges and lawyers don’t really know what type of coverage is suitable and for what duration. Level term may be suitable for a finite period, but over time, this coverage could be reduced.

A very serious concern to the beneficiaries would be, “Who’s it for?” Minor children get the money outright and the former spouse may or may not be the appropriate trustee. Social Security plays a role in the decision affecting the amount of coverage. Should college funding be considered as well? How about special needs children beyond majority age? Is there a danger that the payor will lapse the policy after final judgment? This could be disastrous since the payee won’t know unless he or she is notified by the insurance company. How about ownership? What about ownership of cash value at surrender?

I know it sounds a little far-fetched, but I was called as an expert witness and paid a fee for my testimony. The judges are very interested in the details and have never been exposed to them.

With this type of expertise, you could become a resource for literally hundreds of divorce attorneys for either payor or recipient. You can even be appointed as the agent of record in the case when you bring your recommendations to the hearings. It can be successfully argued that the agent should be impartial and fair to both parties and most people don’t even have an agent.

As a side benefit, if you sell annuities or have a securities license, you will be able to function as an expert on Qualified Domestic Relations Orders. A QDRO refers to the process of distribution of qualified money [401(k), 403(b), IRAs, etc.] prematurely, as in the case of a divorce. A judge can require a reassignment of ownership of an IRA when a couple splits. When you have the inside track on the divorces, then you have the first shot at this IRA money. If you are an expert on QDROs, then your testimony and value go up even more.

One last item on life insurance: High-net-worth clients may have policies to update and/or need to change beneficiaries and ownerships, which can lead to more opportunities.

You’re probably wondering how to get in with the attorneys. That’s easy. Cold-calling. That’s right. Put on your walking shoes and start walking. According to www.divorcerate.org, over 40% of all marriages end in divorce. What a market!

A hard-working, licensed insurance agent with a good idea will succeed. Don’t forget to read next month’s installment. I’ll be bringing back an old idea with great new opportunities.

Kim L. Magdalein is a producer and owner of PresentYourPractice.com. He entered the industry in 1985, and went into private practice in 2001 serving the Jacksonville, Fla., retirement community. He has personally presented hundreds of seminars and created a thriving practice. He created Present Your Practice in 2004 to serve producers with seminar productions and methods for optimizing seminar attendance with qualified prospects. He can be reached at (800)909-9894.