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.

Better Prospecting: The Foolproof Script For Selling Return-Of-Premium Term Insurance

 This article was originally published in Life Insurance Selling magazine on 5/3/2010 by KIM MAGDALEIN
 
Would you consider talking to me about free life insurance? Or, would you trade a cup of coffee to educate your kids, pay off all your debts, and pay your bills for five years? Or, if I could show you how to have a happy wife for the price of a cup of coffee, would you be interested in finding out how?
I know what you’re thinking: “You’ve got to be kidding.” Actually, no, I’m not. If you don’t meet five people a day, you’re not interested in being successful in this business.

As I’ve mentioned before, I love term insurance. It allows applicants to purchase the amount of insurance they need rather than what they can afford. Young people especially need inexpensive coverage. It is very easy to sell.

Have you joined the “app-a-day” club? Let’s say you write just one policy per day at only $80 per month premium coverage. That’s $960 of annual premiums per day. There are 255 selling days in 2010, not including holidays. If you take out 20 days for vacation, that leaves 235 selling days. 235 x $960 = $225,600. With a standard street contract at just 90%, that’s $203,040 of yearly income. After 10 years, you’ll have 2,350 clients, assuming nobody dies. With conversion privileges and annuities, plus new opportunities with the same clients, well, you get the picture!

Here is a simple presentation that takes 20 minutes. It will close almost every time. The setup: A young couple in their late 20s or early 30s. Both are employed, they own a home, and have two scrappy little kids. Your presentation is on return-of-premium term insurance.

Develop a single sheet with a list of all possible expenditures that they could have each month. Leave the amounts blank. Just list the categories, like mortgage, electricity, cable, phone, food, etc. You will have more than 30 categories. Ask them to tell you what they are spending each month for each one. Fill in the blanks. Fill in the total. Let’s say it’s $5,000 per month.

You then ask this question exactly in these words: “Mr. Smith, how long do you want your wife to wait before she must find another husband to pay the bills and be the father to your children?”

Do not look at her. She will be staring a hole in the side of his head waiting for an answer. He will say “Forever.” You then help him off the hook and settle on five years.

Then ask them how much their debt totals, including the outstanding mortgage. With that done, next ask them how much they think it will cost per year to send their kids to college. Multiply by four and write that down. Annualize the monthly amount, multiply times five for five years, and add the three together.

You now have a thumbnail of their insurance needs. Let’s say that the total is $750,000. You have now laid out, very clearly, what their need is. I have rarely found a wife who didn’t want life insurance on her husband. It’s almost always the husband who resists. Men usually think logically, and you have just shown him the problem in writing. Let’s say the premium for him is $75 per month on a R.O.P. term policy for 30 years. You now multiply 75 x 360 which totals $27,000.

You then say: “Mr. Smith, if you die, your wife will be able to pay the bills, educate the kids, and pay off all your debts. If you don’t die, you will have spent $27,000. Do you think it’s fair that the insurance company keeps your money?” He will say “No.” Then you say, “We don’t either. If you don’t die in 30 years, the insurance company will write you a check for $27,000. Do you think that’s fair?” He will say “Yes!”

He will be happy! She will be happy! Write him up!
Do this every day for a year, giving you $203,000 in income. Go out for dinner and celebrate your new career. By the way, if you need the worksheet, let me know.

More prospecting columns by Kim Magdalein.

Kim L. Magdalein is a producer and owner of www.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.

Welcome!

This blog is under construction.
Please check back for updates within the next month.