Monthly Archives: October 2012

Why Parents Need Life Insurance

Parents Need Life InsuranceFor many people the day they become a parent is one the happiest days in their life. The day you were handed that innocent newborn baby, your life changed instantly. You are no longer just responsible for yourself, you now have a child you depends on you for at least the next 18 years of their lives.

Although you are well aware that you are now responsible for this baby as they grow into an adult, many parents don’t think to protect them from life’s sudden curve balls.

According to MetLife’s 10th Annual Employee Benefits Trends Study, a wedding, not a birth, is most likely to lead consumers to take out new life insurance policies.

Some of the possible reasons more parents don’t take out life insurance when they welcome a new baby in the world include the cost, the logistical hassle of needing a brief health screening, and the fact that they need to consider and plan for their own death.

Due to the rising cost of raising a child, it is advised that you take out life insurance for life’s “what if” moments. Between clothes, food, necessities and college tuition, the cost of raising a child quickly adds up, especially if you have multiple children in your household. In fact, the Agriculture Department recently raised its estimate to $234,900 per child before age 18.

The MetLife survey also found:

  • Just 2 in 5 working parents “feel very confident” that they’re making the right financial choices for their family.
  • Most employers—3 in 4—offer some kind of life insurance to employees. Supplemental insurance can add to it. Ulrich points out that employer-provided coverage doesn’t travel with you if you move or lose a job, so workers should be sure to have outside coverage as well.
  • One in 3 parents of young children say they don’t get financial help from anyone.
  • Life insurance needs often increase over time, especially as families grow, so parents might need to add to their coverage over time.

It’s important that you step back, look at your financial situation and take out any life insurance policies you need to help protect your family. As the old saying goes, “It’s better to be safe than sorry!”

The Top Sales Tactics You Should Avoid

Working SmarterIn the world of sales, there are many things that you could do that would lead to disaster when speaking to a client. Just one simple—or dumb—move can cause you to fail to close the deal, and leave a bad taste in your client’s mouth.

In order to prevent the loss a valuable client, Inc. Magazine has unveiled the top dumb and shockingly common sales tactics to you should avoid:

  1. Answering Objections the Customer Hasn’t Surfaced: While it is good to prepare yourself with reasonable answers to objections your customer may have, it isn’t a good idea to bring them up yourself.  Brining up and explaining objections only make you appear to be defensive and unsure of the real value of your product that you are offering them.
  2.  Leaving the ‘Next Step’ to the Customer: Don’t ask your client to do your job for you. Prompting your client to contact you “if you’re interested” or “in order to learn more” in your sales letters or emails leaves the ball in their court. You want to maintain control by using these closing statements: “I will call you next week to discuss whether it makes sense to discuss this matter further.”
  3.  Selling Features Rather Than Results:  Many salespeople incorrectly believe that their customers buy a particular product because of its desirable features. But, customers are only trying to find out the impact the product would have on their lives. Instead of rambling off the features hoping to entice the client to buy a product, instead focus on the bottom line of how it’s going to benefit and affect their lives.
  4.  Faking Intimacy: People are always on guard that you are trying to sell them something, so if they can sense your being less than genuine. Trying to “suck up” to your client will only turn them off and find ways to end your meeting. Just try to remain professional, personable, and genuine and a relationship will bloom over time.
  5.  Talking More Than Listening:  It’s easy to get overly excited and nervous and began rambling. You not only fail to find out what your customer is truly seeking, but you aggravate them as well. Rule of thumb: If you’re talking more than they are you’re probably losing the game
  6. Failing to Follow Through:  Building relationships with your customers are the key to success, repeat business and referrals.After you have met with a client or made a sale, it is important to follow up with your client and to answer any questions they may still have. Keeping in touch with your clients is integral in building relationships that will you will continue to benefit from well into the future.
  7. Treating a “Close” as the End of the Process: Unfortunately many salespeople take “closing the deal” to mean that the sales activity has ended. The real work begins after you close the deal because you must continue to build a relationship with your client by continuing to follow up with them. If you can successful build a relationship, you will see repeat business and referrals from your clients.
  8. Asking for a Referral Too Soon: You should only ask for referrals if your client is happy with your service and the products that you’ve sold them, because they are not going to risk their reputation by recommending someone whose ability to perform is unknown to them.

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How to Calculate Persistency and Placement

In the life insurance industry and at National Agents Alliance, we use placement and persistency to measure the quality of your performance. The concept is very simple. If you can’t get policies placed or keep policies on the books your persistency, placement and income falls with it. Whereas, if you can get policies placed and remain on the books, your persistency and placement rises along with your income and recognition within NAA.

To get a better understanding we will break down how to find your placement and persistency:

How to calculate placement rate:

First it is important to understand that quantity does not equal quality.

If you submit 10 cases but only eight cases have been placed and made it past the Free Look period (typically 30 days, but some states and products may vary), you take the number of placed cases over the number of submitted cases and divide.

Placement Calculation

Let’s remember that quantity doesn’t equal quality. For example, you increased the number of cases submitted to 100, but for one reason or another 30 cases were not placed. When you put 70 placed cases over 100 submitted cases your placement rate is only 70 percent, which is not better than only submitting 10 cases and placing eight.

Quantity vs Quality

The only way to increase your placement rate is to increase the number of placed cases over the number of submitted cases.

How to calculate 4 month persistency:

To calculate persistency you start with placed cases (not submitted business), which has made it through the Free Look period and are active with premiums paid to date.  If you placed 10 cases and only seven cases earned four months of premium then you have a 70 percent 4-month persistency. You must collect premium for all four months on all 10 cases in order to have 100 percent 4-month persistency.

Persistency Calculation

How to calculate 13-month persistency:

Take one month’s worth of business that has gone through the Free Look period and has stayed on the books.  If all of your cases have stayed on the books and premiums have been paid every month up to 13 months, then you have 100 percent persistency.

For example, if in January you placed 10 cases and in 13 months all 10 cases are still on the books, then you have a 100 percent persistency.

Persistency Calculation 2

You cannot determine your persistency in the 12th month, because you need to ensure that premiums have been met for the 12th month in order to calculate your persistency for that year. The same goes for business written in the second month; you have to wait until 13 months later to calculate that persistency for the second block. At the end of 25 months, you then can calculate your persistency for the whole years’ worth of business.

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