With 10,000 baby boomers turning 65 each day until 2030, this age group is a growing and popular market for final expense life insurance.
However, with the number of television and junk mail advertising hawking “no questions asked” final expense insurance, it’s easy to understand why some life agents aren’t exactly sure whether selling final expense life insurance is a legitimate, long-term opportunity.
I have sold final expense exclusively since 2011, so I want to help life insurance advisors determine whether this market fits their personality type, and whether the final expense business is a viable long-term career path for them.
Final expense is difficult to sell because prospects are older and not in good health.
Final expense life insurance is normally sold to people 50 and older, most of whom are on a fixed income. Understanding that final expense prospects skew older, some life agents believe these prospects are not in good health, thus difficult to qualify for coverage.
However, if the new final expense agent sets up his business appropriately, older age and health issues are not problematic to cover.
I recommend that agents who are new to final expense broker different carriers. Representing multiple insurance companies allows the final expense agent to offer the coverage most optimally designed for the prospect’s health. In the final expense business, no two carriers underwrite identically.
Even more, final expense products allow for underwriting flexibility normally not found in fully underwritten products. For example, final expense brokers can cover chronic obstructive pulmonary disease, diabetes, heart disease and cancer as well as mental health issues. This opens the opportunity to provide quality coverage to a variety of people who are in poorer health.
Therefore, if you’re interested in selling final expense, you’ll find your carriers provide fully underwritten coverage to more prospects who normally are declined. And insuring more prospects helps more people and increases your production.
Final expense prospects are on a fixed income and thus are not good prospects.
Most agents who are not involved in the final expense market are interested in selling exclusively to white-collar prospects. These prospects have more discretionary income and more problems that life insurance can solve.
When looking at blue-collar prospects — specifically those in the final expense demographic — many life agents struggle to understand the market opportunity. Agents wonder how they can make a living from selling to prospects who take home a monthly Social Security check that ranges between $1,000 and $1,500 a month.
As in business, what you make isn’t as important as what you keep after expenses. In many cases, our government subsidizes final expense prospects, allowing them to keep more of their monthly check. For example, programs exist to help older Americans reduce the costs associated with health care, rent and other bills. The result is more discretionary money for the prospect to spend on things such as final expense coverage.
Additionally, final expense prospects are extremely motivated to buy. Why? It’s because someone they loved died recently, thus they recognize their own mortality. A loved one’s death amplifies and justifies the need for final expense coverage, especially in the sad circumstances where the loved one did not have life insurance in place.
The market for selling final expense is extremely saturated, leaving little opportunity.
More insurance agents in other lines are transitioning into final expense.
For example, many agents are leaving the Medicare, mortgage protection and health insurance markets to sell final expense. Due in part to the growing interest in selling final expense, response rates for direct mail lead generation have decreased.
Because of these factors, agents interested in final expense think, “With more agents selling final expense, how likely will I achieve success?”
Luckily, despite more interest, final expense is still a great career opportunity. Agents can overcome saturation concerns by keeping high levels of prospecting activity.
Additionally, final expense is not a technical product. Final expense is simple to explain to prospects. And if you’re halfway good at presenting and finding a quality plan for your prospect, the odds are high they’ll buy. Final expense prospects rarely shop your rates.
All final expense coverage is overpriced, suboptimal coverage.
Agents who have a cursory understanding of final expense draw their experience from TV and junk mail ads. When investigating these final expense products, agents find these products don’t offer full coverage, or are increasing term policies. Therefore, they conclude that final expense products are generally low quality.
Thankfully for the final expense agent, this is true only of the “brand name” carriers who market via TV and junk mail. Independent final expense agents representing multiple carriers have access to products that do basic, simplified issue underwriting, while offering full first-day coverage at rates substantially lower than the brand-name carriers offered on TV and through the mail.
Only high-pressure sales tactics work to convince prospects to buy final expense.
Many agents interested in selling final expense insurance worry that they will have to sacrifice their values and browbeat their prospects into submission before they buy.
While there are agents who aggressively push final expense onto their prospects, the final expense agents who close a lot of business consistently follow a more educationally driven approach to closing business.
Final expense agents who focus on soberly describing how the product works relative to those products advertised on TV and in junk mail convert prospects who are higher in quality and keep their coverage longer. Plus, the agent’s new client appreciates the time and care they took to educate the client on his options, thus increasing loyalty to the agent.
The phrase, “The policy that stays is the policy that pays,” is the philosophy all final expense agents follow. And although they’re concerned with high production, final expense agents are focused on selling a policy that’s both easily affordable and matches the prospect’s insurance needs.
David Duford is the owner of Final Expense Agent Mentor, Chattanooga, Tenn. David may be contacted at [email protected]