Singles and Doubles - Term Insurance and the Art of Carrier Selection
As much as we
might like to, most of us cannot spend our entire day working on the large,
exciting and highly profitable cases that are typical in the estate planning or
executive benefits arenas. We need to
eat, and that frequently means writing some term insurance.
The question
is how to do it profitably when it has become completely commoditized and the
margins are thinner than ever? The
answer is simple - spend as little time as possible processing the business. That, of course, is easier said than done and
we all have real-world, sometimes painful, experience to prove it. There is nothing worse than the little case
that manages to become a problem and devour time like a vacuum. Given this universal experience and the
desire to avoid it, let's take a brief "Defensive Term Processing" course. The first
step is to recognize some universal truths regarding term insurance and carrier
selection: - There
is more to the conversation than price.
-
Carrier
strength matters
-
Conversion
language matters (and is highly variable!)
-
Ease
of doing business matters
The last
point is one that deserves discussion. I
am not talking about simplified applications and underwriting processes
(although if they are executed well by a carrier that fits all other criteria,
then by all means use them!). Here's
what I mean about ease of doing business: Consistent
pricing - If the carrier's pricing bounces all over the place, so does their
application volume, and by extension, their service. Price and service can have an inverse
relationship if the carrier is constantly in and out of the top five to ten
spots on the quoting engines. Consolidated
Underwriting - Meaning that the same excellent underwriters who work on the
permanent cases also work on term. The
real problem is when there are entirely different processes and teams for term
versus permanent. We all know where the
higher quality folks are working, and its not the term side. An
understanding that the significance of the case may not be indicated by the
product and/or premium. This one kills
me. We all seem to get this, but many
carriers do not. A
minimum of what I call "automatic kick-outs".
There will always be some issues that will preclude a certain rate
class, but carriers that allow some debit/credit approach have a leg up.
All of the
items in the previous lists are important, but the last one could stand a
little more exploration. Recognizing all
the items listed above, think about slowing down to speed up. Specifically, ask all the screening questions
you can think of prior to generating the quote and focusing on a single
carrier. It is way easier to pivot to a
new carrier BEFORE the client sees the numbers than after we complete a 6 to 8
week underwriting with less than ideal results.
Need help with the questions?
Here you go:
May even be a
good idea to use this for the larger cases as well?
Summer's half over......go have some fun this weekend!
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