ALYSE BLUMBERG, Blumberg Financial Services
WALT BOGDAN, Bogdan and Associates, Inc.
DON BOOZER, Don Boozer & Associates
Q: What do you find most exciting about the insurance business?
Alyse Blumberg: The opportunity to work with people from varied backgrounds, hear their stories and find solutions that best meet their individual needs. Helping to protect their businesses, their savings and, most importantly, their families is truly invigorating. The business enables me to utilize my educational background when interacting with producers and frequently their clients in point-of-sale scenarios. I’ve learned through experience that our educational system gives us the tools to earn a living but never how to save or protect our earnings.
Most exciting is that the industry has enabled me to learn so much about the variety of products and tools that are available to help meet my personal goals and then to be able to share this learning with others.
The insurance business provides so many choices of how and where you want to work-a carrier home office, direct sales, distribution, in person or online. It offers an opportunity for a work-life balance for those who need this flexibility while raising children, caring for parents and sometimes doing both. Technology has made these options a reality. How many other career choices enable us to choose where, with whom and how we want to interact with our client base-be they producers or clients?
The most rewarding aspect of the business has been to provide financial assistance in life situations when money is most needed-for sickness, college planning, retirement, gifting purposes or upon death. No one has ever declined our checks in our agency’s 51-year history. What a gratifying experience working in the insurance business has been!
Walt Bogdan: Hands down, the most exciting part of the insurance business is being involved in the problem-solving process that goes into getting a case placed. Every broker who calls our office is an individual with his own unique situations and objectives, and the same is true for his clients. My job is to find a competitively priced solution that meets the client’s individual goals. The only way that I can do that is by being fully engaged with the broker throughout the process. For me, the ultimate excitement comes from presenting an option to the broker that allows his client to say yes.
Don Boozer: I celebrated my 46th anniversary in the life insurance industry on April 15, 2013. During the 46 years, I have seen more changes than I care to remember. Some of you have been around as long as I have and will remember what a rate book is…most of you will not. Some of you will remember how we calculated rates and values before we had computers or even calculators…most of you won’t. Some of you will remember when a $100,000 policy was a nice sale…most of you won’t.
A lot has changed in the last four decades, but prospecting has always been the biggest obstacle to making sales, and that has not changed through all of these years. The sales trainer who taught me the basics of selling life insurance said to me, “If I told you that the only people you can sell to would be red-headed men, you would be a resounding success.” The reason, of course, is that I would be able to identify my prospects…that theory hasn’t changed either. If you can build a practice around a certain group of people, your chance of success will increase dramatically. It really doesn’t matter which group of people you choose as long as you stay focused on your market. My best tip is to choose your market, become an expert in that field and stay focused.
The answers that I give to the questions today will be from the perspective of a guy steeped in the lessons of the past, who has been here since the dinosaurs roamed the forests, but who has had the opportunity to learn to appreciate the technology and products we have today.
What do I find most exciting about the insurance business? Everything about the life insurance business is exciting except the paperwork. Most of today’s paperwork is really just input into a computer. That doesn’t mean it is not important-it is. For me, the most exciting aspect of our business is that everything today is technology-based, which is good. The products we offer today require a computer-generated, printed and signed illustration-and that is just the beginning. Today you can use a drop ticket application process and write a case, deliver it and get paid-all without leaving your house. The person who succeeds in our business today is the person who learns to harness technology and use it most effectively.
Q: What about the life insurance business most concerns you?
Bogdan: My biggest concern has to be the lack of new insurance brokers coming into the business. Plus, for the new brokers who are coming into our business, I have concerns about the amount of training they receive. Many of the “seasoned” brokers entered the business through a career shop and underwent an extensive training curriculum and, now, after 20, 30, 40 years in the business, they have become extremely competent. Deservedly, many of these brokers are entering retirement or are in the process of winding down their sales activity. Where does the next crop of experienced insurance advisors come from?
Boozer: That one is easy. I am concerned that we are losing our sales force and that we are not doing enough to replace it. I am also concerned that many of our agents are not “selling” anymore. Many of the sales are not new sales but, rather, just replacements of older policies. That transaction doesn’t require any real salesmanship.
Selling is an art, and I don’t see selling being taught enough today. There are many great salesmen (and saleswomen) in our business-learn from them. Learn about buying signs, hot buttons, soft and hard closes, and implied consent. There are times when these theories will be just what you need to convince a prospect to protect his family. Take the time to learn and to bring needs selling back to your practice. You will enjoy greater success and greater earnings than the transactional sales going on around you.
The best example that I can give of the lost art of selling is when we submit an application, expecting to get a select preferred rate. But what we get is just a preferred rate because the client has medical or family issues. Far too often, agents can’t place cases such as these (even with a preferred rate)-and that is just wrong!
My second concern is that I haven’t seen anything new in the life insurance industry since the 1980s. I see a lot of warmed-over ideas-but creativity seems to have given way to the financial restrictions faced by the companies. Products given to us today are shaped by the bottom lines of the companies rather than the needs of the client.
Nearly all of the good ideas and great products that we have enjoyed over the past years were first conceived in the minds of agents. These agents were salesmen who used their creative abilities to discover a need and then helped build a product that would solve that need. We need to see more of that today.
Blumberg: Today, more than ever, there seems to be a lack of strategic partnering between carriers and distribution. Career agency systems are rapidly shrinking, and companies and brokerage agencies are struggling with the issue of future distribution.
The training tools for new producers have been in place for decades, but the way to recruit talented professionals and entrepreneurs has changed. The life insurance industry has been slow to adapt to our changing society. Many carriers are hiring and training employees for direct marketing campaigns. Why not market to our very diverse population and share the expenses to hire, train and recruit professionals throughout the country to build their own businesses, manage their futures and maximize opportunities and ROI for all parties?
The internet has changed the way we communicate with each other, the way we research topics, and the way we purchase many commodities. If the internet was the only method for interaction, there would be no free-standing stores, offices or schools.
We can all have a wonderful future in this industry if we change the public’s perception of us from sales people to valued professionals. We need to start trusting each other and recognizing that people of all ages and nationalities need personalized help and education regarding their financial security.
Why not recruit insurance planning specialists instead of insurance agents? Why not be on the cutting edge of new technology instead of always trailing behind?
All aspects of the insurance business are for the living, not just the living benefits of a life insurance policy. My greatest concern for this business lies with the future of distribution and whether the carriers are farsighted or nearsighted regarding the potential and flexibility afforded to those involved in all facets of the industry.
From sourcing a factory partner (carriers), product wholesaling (brokerage general agencies) or point-of-sale (insurance planning specialists, internet, banking, wire houses, P&C agencies, realtors or direct marketing), we all need to become more nimble in order to keep up with the changes in how consumers purchase products.
Q: What new product twists or legislation do you believe producers should be aware of?
Boozer: Based on what is going on in Washington these days, I believe that our business will be the next place the government will attack when they have finished off the energy business and the automobile industry. As long as we have politicians who don’t think the country has a spending problem and who refuse to balance the budget-we have a great deal to fear.
Agents and brokers need to be politically active. They need to know what is happening and they need to be a big part of changing the direction of the country.
Blumberg: Producers need to be aware of the changing economic and cultural diversity in our country and understand how the various product riders can provide financial solutions for present and future generations. As health care continues to improve longevity and procedures requiring lengthy hospitalizations in the past are now being handled in alternative settings, long term care and critical illness products and riders will provide a source of funding that our traditional health insurance doesn’t cover. I have always referred to long term care insurance as your other health insurance for this very reason.
With individual LTCI products becoming more expensive and restrictive, and with more carriers exiting the market, we see that hybrid products offer more stability. These hybrids offer fixed premiums and the guarantee that during lifetime, or at death, someone will receive cash on a currently tax-favored basis when most needed. These products can also be used for supplementing benefits provided by an individual long term care policy. Producers need to understand when a reimbursement product or indemnity product is most appropriate for their client.
As companies shift from guaranteed universal life products to life expectancy priced products, producers should be aware of their clients’ family health histories. Those with longevity in their family may be more inclined to pay a slightly higher premium for longer guarantees than those not so fortunate.
In addition, producers should be aware of their state laws when working with clients in potentially litigious professions or businesses. In a creditor-protected state, the cash value build-up in a life insurance policy is not accessible to a creditor. Whole life, accumulation universal life products and indexed universal life may be a perfect solution for planning purposes.
Under current guidelines, the cash value of a life insurance policy is not reportable on a Free Application for Federal Student Aid (FAFSA) for college planning purposes. In the event of a premature death, college funding will be provided as a death benefit.
As living expenses continue to rise and savings for many continue to decrease, retirement planning becomes a critical discussion for all. Life insurance is a vehicle that can be used to supplement cash in retirement years.
To summarize, producers need to be aware of how different products, riders and changing legislation will affect what product will be the best solution for any given client situation.
Bogdan: I’m cautious about the resurgence of permanent life insurance policies that are built on current assumptions instead of guarantees. Given the choice of a policy with guaranteed premiums or a policy with non-guaranteed premiums, I believe most would choose the guaranteed premium “route.” I subscribe to a low cost, guaranteed death benefit philosophy when it comes to life insurance. Although I understand the benefit of cash values in a life insurance policy, that is not what we do best. At the end of the day, clients don’t want to think about their insurance. Guarantees allow that to happen. When it comes to permanent insurance, clients deserve that.
Q: What advice about building an insurance business do you have for producers?
Blumberg: Create a business plan with the assistance of other professional advisors-attorneys and accountants-so that you build equity, value and a profitable business model. Monitor your expenses and have emergency capital available for unexpected circumstances. Establish business credit lines and banking accounts with your financial institutions. Get yourself a good accountant that fits your needs like Wizz Accounting Ltd. Protect your business with appropriate risk management including comprehensive E&O coverage, business insurance, and security and documentation systems.
Build a strong, well-rounded team with members who share similar values and goals. Work as a team, not as individuals on a team. Invest in your own education and the continuing education of your team members. Cross-train your staff so everyone knows how to do everything but can focus on what they do best. Remember that the first contact with your business will be the person who answers the phone, responds to email or sits at the reception desk; be certain that you have confidence in their ability to represent your business in the best light possible.
It is also no secret that the interior design and decor of your office can also be used to set the scene and make an impression. Your furnishings and facilities should be a reflection of your company and therefore if your interiors are in need of an upgrade, you can get office furniture from here. The chairs, desks, and even the cabinets in your office all contribute to the atmosphere of your workplace and therefore it is crucial that your furnishings are comfortable, inviting, and modern.
Most importantly, love what you do and have a succession plan in place, because if you’re building a business, your team members will know that they have a future in creating a successful practice with you.
Bogdan: Only sell products you believe in. If you wouldn’t sell a product to your mother, don’t sell it to your clients.
Boozer:
?1.?Use technology to help you build your business. It is there and it is relatively inexpensive. Those who learn to harness it for their use will succeed.
?2.?Invest some time in learning to be a salesman. There is no shame in being a “salesman.” The most successful people in our society are people who know how to sell their goods and services. When you learn to do that effectively, you will be on the road to success.
?3.?Be an active member of NAIFA and work hard enough to qualify for the Million Dollar Round Table. I have had the opportunity to watch a lot of successful agents during the past 46 years. These folks have many similar qualities that make them successful. One is that they are not afraid of hard work. They are willing to do the things that unsuccessful agents won’t do. Another similarity is that nearly all of them are Million Dollar Round Table qualifiers. NAIFA actively lobbies for you in Washington and, regardless of how you feel, you need their help now more than ever-and they need you to help give them the clout needed to beat down the attacks on our industry.
?4.?Build relationships with your clients. I was lucky enough to get to see a presentation recently by an enthusiastic young man named Bo Eason who believes that success begins and ends with the building of relationships. His approach to the beginning of the relationship is that you should share some really personal fact about your life with your clients to draw them closer to you. In his case, he told us that when he was nine years old he decided that he wanted to be a great football player. Even though he was undersized and not gifted with great ability and failed often, this goal from his early life drove him to be one of the best players ever in the NFL.
The best way to build relationships is to actually care what happens to your clients and their families. If you really care-the relationship will follow.
?Whatever your technique, I believe that once you establish an actual relationship with your clients (and if you give them professional service and quality products) you will have an excellent opportunity to grow with them.
As I look back over the past 46 years, the agents who have succeeded to the greatest degree are the ones who followed the principals listed above. I can tell you with some certainty that if you will do likewise-you will be successful too. [DB]
