Only Financial Group

Direct Response Life Insurance Selling

What if a producer could identify the prospect, create rapport, gather information, quote the prospect insurance rates, and help the proposed insured select a policy, complete an application, get the policy through underwriting and deliver that policy, all without leaving their desk? And what if all of this activity could happen on a large scale fully tracked and was easily duplicated?

This is what a growing number of producers are doing—selling primarily term life insurance in a direct response fashion. Have you heard of these people or seen those advertisements for selling large amounts of insurance “in your underwear”?

This is Direct Response Life Insurance Selling. Will it work? Is it profitable? Will it hurt today’s life insurance producer? … How do they do it? What are the ingredients for success? These are some of the questions we hear in regard to selling life insurance without leaving your office. The fact is that it does work and it can be profitable. While we have respected ‘Financial Groups’, ‘Financial Advisors’, ‘Financial Planners’, and ‘Financial Networks’, this IS today’s purest form of life insurance selling. There are a number of factors that go into doing it right and Only Financial Group (www.onlyfinancial.com) is one of a small group of brokerages built around this new concept and capable of delivering leads in real time along with technology that fully embraces the power and ease of the Internet.

Direct to the carrier? No. Direct to the producer

Some $90+ Billion of life insurance premium was written last year and a growing amount of that is from Direct Response sales efforts. Some estimate that 8-10% of the premium written in 2002 was initiated and fulfilled in a direct response fashion. Direct to the carrier? No. Direct to the producer. That’s right, producers use the Internet, radio, direct mail, inserts, and other direct response media to move people to the action in the purchase of life insurance. The idea is not to change the distribution channel, but to leverage it in a new and unique way to serve the needs of millions. Term insurance has become a bit of a commodity. With that change and the new digital age, comes a change in buying motivations. People still want to protect their families; they still want to buy it from someone they like and trust; but they want to control the purchasing process and avoid an evening long sales pitch. Direct Response insurance selling fulfills this need.

The trend is significant toward this type of buying behavior and you can bet that enterprising producers will benefit for a generation to come. It is not easy; it is not a panacea but it is a legitimate business opportunity that many are enjoying. Today we see several paramedical services and insurance carriers embracing this niche and designing processes to fulfill that business. Zurich led the way with their Telelife and now Z-app process; First Penn Pacific, Protective, First Colony, Old Republic, AIG/American General and others are now following suit to design systems and make this type of business easy to transact. Intellisys, a LabOne company, and now ReliaQuote, and Bisys Insurance Services with EMSI, have designed back-end fulfillment processes all designed to help the producer transact higher volumes of term life insurance business. The entities above operate in but one or two of the selling cycle phases. They’re experts at what they do, but that’s all they do. What Only Financial Group does is meld these companies and services into one seamless and simple process for the agent.

The industry is littered with many competent producers that are knowledgeable professionals, likeable folks, hard workers, but poor prospectors – or, likely, they are simply tired of the endless prospecting grind. In Direct Response selling these producers purchase leads or application requests from us or other lead providers. They go to work on the phone, through fax, email and U.S. Mail to establish a relationship, understand the prospects needs and recommend a competitive product. As in the past, the individual producer stays in the game to handle problems, get the policy through underwriting, get it placed and paid and then receives full commission for services provided.

It is easier to make the sale than it is to get it paid

Volume rules the day and often 5, 10, even 15-20 sales are made in one days work. Premiums are modest and average $400 - $2400 depending on the types of leads purchased and up selling effectiveness. Follow up is the big task for the selling agent, not prospecting. It is easier to make the sale than it is to get it paid – a stark departure from traditional selling. The keys to Direct Response success are:

Identifying and maintaining a consistent lead source
Employing a comprehensive tracking system
Advanced commissions
Embracing the Impaired Risk market and easy access to solution tools
Learning to up sell over the telephone

Direct Response selling is only now unfolding. Ahead are opportunities not only in life, but also in permanent life sales, annuities and long term care and even DI. Carriers, brokerages, paramedical companies and producers alike are all recognizing this newer way of buying life insurance. Demographics are clear, baby boomers will have increasingly more frequent and severe impairments (even slight impairments) in the coming years and when they are rated or declined by their property and casualty agent’s company, where do you think they will go?

The younger generations use direct buying channels more and more each day. One Direct Response producer put it this way, “Out of 100 inquiries I receive, 2 or 3 are from students doing school projects on using the Internet to buy goods and services to run a household – how do you think those kids are going to buy life insurance?”

As in so many parts of our wonderful business, this is a niche that can work if a producer decides to work it. Tremendous value and satisfaction can come from protecting several families and businesses each day. It does not hurt that the prospecting is done for the producer; satisfaction is derived from multiple workday victories protecting a family’s financial security and receiving significant commission rewards for a job done more effectively and more efficiently.