Notes From a Rookie

Background

About 14 months ago I knew that I was going to have to move to San Francisco, find a new job, or scarier yet, a new career. I was working for one of the most successful Internet companies in the world and we were in trouble – as good a niche as we had, we were bleeding and I saw the writing on the wall. My best chance to stay with this company was to move to San Francisco - I wasn’t willing to do that and I knew, even if I did move, that my chances of having a job with them six months out was slim.

So, what next? At the time I had a 2-year-old child and my wife was eight-and-a half months pregnant with our second.

I had helped a friend of mine start this neat little company a few years back called InsuranceOnly.com – I was mostly an investor with some strategic planning but I had been keeping my eye on things. I saw that they were doing really well selling life insurance leads to agents and that intrigued me. Upon further analysis, I realized that if you had the patience, the real money was actually in selling the insurance, not the lead. I have always been entrepreneurial, but I hadn’t been an entrepreneur – do I finally roll the dice or do I go back to working for someone else?

What did I do?

I crunched the numbers as many different ways as I could and finally decided that if I didn’t take the plunge now, I probably never would. So, I found a partner and we were off. Our first decision was to do things right (as we perceived it) or not at all. So we signed a six-month lease for office space in Denver and started learning the insurance business. (Two of my all time favorite sayings are - “Just Do It” and “Paralysis by Analysis.” )

Yes, I did crunch a lot of numbers and I did visit a direct response insurance business in Seattle before we made the decision to start; however, once the clock started ticking we simply got on the phone and figured out what worked and what didn’t. We had a game plan but we didn’t analyze every move we made, we tried things and we learned from our mistakes as quickly as we could recognize them.

The best advice I can give is: Just do it – the rest will come. There are many ways to do this business and you need to find the way that is most comfortable for you. A common theme to any business strategy is that you must work the business and you must have patience. If you are looking for a quick buck, this isn’t it. The life insurance business is one of delayed gratification; the person you talk to today that wants to buy will not hit your top line for about 75 days – and that is if everything works as it should.

What does that mean? It means that you need about 7-8 months of working capital and money to live off of before you start. We also made the decision to generate all of our business using Application Request Forms (ARF). What is an ARF? Simply put, it is the Rolls Royce of internet leads. They are good, but they are not cheap.

Tips From a Rookie

It would be quite easy to spend some of your valuable time reinventing the wheel. Yes, there are many ways to skin a cat. But there are a few things that can make your life a lot easier. Here are some of the things that I learned along the way:

Take good notes! One of the things that amazes me about working with Only Financial Group and Insurance Only is how open everyone is. Many people are willing to share their successes. Listen carefully and you will find a nugget each time you hear a story.
Know your strengths and weaknesses. Find a way to compensate for the weaknesses.
You will have an “A-Hah!” moment – make sure you capitalize on it. Our first such moment was presetting parameds. By doing this we were able to better qualify and get a firmer commitment from clients.
Have a plan for what to do with impaired risk clients (start with Greg Hellmich at Only Financial Group). You will see a lot of them – diabetes, coronary disease – try not to waste to much time sending these types of clients to top tier insurers (West Coast Life, Zurich, American General). We started out with about a 12% decline ratio (most of those are now in underwriting somewhere else). If we knew then what we know now, 75% of those declines would never have been sent to the company that declined them initially.
Hire an assistant. You need to spend your time selling and placing cases. Having someone there to help with mail and case management will allow you to increase your production dramatically.
Call during the golden hours. The best time to make calls seems to be 8-10 MST and 3-6 MST during the week and on Saturday mornings. Try to make yourself work 1 or 2 Saturday mornings each month – IT WILL PAY OFF!
Keep a list of medical conditions you have had approved, at what rate, and where it was approved. This, plus your impaired risk plan, will make your clients think you have been around the block.
Look through the paramed exam before submitting to underwriting. The person that told you they were 6’0” 190 lbs may really be 5’10” 235 lbs. It is easier to re-sell that case BEFORE they get a rated up approval they weren’t expecting.
Don’t let the highs get you too high or the lows get you too low. This is easier said than done, especially when you have worked 50 hour weeks for months & not taken home a dime. Not every good approval will be placed and only a few folks will hang up on you.
Run your business. Don’t let your business run you. One of the great things about running your own show is that it is up to you to decide if you want to have someone as a client. Don’t forget, making money is great but the real joy in life is your family. Try not to spend all of your time in the office.
Have patience!

Tip of the Iceberg

We are not out of the woods yet, but we are now about 9 months into the business and we see the light at the end of the tunnel. We are now paying ourselves, we have a full pipeline of business and we are starting to get referrals from current clients. We are also looking for new sales professionals to hire.

The good news is that I know we will only do better from here. We have proven the model works, but we still have not mastered the art of selling. We are getting referrals, but we still don’t ask for them each and every time – imagine what could happen if we did! I know we can also do a better job insuring spouses, children and increasing death benefit protection.

Take this advice as you wish. Like I said, I have only been in the direct response insurance business for nine months. However, we placed $40,000 in premium last month, so something must be working.

- Travis Phillips, Direct Response Financial