Who says it's not personal?
By Job de Ojeda, President, IIS, LLC

Today I got my first call for a claim on the life of one of my own clients. I guess, I’ve been lucky; I’m in my seventh year in the business and this is the first one. 

I’m not ashamed to admit I cried.  

Now, I’m not one to be very emotional. Hey, I often poke fun at my fiancée when she gets emotional over a movie or book. After all, being in the life insurance business, death is an everyday subject. Even so, I sat alone at my office desk and cried, just as if I’d lost a personal friend or family member. Tears still well up in my eyes as I write this later in the day. -And yet, this was someone I’d never met; not in the traditional sense anyway. 

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 Plug In and the Light Will Go On
By Rob Winter
Golden State West Insurance Services

A few weeks ago I took a trip to Seattle to try to find the “secret” to success in direct response selling. I was already an experienced property and casualty insurance professional, “but this was life insurance, so its different!” I thought.  Sure, I had been through all of the initial training, attended all of the I-seminars, I-forums, and Monday morning conference calls and had heard some good advice, but I wanted to find the real secret.  After all, I had been doing this for a whole month now and I hadn’t posted any numbers!  I had a few cases in underwriting but surely that was only because they were lay downs.  Was the holy grail of direct response selling secrets out there waiting to be discovered? 

Plug In 

Of course there is no secret, but you already knew that right?  By  “plugging in” with the folks at OFG, I’ve been able to realize several things that have shortened the learning curve and put me on the right track.  It is no secret that OFG encourages you to “plug in”. Being able to work with some of the finest people in the industry not only enhances your production but also makes for a fun business.  The synergy created by plugging in will move us all forward together.  I plugged in right away.  However, it took a few weeks for the light to go on.  Although I was being taught all of the things that would help me be more efficient, I was still bogged down in dealing with people that weren’t serious, letting them drag me through a long, long “no” for many weeks, quoting non-core carriers for fear that the small difference in monthly premium would actually make a difference in their decision (and causing the “paralysis of analysis” syndrome for me), and chasing those people that weren’t serious.  When the light went on, I finally realized several simple things.  

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Greatest Hits Archive
Watch Your Customers APR
By Karl Sorton

Have you ever sat down with your trusty business calculator to compute the APR customers pay when they pay other than annually for their term insurance?  Its a real eye opener.  First Colony Life (FCL) publishes their APR in their rate card.  FCL's monthly modal factor is .0875 which corresponds to a 10.8% APR.  Their Quarterly factor of 0.26 corresponds to 10.8% APR as well.  Their semi-annual factor of 0.51 computes to 8.2% APR.  The APR's for several of our other favorite companies are listed in the chart below. Having these APR's handy can help you when you sell an annual premium to your customers.    

Many agents point out that if you take 0.51 and multiply it by 2 you get 1.02 so the customer is paying 2% more than the annual premium.  That is an accurate observation, however the corresponding APR is much higher because half the charge was collected with the initial payment and the second charge was collected just six months into the year, so the insurance company got their extra charge well in advance, which corresponds to a much higher rate of interest than simply computing how many extra dollars were paid by the end of the year. 

Since the modal factor is commissionable you actually earn that APR when you sell an “other than annual” case.  However, with up front lead costs, the ordinary costs of running your business and the time value of the dollar, revenue earned now because of annual payment is worth more than 10.8% collected throughout the year.  From the carrier’s perspective remember this also, as a result of this “APR affect” it doesn't cost the carriers anything to annualize commissions.  They make more than their cost of money on the modal factor!   

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