Sales Case Studies
We understand the challenges you face in expanding into new markets, learning new sales concepts and continually looking at new ways to grow your practice. Independent Life Brokerage is committed to providing sales strategies and techniques you can implement in your practice. Here are a couple of examples of how we’ve been able to add value.
Business Valuations
For the past several years, Bill has been writing $150,000 of annual premium by providing life insurance protection products to his clients. His business had been stagnant for many years, and he was exploring new market opportunities and ways to expand. Bill decided to consult with the team at ILB and soon came to attend our study group on Business Valuations, A Tool for Marketing to Business Owners. Within six months, the strategies he used help him close a buy-sell agreement for $100,000 in target premium.
He credits his success to the tools and concepts he learned in his study group. Bill had always been looking to enter the business owner market, yet struggled to find a door opener that was compelling enough to motivate owners to want to see him. After attending our one-day seminar, Bill had an aha! moment. He decided to implement the tools and strategies we taught him. Bill decided to reach out to his local chamber of commerce and schedule a free seminar titled “What is Your Business Worth…And Why You Need to Know.” Twelve local businesses out of the 104-person chamber showed up to listen. One of those businesses was a chiropractic practice with two partners. Several weeks later, Bill met with the managing partner of the firm. The partners had started the practice 3 years ago and it currently generates approximately $2.5 million in annual gross revenues. Each partner was grossing $500,000 annually. After learning more about the business, Bill determined that the partners each needed approximately $4 million of capital to maintain income for their family. In addition, he reviewed the Form 1120 S from last years tax returns and determined that if the business was forced to be sold in a fire sale, it would fetch a fraction of the value needed to maintain their income. The partners were concerned and Bill suggested they conduct a valuation of the business to get an accurate assessment. They could then begin to look at proper planning options. Several months later Bill closed a sale on two $4 million Universal Life policies to fund the partners’ buy-sell agreement. The total annual premium was just over $100,000.
Policy Review
Jacob has been a producer for the past 18 years and has developed an impressive number of clients. In addition, he inherited many new clients from other brokers who are no longer in the business. The problem was that, except for his top 100 clients, he hadn’t spoken to many of them in several years. When he consulted the team at ILB, we suggested developing a Policy Review campaign to reach out to old clients.
The first step in the process was to identify who Jacob hadn’t spoken to in the past two years and generate a call and mailing list. We helped Jacob craft a Policy Review Prospecting Letter to send to his clients and some sample phone language for his assistant to use in calling to schedule an in-person meeting. After each meeting, Jacob would provide us with signed Client Authorization Letter and we would order an inforce illustration for each client. In addition he would provide us with their updated medical history and if necessary a signed copy of our preliminary application to order updated medical records on his clients. In one instance, Jacob met with a 68-year-old female who had lost her husband several years ago. She had several “Second to Die” cash value life policies totaling $10 million of coverage. The woman was not interested in paying the high six-figure premiums for the remainder of her life. After reviewing her updated medicals we determined that she was in excellent health and we could secure her favorably underwritten coverage. We then did a 1035 exchange of the cash value from her $10 million policy and procured a new policy with a guaranteed death benefit to her age of 100. There are several more examples of other ways that a Policy Review can generate new activity while adding value to your clients.
Life Insurance As An Asset Class – Death Benefit
Peter is a financial advisor with a growing practice that focuses both on managing client assets and using life insurance as an effective tool for protecting those assets. He started his practice six years ago and has focused on baby boomers who are nearing or in retirement. With the state of the estate tax in flux and no clear guidance, Peter saw a big drop-off in production in life insurance sales in his practice because many of his clients were reluctant to take action. We consulted with Peter and suggested he reposition life insurance as an asset class and a financial vehicle that upon death provides a favorable rate of return relative to other assets.
When looking at a client’s risk tolerance and how to allocate assets for his clients Peter added one simple question into his fact-finding process. He asked, ”If we found an asset class that for the eventual benefit of your children and grandchildren gave you a guaranteed rate of return that is higher than other asset classes, how much would you put in it annually, whether it was a good year or bad year in the market?” This simple question uncovered a world of opportunities and a new way for Peter to implement life insurance back into his practice. On each case, the team at ILB would evaluate his client’s medical conditions and age and determine which carrier could provide the best priced coverage to meet his client’s rate of return objectives. We would also provide a rate of return analysis so that the client can see the performance of this asset relative to other assets in his portfolio.