Preventing Replacement as a Life Insurance Agent

Replacement is one of the most challenging things to deal with as an agent. However, through Competitive Analysis / Automated Underwriting, a few sales tactics, and performing some check-in routines, you can mitigate that risk.

In 2020, around 54% of Americans were covered by life insurance. More often than not, many people overestimate the cost of term life insurance; with estimates doubling what the actual cost really is. As an agent, you must be sure to educate your clients on what plans cover and how much. With a huge wealth of information available to you, it can be pretty daunting to remember everything there is to know about all the carriers and their plans. However, there are many other key tactics you must polish in order to prevent yourself from getting replaced by another agent.

There are many different reasons why an agent could get replaced, but one very basic reason is because the agent (or product) simply isn’t fulfilling the client’s needs. A client could come in with a very specific list of medical conditions and would like to apply for Final Expense coverage; possibly even for the first time. However, the agent they went to seems to not know many products that will provide coverage for their situation. In the end, the client may not buy into any policies and the relationship ends there. The best thing the agent can do is to have tools that can quickly provide them with all the plans available to every client given their specific medical conditions. With many automated underwriting tools, an agent can quickly fill in this potential shortcoming.

Let say Jack is visiting Mrs. Jones (who has a litany of health concerns). Jack is fairly new at the business (only a few months in). Jack looks up all of the 15 medications that Mrs. Jones takes and Mrs. Jones is getting impatient – it’s been 20 minutes already for him to check 3 products. He writes a Guaranteed Issue. Jack’s colleague Jill unknowingly got the same lead as Jack and ends up sitting down with Mrs. Jones a day or two after Jack left. Jill automatically processes all 15 of Mrs. Jones’s medications and evaluates the landscape (using Best Plan Pro’s FEX Competitive Analysis Mode) and found that there was a Final Expense plan that would save Mrs. Jones $30/mo AND give day 1 coverage. Jack just got replaced. Jack could have known his replacement risk just by knowing the carriers that would compete for Mrs. Jones’s policy.

If you are a newer agent, there’s a lot of work to do. You may not have as many contacts to get your name out there and your client pool is likely limited. In essence, you’ll have plenty of competition not only with other newer agents, but also with the bigger, well-established agents in your area. Despite all of these hurdles working against you, you must still have strong sales pitches ready with each client. As stated earlier, any agent can quickly be replaced if they cannot provide proper coverage for their clients. Make sure you have plenty of different products at your disposal or at least have the knowledge to point your client in the right direction if you can’t secure a sale. If you find out your client qualifies for a plan you don’t currently sell, consider adding it to your portfolio. However, in the house, knowing that you need to add a product to your roster doesn’t help. In the meantime, it’s an easy sell to say “Mrs. Jones, this larger company has been around for decades. Would you bet your family’s security, let’s say, on a Walmart or McDonalds being around 50 years from now or a local sandwich shop? I would put my money on the company with the long track record. What would you like to do?”

The bigger carriers easily take on the most clientele due to many factors working in their favor: marketing, available budget, reputation, etc. However, this doesn’t mean you have to sell them every time. Once again, knowledge of the industry is a very important factor in competing for clients. You can possibly take a client from a bigger carrier if you’re able to find a plan that can save money in the long run. Additionally, some clients don’t think about their insurance products on a monthly basis, but saving an extra $10-$15/mo from that ACH pull is noticeable. That being said the strongest points you can make in favor of a smaller carrier are, better prices, less overhead, more tailored to your needs. Also, in practice, if the carrier goes out of business, other carriers buy out the policies so that the policies just transfer to a different carrier! No harm, no foul.

One of the first questions (after establishing rapport) you should ask a client is their need (which is probably going to be their monthly budget). Nothing turns potential buyers away faster than not having products that they can afford. Make sure you have products available that can cover differing budgets. More importantly, finding the best coverage given how much they are willing to spend is a very important skill that helps you from getting replaced as a sales agent. It shows that you genuinely care about your client’s needs and are willing to go the extra mile to ensure they are properly covered. If someone needs $12,000 of coverage, but can only afford $8,000, that creates an issue where they’re setting you up for failure. Try going that extra mile to see how you can help their overall budget! Going that extra mile can be something kind you can do and get both of you what you need. Also – don’t forget to illustrate how $5 less and more can change their coverage amount!

After your first sale with the client, your relationship need not end there. You can reach out every now and again to see if their coverage is adequate or if anything has changed since you last spoke. You can easily be replaced if your only function with your client is to sell them insurance. Reaching out and checking on them helps build trust and rapport. It could also have the added benefit of more clients get referred to you in the future. If in speaking with them you find out that they can quality for a better policy, definitely write them a new policy that’s better suited for them. Make this annual review a routine part of your sales system. If a client qualifies for graded this year, but would qualify for level next, it’s worth another look next year to see if it’s a worthwhile change!