Author: Dick Hartzen
Many insurance agencies have found it easy to increase revenue and services offered by adding life and health insurance to the agency portfolio. Numerous prospects already in the agency client list have been overlooked for many years. Here's how you can improve retention and the agency's bottom line.
Many insurance agencies have found it easy to increase revenue and services offered by adding life and health insurance to the agency portfolio. Numerous prospects already in the agency client list have been overlooked for many years.
Existing clients have been lost by letting another life or health agent enter the picture. This person may sell a small term policy today and replace the homeowners, auto or commercial policies in the future.
The two “r’”s required for success are lost. “Retention” and “renewals” become a thing of the past. The good news is that this can also work the other way. Your agency writing a life or health policy today may write the collateral business in the future. A careful analysis would also reveal:
Product
L&H P&C
High commissions X
Client loyalty X
Large amount of service X
Large number of E&O claims X
Multiple policies purchased X
Lifetime renewals X
Overlooked X
An agency feels good after a client calls for a new homeowner’s policy. A sale may be made with a minimal amount of effort. It is really an act of “order taking”. Putting life and health in the agency would involve discussing the need for a mortgage life policy if either bread earner dies.
According to numerous releases from mortgage holders, many more homes are repossessed due to a disability than a death. Once again, adding life and health products involves offering disability income to protect the mortgage commitment. One homeowner policy sale may lead to four life or health sales. A $100.00 commission earned with an HO3 may lead to a $1,000.00 commission with the additional sales.
While analyzing the need and type of coverage required for mortgage protection purposes, a discussion should be held on problems caused from a death or disability of:
Income earner #1:
final expense need (funeral costs are $8-$10,000.00),
outstanding obligations (credit cards, automobile balance, school loans, mortgage, bank loans, etc.)
family income needs provided by the deceased),
The same calculations are required for income earner #2.
Added items to be considered:
loss of joint income tax filing,
loss of IRA or retirement benefit,
loss of ½ of social security retirement benefit.
Non-income producing spouses require additional sums for replacement of services (baby sitting, shopping, house cleaning, etc.), loss of joint income tax filing, loss of social security retirement benefit.
Children can not be forgotten in the discussion. Needs include:
Additional funds may be needed for dependent parents or other family members. One homeowner policy may lead to numerous possible life or health sales.
Part 2 of this series will review how to determine amounts needed.
Part 2 Part 3
Copyright 2010 by Richard I Hartzen. Used with permission.
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