Life Insurance Referrals.

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What’s So Difficult About Selling Life Insurance?

Bonus Article
Written By John Lensi, CLU, ChFC, RHU, REBC, CMFC, LLIF
and Ted wolk, website author

The Top Four Reasons Why Consumers
Do Not Furnish Referrals

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Life insurance referrals come from mastering the art of a referred lead presentation. But before a producer develops a referred lead presentation, he or she would benefit from understanding the reasons why consumers do not furnish life insurance referrals to life insurance producers. Knowing this, allows a producer to adapt a referred lead presentation to address these consumer concerns.

But before we look at some of these reasons, and please note that I am referring to a “referred lead presentation”, we need to review some of the basics.

Obtaining qualified referrals isn’t simply a matter of just asking for some names of people your clients know in some haphazard fashion.

A Referred lead presentation is to  be delivered with the same degree of 
professionalism and mastery as a producer’s sales presentation.

Research into why consumers do not provide life insurance referrals can be summarized into four primary reasons:

1. Sales person did not earn the right to life insurance referrals (“nice person, but not someone we feel we would refer to our best friends …”)
   
   
2. Consumer is unclear what the sales person is going to do with the names of life insurance referrals they would consider referring (producer did not explain how he or she makes contact with referrals furnished from clients)
   
   
   
3. Consumer is unclear on the profile of life insurance referrals (people) the salesperson desires to work with (salesperson failed to paint this picture of the profile for the referral desired); and
   
   
4. The consumer is uncomfortable with what their close friends
   (whomever) would feel about being referred to this salesperson.

But the number one biggest reason agents don't get referrals is that they do not have a dynamite referred lead presentation (sales Talk) that works. 

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Here are two sample referred lead presentations.

There are of course a number of quality referred lead presentations this industry makes available to get life insurance referrals. Here are two proven and tested formats.

The first one is from www.an-insurance-agents-career.com and it is called the   Referred Lead Card System. This presentation includes a method to get referrals even if prospect does not buy. 

The second one I’ll share with you is below; perhaps it may be of some help to those who are in need of structure for a referred lead presentation 

Step one – first seal off the sales interview before starting the referred lead presentation to make sure the sales interview is completed in the mind of the client. (“Amy, are there any other questions I can address about your insurance?”).

Step two – congratulate the client on the wise decision they made to protect their family - or whatever the basis of the sale was.

(“Amy, I’d like to congratulate you on the wise decision you’ve made to protect the future of your family…”)

Step three – Explain how you plan to meet with the client on a regular basis.

“Amy, I’d like to explain how I work with new clients like yourself. I meet with them on a regular basis – generally annually – to make sure they continue to understand their insurance protection and to make sure current needs are being met…”

Step four – Explain how you work and that you would like their help.

(“Also, allow me to explain how I have been able to develop a clientele in my profession. Generally I’ve found people like yourself who are satisfied with the work I have completed for them refer me to others that I may offer my services to...”)

Step five – Reference back to the analysis you completed.

(“As I have done for you, I have found most people are unclear of their insurance needs and whether they have appropriate and adequate coverage, until they have a personalized confidential financial needs analysis done for them …”

Step six - Paint the picture of the client profile you desire to be referred to and how you  

(“Amy, before you would be kind enough to refer me to someone I may be able to help, I want you to be comfortable about a couple items:  

1. How I follow-up on life insurance referrals my clients provide me.
2. The type of people I can be of most help to …”[Explain both so you eliminate any client concerns.]
   

Step seven – Provide a compliance approved referral brochure for your client to record life insurance referrals, and if appropriate, write a personal note of recommendation (provide pen also ... and if you are addressing more than one person, provide a pen and referral brochure to each of them).

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One last thought on prospecting.

Many producers strive to penetrate the more upscale market, which in turn has the potential for greater financial rewards for the producer. The top segment of the marketplace has more disposable income and multiple financial needs, but is small, sophisticated, harder to access, and decisive.

Upscale asset holders do not respond well to mass marketing techniques, cold calls, mass mailings, or generic seminars. This market is more difficult to penetrate and generally the best method for penetration is through referral marketing to generate life insurance referrals.

Of further interest is the psycho graphics of the upscale market vs. the bottom segment relative buying financial services products. The upscale consumer generally takes a more logical and analytical approach to buying, whereas the lower asset held end of the market tends to buy more on emotion.

What can be drawn from this is the need to absolutely conduct a through and effective fact-finder with the more affluent consumer to more accurately analyze their multiple financial needs. This is one reason why financial planning has a high success rate within the upscale market.

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Producer control issue.

Earlier in these articles I said I would address both producer “fix” and control issues. The “fix” element has been addressed through suggesting a proper referred lead prospecting presentation. The “control issue” is probably better stated as earning a producers business.

Here we circle back to mostly home office controlled issues that fall outside of the control of the producer (although a catch 22 situation). Control issues include among others: compensation package – including HR related benefits; carrier product competitiveness; ease of doing business; efficiency of processing both new and post issue applications; underwriting flexibility; software and advanced marketing support; home office and field management support; sales incentives; marketing support; and carrier financial stability and reputation. Of course I’m referencing the complete package of earning producer loyalty.

This is a huge area and beyond the scope of this paper, but I did want to at least bring recognition to this important issue.

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A final comment pertaining to life insurance sales professionals.

Often I think of ranking some of the most important jobs in America in order of importance to society. I’m not actually sure where life insurance sales people would rank. I’m confident surgeons, medical research scientists, and teachers would make the top of the list, but close to the top in importance to society would be the value of the life insurance sales professional.

Few occupations contribute to the overall good of society as these professionals do. They have a difficult job and are undervalued in their importance they bear to protecting the financial dreams of families when a tragedy occurs.

I have sincere appreciation and respect to everyone making a living by protecting the dreams of tomorrow through the sale of life insurance and financial services products.

I hope some of my thoughts through out these articles will be of help to those who make a living selling life insurance by enabling producer’s to become more efficient in their day to day sales activities. For those who aren’t in a direct sales role, my desire is to at least provide a better understanding of the challenges inherent in selling life insurance.

John Lensi,  CLU, ChFC,  RHU, REBC, CMFC, LLIF, Charlotte, North Carolina

Learn and Earn - We also hope that this bonus article on life insurance referrals will help those in need of developing a good prospecting system. Too see more articles on how to sell insurance, go to the life insurance help library.

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