Adapting the Sale

Often times we run into appointments or clients who have mortgages so high that to give them what they actually want would be something that they can not afford.  Of course, everybody wants to drive the Tesla and everybody wants to live in the mansion, but often times it is just not possible.  We are not car salesman.  Once they leave the lot the sale is not over.  We need to keep them on the books.  If the price is too high they will end up canceling in the future.  

So we need to get them excited about something that they can afford and pay monthly.  I know it’s so easy to get the client excited about a certain product such as cash back, but if we know the price is to high that they can’t afford it then we will be getting them excited about something that they can not afford.  In other words, building their hopes up and then tearing them down with the price, therefore losing the sale.

Here is the solution.  The majority of the time we can build, create or push a plan that will fit their needs but at the same time be an affordable monthly payment.  A good goal to have is to keep the premium within $150 - $300.  So if a cash back plan was $1,100 I would not push that plan.  I would use a different approach.

Some people say “Well I’m going to sell what the people want!”  Sell them what they need, and also what they can afford.  Now be careful when you read this.  Don’t pre-judge a person thinking that they only make so much so they can only afford so much.  However, if you keep your sales between $125 - $225 you will make more sales, keep more clients on the books, and therefore make more money.

Here is how you do it.  It is important that you run numbers ahead of time before you go out on the appointment so you have a general idea on what it will cost; even if you have a laptop.  After you run the first numbers, run a few of the following plans and keep those in mind as well.

Remember we work in a “Conceptual Sales” Industry.  Meaning; these clients can’t get an insurance policy and punch on the gas, feel the A/C against their face, feel the leather seats or blast the Bose stereo.  Life insurance is a piece of paper; it’s a “concept” that if they die, we will take care of their family.  That is why Life insurance, marketed as Mortgage Protection, works so well.  We are attaching a tangible item to a concept.

These plans are the same.  They are ideas, concepts, and marketing ideas to present an insurance policy.  Some of these ideas have been created in this very office and have worked well for many years.

In order to do any of these you need to ask a lot of questions at the beginning of the appointment so you can find out exactly what the client needs.  Every situation is different and every client has their own concerns.

One thing that is very important.  Always remember that the key to all of this is in the delivery of the concept.  It is all how you present it.  If you present it like they are losing out and they have to settle for this plan; the sale is gone.  However, if you present it like this is exactly what they need in their situation, they will buy!!  They need to see the advantages and what the advantages mean to them.

Hybrid Plans

Laddering

Split Mortgage 

What you do with this plan is divide up the coverage between the two of them and cover them both for half the mortgage on each.  Example: If the mortgage is 200k, then put 100k on each spouse.  When you explain this policy you tell them if one of the spouses passes away then the living spouse will take the 100k, apply it to their mortgage.  They then can refinance the home for half the mortgage.  Now your payments drop more then half.  And the living spouse can continue to work and make the payments on the home.  Also vice versa, if something were to happen to the other spouse then the living spouse can do the same thing.  If they both pass away then the kids will receive the full 200k leaving the home free and clear.  This plan works really well when both of the clients work.

Another option is splitting the mortgage according to income.  For example, if the wife makes 30k and the husband makes 70k; you would divide up the coverage 70/30.

Lower the number of Years

This is how you could explain this plan.  “The good thing about this plan Mr. Prospect is if we put the coverage at 10 years, then first it will be less expensive and more economical, and second, since the plan has a conversion option up to 80% of the life of the policy, you can convert it to a permanent plan before the end of the 8th year.”  Then they will automatically ask, “Will it be more expensive?”  You answer, “Yes, however what a lot of my clients do is lower the coverage since the mortgage is less and keep the premiums about the same.”  (Cutting down the # of years can significantly decrease the premium.  However, it significantly decreases your compensation as well.)

Another situation where I use this plan is when they have kids in their teens and their main concern is covering the home while the kids are still growing up.  So I run the plan as long as it takes for the youngest kid to reach age 25.  Example, if the youngest kid is 13, then I run the plan for 12 years.

This plan also works for people in their 50s.  You can approach it this way.  “Mr. Prospect, I recommend to you a plan for 10 or 15 years.  Let me tell you why.  10 years is going to take you to age 60.  By that time you will have your 401K or your retirement built up enough that if you were to pass away, that would be liquidable to your spouse and now she has enough money to live off of and make the payments on the home.  (I only do this if I know he has a retirement built up.)

Only cover one spouse

This especially works if only one spouse works; that way you can justify not covering the other spouse because there is not much of a financial need.  Or put a split mortgage on the spouse at home and full coverage on the one that works.

Supplemental Selling

By asking the right questions at the beginning you find out how much insurance they already have in force.  Then you try to work in some sort of supplemental insurance.  For example, if the client owes 500K on his home and he already has 300K through work, then you can sell him a policy for 200K.  That way their whole mortgage is covered in case of a premature death.

Senior Plans (Safe Haven Plans)

First, this is not a designed plan from any company, meaning it’s nothing that you mark on the application.  It is more of an AIM designed plan for the senior citizens.

SAFE HAVEN ACCOUNT

1) 3 year

2) 5 year

1)  The 3 year plan is designed to pay the monthly mortgage for a period of 3 years if the spouse were to pass away.  To figure this out you take the mortgage, times it by 12 for 12 months in a year and then times it by 3 for three years.

$1,020 x 12 x 3 = $36,720  65 years old = $116.00

2)  The 5 year plan is the same but you times it by 5 instead of 3.

The thing to remember about some of the senior citizens is that they are on a fixed income that wont change.  So they don’t have a lot of money to work with.  Of course, good questioning before the appointment will always help in deciding whether a Safe Haven Account is good for that situation.