This series of five brief articles have been combined into a package which will deliver 0.25 CPD hours to contribute towards your annual CPD target.
Each article reflects on soft skills development – from overcoming objections to handling loadings and exclusions to securing great referrals for your business…
1. Selling the Loaded or Exclusion Case
Ongoing changes in underwriting are often leading to exclusions and loadings being applied to policy applications, which can cause difficulties for the unprepared adviser and their client. Advisers, however, have a key role to play in helping clients understanding why an exclusion or loading has been applied and assisting them in securing appropriate levels of cover.
Jim Prigg from KnowledgeMaster calls on advisers to be prepared and ready to tackle the issue when it arises by focusing on the cover they can get. He also outlines some tactics advisers can use to offset the possible impact of a loading or exclusion…
With underwriting definitions playing a bigger role in the placing of risk there are lot more instances of loaded and exclusion cases being offered to the public. This means as an adviser you will need to be very aware of the sensibilities of the issue for the insured and tactics required to ensure the business is completed for the customer.
People can take the placing of a loading or exclusion very personally. This can cloud their judgment and make them defensive, angry and dismissive to accept advice on the product types or the sums insured.
So, what can you do for the client when a case is accepted with a loading or exclusion? Here are some tried and true tactics and techniques that have stood the test of time.
If you think there is an inkling that there may be a situation that will arise because of a loading or exclusion, pre-position yourself before the event to lowering expectations.
Simply explain that your job is to see if they can get the cover. That is the reason why you operate for your clients. Not everyone is a standard risk so you must preposition yourself to pre-empt the objection or concern people may have.
Congratulations! You can still get cover
When the news comes through your client has been accepted, phone and congratulate them. Share your enthusiasm and excitement. Make your feelings known so that when the issue of the loading or exclusion is brought up it is a positive not a negative.
In the case of Income Protection can we extend the waiting period?
A fallback position can be to lengthen the waiting period for income protection so that some of the extra premium released can be soaked up in insurable benefits.
Keep the same premium or keep the same cover?
Offer the choice to people. Do you still need to have the same cover even more than ever because of the loading?
“This is the standard rate for people with your conditions.”
Ben Feldman, the legendary American life insurance salesman, used this way of explaining to people this was their standard rate for cover for people with these conditions.
What do you want me to take out?
Often you will have delivered a package of covers that will include life insurance, trauma cover and income protection. Ask the client what they want to miss out on, what they want to take out or what they believe is most important to them.
The decision is theirs. It is interesting when this questioning style is used just how people respond to diminishing the value.
Tactics for selling the loaded or exclusion case
Take it to the max. Get as much as you can while you still can.
Ask the question of the client how much they and their family need the cover. Explain that they may not have the opportunity to buy the cover at this price or rate ever again. Invite them to apply for more, not less.
“If the cover cost you nothing, how much would you like to secure?”
This question puts the purchase in a different light for the client. You will be surprised at some of the answers you will receive. The main issue here is to ascertain the priority of the intended purchaser to actually go ahead with the proposal.
You can offer to case manage the risk over a 12 months period for the person by offering and suggesting things like:
- Extending waiting periods
- Submitting the case to another underwriter
- Suggest the prospect give up smoking
- Ask them to explore any preventative or supportive medication
- Developing an exercise regime
- Accept the loading now, but recheck in 12 months’ time for a reappraisal
Where can we find extra dollars in your budget?
When you did your original fact find you may have done a weekly budget for the client. If the premium required is substantial it is wise to return to the budget sheet to see if there is any fat. Can you rearrange other payments and priorities for expenses in a different way?
Is there someone else who can help with premium payments such as parents or grandparents? This is an often an untapped source of support for the newly married or those with young children and big overheads
This article is reprinted with permission from Jim Prigg, CEO and founder of Knowledgemaster Pty Ltd. KnowledgeMaster is an online resources company that delivers practical communications, interaction, sales and soft skills tips, tactics, techniques. Learn more about winning business programs and courses by contacting Jim.
Contact Jim Prigg to learn more about winning business programs and courses.
Contact or follow the author: Website | Email | Telephone: 03 5232 1500, 0408 520 453
2. Chris Unwin ‘Chrisisms’: Intergenerational Advice
In these next two articles, Chris Unwin draws on his experience as a highly successful risk adviser to share some great tips from his ‘Chrisisms’ series that cover opportunities associated with delivering intergenerational advice and the psychology of objections…
Have you ever heard an adviser say something along the lines of “Well, insurance is not really relevant for most of my clients, because most of them are pre or post retirees”? If you have – or if you’ve even said something similar yourself, then read on…
Can you spot the major flaw in the statement above?
If you were to ask a retiree the question:- “ What do you consider to be the single biggest financial risk that you face in your retirement?” or “ What do you think is the single biggest threat to your retirement nest egg?”, I guarantee that the large majority of retirees would answer one of the following :-
- Investment risk
- Market Risk or
- Another GFC
Would they be right? Absolutely not
We need to educate our retiree clients that by far and away the biggest threat to their retirement nest egg is if serious illness, injury or death were to strike a retiree’s child, grandchild or spouse thereof without proper protection being in place. What financial impact would such an event have potentially on your clients’ retirement nest egg?
Well, who do you think will be expected/required to fund the financial shortfall that this situation would create? You guessed it – the retirees! And what could this shortfall amount to? As a bare minimum, we would be talking about the injured/dead breadwinner’s income (possible on an ongoing basis) or the mum/homekeeper’s E.R.V. (Economic Replacement Value) again possibly on an ongoing basis – and this takes no account of other potential medical or capital expenses.
Once you have made your retiree client aware of this potential exposure, I would ask the question:- “ Tell me, in this scenario, would you rather fund the potential financial shortfall yourself out of your retirement nest egg or would you rather pay a small premium (which would have absolutely no impact on your retirement nest egg) to a life company so that the life company can fund the financial shortfall instead?
I believe this simple client engagement piece will more often than not open the door to at least meeting with the kids and/or grandkids, and although there would be no reason why they should not fund their own personal protection package, in a worst-case scenario, you know the retirees would be prepared to pay the premiums.
This simple strategy also results in an FYCB (For Your Clients’ Benefit), namely an appropriate personal protection package for all eligible children, grandchildren and spouses as well as an FYOB (For Your Own Benefit), namely you turn a shrinking business (as most of your clients are in draw down phase) into a stable or even better a growing business by bringing wealth accumulators into your client base.
3. Chris Unwin ‘Chrisisms’: The Psychology of Objections
Do you ever wish you could close more business without having to handle any objections along the way? If so, be careful what you wish for!
Most advisers I know would love to be able to make appointments and complete business without having to handle clients’ objections and overcome resistance. Understandable though this may be, it is important to embrace the mindset that objections are a positive sign and that handling them in your stride is just a necessary stepping stone on the way to doing business.
What we need to remember is that it is human nature to resist commitment – especially commitment to time or money, which is a bit inconvenient for us, isn’t it, because when we are looking to make an appointment we are looking for a commitment to someone’s time and when we are looking to do business, we are looking for a commitment to someone’s money! So, we really shouldn’t be surprised when we get objections. Indeed, we should regard objections as a positive sign and therefore welcome them and regard them merely as obstacles that need to be removed on the way to getting a result.
One distinction that we need to make is between objections and conditions. Understanding the difference is crucial to our mindset when tackling client resistance. The fundamental difference between the two is that conditions are reasons why business cannot be done (e.g. bankruptcy or impending death!) whereas objections are hurdles that need to be overcome on the way to doing business (i.e. everything else!).
Typically, there are 5 main reasons why clients raise objections and in turn 5 courses of action on our part depending on which of the 5 reasons the particular objection represents. The reasons and courses of action are as follows:
|Reasons for Giving an Objection||Appropriate Action|
|A need for more information||Provide the information|
|A genuine belief||Educate|
|To put you to the test||Take it in your stride|
|A search for reassurance||Reassure – focus on the benefits|
|A smokescreen||Dig deeper|
The reality is that the smokescreen is the most common thing that an objection represents because 90% of all client resistance has to do with the premium or the cost, but it will be expressed as something else because the client is loath to make affordability the main problem. For this reason, handling objections is a little bit like eating an apple i.e. taking bites from the outside in order to get to the core i.e. the cost.
There are only a finite number of objections either to making an appointment or doing business, so make sure that you have at least one way of handling all of the possible objections you may get, so that you can do so in a matter of fact way and with a smile on your face and remember:- once you have handled the objection, ask for the appointment or the business; otherwise you will probably get another objection!
4. Chris Unwin ‘Chrisisms’: Prospecting for Gold
Some advisers have no reservations in seeking referrals from their existing clients, but for others, this strategy does not sit comfortably. These two articles below share what Chris Unwin has to say about seeking and prepositioning referrals…
What constitutes gold in your business? Would it by any chance be quality clients? If so, are you prospecting for gold in the most efficient manner? To find out, read on…
When I first started in the business as a life insurance broker in London in 1978, cold calling was still a common way to prospect for clients, especially when you were still cutting your teeth in the business. I extended approximately 1500 cold invitations to a first appointment in my first nine months in the business (in addition to other forms of prospecting), and the end result was 12 cold clients! I didn’t have to be a genius to work out that this was not the most efficient form of prospecting!
So, if cold calling is the least efficient method of prospecting, what is the most efficient method of prospecting?
If you asked anyone building a business in any field what their preferred source of potential new client would be, I don’t know of anyone who would say anything other than a recommendation from a happy client – otherwise known in our business as a referral. Indeed, apart from friends, relatives and social contacts, I myself built two client bases numbering approximately 400 and 150 clients on opposite sides of the world almost exclusively off the back of referrals i.e. recommendations of happy clients.
So it never ceases to amaze me how much time and effort (and often wasted time and effort) advisers I speak to spend trying to prospect in what they perceive as potential gold mines in other people’s backyards where the entrance to the gold mine is usually pretty small and rocky with no tools for access when all the time they are sitting on by far and away the biggest potential gold mine of all in their own back yard where the entrance is huge, the turf is soft and there is a shovel ready to go!!
Why is it that so many advisers in our business are so reluctant to ask individuals who have already experienced firsthand the benefit of being a client for referrals and yet they have no problem asking people who are at arms’ length and who are typically not clients themselves for leads? And please remember, a recommendation from a happy client is a referral – anything else is a lead with varying degrees of warmth!
I suspect that, apart from some irrational fear of getting a client offside by asking for referrals i.e. fear of rejection, one of the most common reasons is that advisers don’t have a process for making referrals a natural consequence of business. This simply requires putting some building blocks in place during the initial advice process, so that referrals become an expectation at the point of sale.
5. Chris Unwin ‘Chrisisms’: Prepositioning Referrals
The large majority of advisers would substantially improve the number of referrals they get from new clients if they simply disciplined themselves to ask every new client for referrals at the conclusion of initial business. However, I believe we can improve our results in this area even more by putting just a couple of building blocks in place during the initial advice process.
I want to share with you a very simple step that I inserted into my initial client engagement process a long time ago, and which I believe was a major reason why 56% of the new clients I took on after coming to Australia gave me referrals. That may not sound like a particularly high percentage figure, but I can assure you the majority of advisers I speak to would give their right arm to get referrals from more than half of their new clients!
I also believe that this first building block for making referrals a natural consequence of business can and should be inserted at a very early stage in the process, namely at the end of the “Introduction” stage of the first client meeting i.e. before the completion of the Fact Find.
Once you have completed the crucial steps of positioning protection (off the back of the FSG) and have established and obtained agreement on the purpose of the meeting you are about to have, I believe the next crucial thing to do is to get your client’s ‘buy-in’ to the concepts of long term business relationship and regularity and continuity of service. Then it is off the back of the latter that we have the perfect springboard for getting a commitment to the principle of referrals even at this very early stage in the process.
I will now share with you what I would say in this context, but I stress that you should phrase it in your own way, understanding the message you are imparting but doing it in the language that you would use, not the language I would use.
So, having got the client’s ‘buy-in’ to the concept of regularity and continuity of service, I would go on to say:
“So as a direct result of that, the more clients I take on the more time I have to spend looking after those clients and providing them with a high-quality service, and therefore the less time I have left to expand my client base, which I haven’t quite finished doing yet – hence my meeting with you today, right?
So, I do tend to rely pretty much exclusively on my existing clients to recommend people to me who they think would appreciate the same quality of service, on the assumption of course that you yourself are only going to become a client if you believe there is a quality service to be had, agreed?
Great! So, assuming that you also recognise that you are not unique in being able to benefit from that service and that other people you know could also benefit, would there then under those circumstances be any reason why you wouldn’t be happy to recommend other people to me?”
When asked in this way and in this context, I have found it most unusual for clients to resist agreeing to the concept of giving referrals even at this early stage in the process, thereby sowing the seeds for referrals becoming the natural consequence of business.
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Chris Unwin says the most efficient method of prospecting is:CorrectIncorrect
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