August 20, 2014 Leave a comment
As I’ve learned in my work with SIMA, Final Expense Life is a product whose time has come. I worked with Adam Barkow of FEX Quotes to create a survey to find out more about how agents are selling Final Expense.
There is no doubt – Final Expense is heating up! Given the aging population, consumer demand is of course high. Further, in a down economy, consumers want to make sure that loved ones are not burdened with burial costs. From the agents’ perspective, since the advent of PPACA (and dramatically dropping under-65 health commissions), interest in the senior market – primarily Medicare Supplement/Advantage and Part D – has been very high. Consequently, the competition for true Medicare age-in leads is fierce, driving up Medicare leads prices. Further, CMS recently announced that commissions will be delayed this year for MA/MAPD. It’s reasonable to see that agents specializing in the senior market are looking for new ways to make a living, while still providing a product many people truly need.
Final Expense Life can provide commissions averaging in excess of $500 per policy. With enough prospects, the right approach, and the right tools to assist in the sale, an agent can do quite well focusing on Final Expense as a product line.
As the survey showed, most agents who don’t sell Final Expense just haven’t tried it yet! Very few seem to have tried and failed. Of those who have failed, usually it was due to the cost of – or lack of – final expense leads. Some agents had difficulties with their up-line or carrier. For the most part, however, it’s a product that seems to stick – once agents try it, they seem to keep selling it.
Among those who DO sell Final Expense, it’s an important product for them. Only about 25% of agents surveyed do not see it as an important product within their mix. Once an agent begins selling Final Expense, it becomes their focus.
Most agents produce a small number of policies per month – about 40% of agents produce only 1 or 2 policies per month. A full 75% of agents produce 10 or less per month. Some agents, however, are able to produce quite a bit of final expense – about 7% produce more than 26 policies per month on the average (which would provide in excess of $150,000 in annual income).
Final Expense is a newer product-line focus. 75% of Final Expense producers have been selling the product for 5 years or less. Only 9% have sold the product for 20+ years.
While the product line focus may be new, the selling process is definitely old school. Final Expense is a Face-to-Face type of business. 70% of Final Expense agents sell ENTIRELY Face to Face, and only 6% of agents are able to sell mostly remote (Phone/Internet).
Technologically, the industry still seems to be in the dark ages – or at least stuck in the 1980s. It’s largely about Email and Fax, and about 57% have discovered online Final Expense quoting. Only 31% use CRM to keep track of their customers, and a scant 7% use auto/power dialers.
The industry is starting to embrace comparative quoting, which has long been a staple of the Under 65 Life and Health business. About a half of the agents surveyed use some form of quoting service, either using the carrier’s own quoting, or taking advantage of FEX Quotes individually or via their FMO.
Again, agents who have “found” Final Expense seem to be taking to it quickly. Outside of training, which over one third mentioned as a need (probably due to the newness of the product line focus), the main problem just seems to be the lack of Final Expense Leads. A full 76% of agents stated that they need more and better qualified Leads. This could be because “Final Expense” is not a term consumers generally use, and the more common “burial insurance” or “funeral insurance” is not a product with widespread awareness. Agents often have to acquire Life Insurance leads requesting low face amounts, or rely on Cross-selling into Final Expense from other product lines.
Most agents say that a sufficient flow of “Leads” are the key to selling Final Expense. Indeed, one FMO estimates that 90% of Final Expense Face-to-Face meetings should result in a sale. The product is quick to sell (less than an hour per meeting). The application is simple and most people qualify first-day with no medical exams or doctors’ records required.
In the absence of sufficient leads, Final Expense producers can use Cross-Selling as a strategy. Our survey tells us that agents primarily cross-sell Final Expense from Medicare Supplement/Advantage, or other Life. Many agents – about 30%- also cross-sell from Under-65 Individual/Family Health Insurance. Much smaller numbers of agents say they cross-sell from P&C or non-insurance or non-financial products.
We had a lot of fun reading the agent’s suggestions about “What is the KEY to selling Final Expense”, and we have included these UNEDITED agent suggestions at the end of our survey results document. Leads seem to be the key- but the more experienced agents also have some useful nuggets to share with the newer agents.
If you would like a copy of the survey results and producers’ suggestions about the KEY to selling final expense, please email me at Mark@SIMA-net.com.
If you want to focus on Final Expense – don’t forget the industry’s premier Final Expense Quoting tool – FEX Quotes! For a limited time, you can try it for free – visitFEXQuotes.com to sign up for your Trial Account.