(upbeat music)
- Did you know that term insurance
doesn't have to be a commodity?
Hi, I'm Randy Pierson, vice president
of Life and Annuities at Gordon Marketing.
And I've got one of our RVPs here, Ray Parman.
And today, we're gonna be talking about term insurance
and one of my favorite carriers
and why term insurance doesn't have to be a commodity.
So stay tuned.
(upbeat music)
All right, Ray.
So term sales,
we do a lot of term sales at Gordon Marketing.
A ton of cases on a weekly, monthly, annual basis.
And I'm quite confident
that most of the agents out there selling term insurance,
firmly believe that,
"Hey, it's just price per death benefit," right?
So today we're gonna be talking about
why it doesn't have to be a commodity sale.
And we're also gonna be talking about
one of my favorite carriers, North American.
So tell me a little bit about that.
What's the concept here?
What is the point we're trying to make?
- Yeah, absolutely, so as you just stated
price wins oftentimes in the term game,
and what we're challenging folks to do
and encouraging agents to differentiate themselves
in the market,
is perhaps offer a more value-feature-rich term product.
And that's going to not only help add value
to the conversation that they're having with their clients
but it's also going to set them up
for future sales as well.
- Yeah, it's funny because, value-rich, terms like that
are oftentimes not synonymous in the agent's mind
with term insurance, right?
They think about price and death benefit,
and that's pretty much it.
As it relates to North American,
what are some of the features and benefits
of their term insurance products
that make them stand out amongst the pack?
- Yeah, so I, to use a word called "de-commoditize,"
North American brings to the table
a couple features that I look for,
that I'm attracted to,
and I think other people should be as well.
And that's, one, living benefits.
They have a critical illness, a chronic illness,
and a terminal illness feature
that comes with their term and permanent policies
with no extra charge.
On top of that,
the other critical factor that I look for
is a term product that has conversion privileges
to any of the permanent products
that they might have available at that time.
So I think those two elements,
the living benefits, then the convertibility options
are critical to the value - - Excellent.
- That's brought to the table.
- Excellent, so, you mentioned chronic illness
and it seems like almost on a weekly basis,
I come across an agent, an advisor out in the field,
that isn't very familiar with
what chronic illness benefits on a life policy really are.
What has to happen to a consumer for them to be eligible
to receive benefits under a chronic illness rider?
- Yeah, absolutely.
I kind of equate that to a type of situation
somebody would find themselves that requires long-term care.
So something from extreme Alzheimer's dementia
to anything that would preclude somebody
from being able to perform
two of the six activities of daily living
are kind of what we're looking for
with a chronic illness rider.
- Absolutely, so literally just with a diagnosis
from their doctor of something like Alzheimer's
would make them eligible for benefits.
- Correct, and North American can accelerate
up to 90% of the death benefit
for that type of claim. - Wow, excellent.
And so it's an acceleration of the death benefits
and is that benefit received
by the consumer taxable or tax-free?
- It's tax-free.
- Wow, fantastic. - Yep.
- So you mentioned something a moment ago
which is a hot button item for me
and that is conversion.
So I firmly believe,
that a lot of advisors and agents out in the field
aren't familiar with convertible term,
what that means and how it works.
Can you describe that for the agents real quick?
- Yeah, absolutely.
Conversion privileges is basically the opportunity
to convert to any permanent whole life product.
And in this case, North American specifically,
and there's other carriers out there
that offer similar options,
but any guaranteed UL, any index universal life
the whole book is open to somebody to convert into.
- Yeah, and most notably without any underwriting,
Right? - Correct.
So you don't, so the client doesn't have to get stuck
with a needle, pee in a bottle, go through the rigmarole
of qualifying for that coverage again.
That's a huge benefit.
- Yeah. - Right,
that's a huge benefit.
- And you as the agent receive full first-year commission
on that conversion as well.
- So staying on the subject of conversion,
when would an agent want to bring up
this issue of conversion or convertibility?
- Absolutely, I encourage agents 100% of the time
to bring it up at the term sale.
If you wait a week after that term policy's issued,
a year, six months, it doesn't matter.
You're gonna lose that opportunity.
You have to establish that dialog that day
that you sell the term policy
and set the table, set the expectations
that this is gonna be an ongoing conversation
for either full conversion or even partial conversion too
as that client progresses through their term policy.
- Yeah, absolutely.
In essence you're teeing up that future sale.
I like to say that for those of us that are in the business,
out actively selling or have been in the business
for a while and have an inventory of term sales
that they've made in the past,
those are future sales waiting to happen, right?
I mean, that's a huge missed opportunity
for agents that aren't addressing that.
And speaking of missed opportunity,
what's one of the biggest reasons
that an agent might want to do a term conversion?
- Just the commission.
- The commission! - Yeah!
- That's a new commissionable event,
right? - Yes.
- I mean, the agent's gonna get paid.
So last but not least, let's talk a little bit
about North American
and their term insurance and competitiveness.
Where do they typically rank in that term sale market?
- Yeah, so, North American is not the price leader often.
However, on average, they're are about only
four to $8 a month more expensive than the price leaders
in the term insurance game.
So again, I mean, we're looking at a month,
so if somebody can give up one Starbucks coffee,
they can have a term product
that's going to bring so much more value to their lives
and open up so many different opportunities
where just beyond the death benefit
this product can be repurposed
to critical or chronic illness
as well as future opportunities
to convert into permanent life insurance.
- And I couldn't, I can't emphasize enough
the point that you just made
in that it's not always about price.
Two, three, four, eight bucks a month
is a drop in the bucket
when you're buying an eight-plus rated carrier,
been around forever,
has fantastic additional ancillary benefits, right?
Pays great compensation, easy to work with, right?
So it's, and I can tell you this certainly,
because I see the cases come through the door
and I talk to the agents,
a lot of those carriers out there
that are the cheapest in the term space,
don't have conversion options
or don't have products to convert to
and are much more difficult to work with.
- I agree.
- So, listen, we've reached the extent of our time today
but I want to thank Ray for participating with us today
on this episode of "Selling Life & Annuities."
I will say if you're an agent out there
and you wanna expand your life insurance knowledge
and increase your sales
and get into markets and sales opportunities
that you really hadn't considered
or perhaps don't even know about,
please reach out to us or any member of our team.
And we're here to help.
Once again, I'm Randy Pierson, saying,
"Thanks for watching this episode of
"Selling Life & Annuities."
Click like and subscribe down at the bottom of this video
and we'll see you next Tuesday.
(upbeat music)