What Do You Do?

You are an insurance agent and proud of the profession you have chosen.

By Marvin H. Feldman, CLU, ChFC

How many times have you been asked,“What do you do?”

Do you answer: “I am a financial advisor,” “a financial consultant,” “a financial planner” or, just maybe, “an insurance agent?” Good grief! An insurance agent? Why would anyone want to be an insurance agent?

Allow me to share some reasons why you should be proud to be an agent. We sell money. We create money where none existed before. We create dollars for future delivery, dollars for pennies apiece.

With just a piece of paper and a drop of ink we can create more money for more people than any other person in any other industry. For a 40-year-old male nonsmoker, you collect a $1,000 annual premium for a $100,000 permanent life insurance policy. That’s 1 percent of the face amount. Where else can you buy money for 1 percent per year? Just relate the premium to the face amount to determine the cost per dollar. At age 60 the cost is still less than 3 percent per year. What we create is magic. It is security, dignity, peace of mind. When the client dies, we are the only ones who bring money to the family or company.

But to create this magic, you must believe in your products. You must own life insurance to sell it, and you must own an amount appropriate to cover your human life value.

The federal government after 9/11 determined that the average person who died in the attack on the World Trade Towers had an HLV equal to 15 times his annual earnings. Are you insured for 15 or 20 times your annual income? If not, why not? If someone offered to pay you in cash the amount you have your life insured for and said you would now work for him for the rest of your life with no additional income, would you take the offer? If you answered no, you are under-insured and are your own best prospect for a new large block of life insurance.

Selling value
One of the best ways to market life insurance is to sell packages. Here are some examples to present to your clients and prospects.

• Gift programs for children and grandchildren.
• Policies to prepay inheritance taxes at a discount. Estate taxes are not going to go away. They have been enacted, repealed or modified nine times.
• Term insurance. It’s your inventory of future business.
• Salary-continuation programs for owners and key individuals in businesses.
• Supplemental life-insurance retirement plans. These are great tools for an individual who wants to enhance his retirement program.
• Partnership plans. When one partner dies, you bring in the cash from the life insurance proceeds to buy out the deceased partner’s share.
• Programs to “put you on the payroll.” This is a way for the owner of a company to put in perspective the premium on the policy relative to the benefit to be received. Here is how it works:

Ask the owner of the company what the secretary or one of the people working in the plant is making. Let’s assume a salary of $25,000. Let’s further assume you have presented a $1 million policy with a premium of $25,000 per year. Ask the business owner if he were to hire one more secretary or plant worker if it would make any significant difference to the company. Probably not. But if he “puts you on the payroll” for $25,000 per year, the day the insured owner or keyperson dies, you will bring into the company $1 million income tax-free dollars. What would it take for the company to earn another $1 million net after tax? You may become the most valuable employee on the payroll.

Marvin H. Feldman, CLU, ChFC, served as the 2002 president of MDRT and has been chairman of the Top of the Table. A member of MDRT since 1975 and of NAIFA since 1967, he is the recipient of the MDRT Foundation’s Circle of Life award. A member of the Mahoning Valley AIFA, his address is The Feldman Agency, Fremar Building, P.O. Box 30, East Liverpool, OH 43920.