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Life Insurance Agent’s Career

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Career as a Life Insurance Agent

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Life Insurance Agent’s Career

  1. 1. The Career as a Life Insurance Agent
  2. 2. In all my relations with my clients, I pledge to observe the following Rule of Professional Conduct “I shall, in the light of all circumstances surrounding my client, make every effort to ascertain and understand, give him that service which, had I been in the same circumstances, I would have applied to myself.” 2
  3. 3. You created incomes where none could have existed... You created solvency where there should have been bankruptcy... You created education where there would have been ignorance... You created comfort where there would have been suffering... You created peace of mind where there would have been despair... You created independence where there would have been dependence... You created profit where there would have been loss... You created smiles where there would have been tears... Do you know how many masterpieces you have already created ? With the power of conviction as your ally, you can go on creating masterpieces your whole life through. There is no ending to creation. - Paul Speicher 3
  4. 4. This article is the text of a sermon broadcast in Great Britain by Dr. J.L. Hugson of Glasgow, England- The Review, December, 1974 I am not an insurance agent but there are things I ought to tell you about insurance. Every time a young man comes to me at the marriage altar, I feel like telling him he ought to give his bride a substantial life insurance policy. You have no right to take a girl from a position where she may be earning her own living and tie her down to a family that would make it difficult for her to earn a livelihood again... unless you give her some protection and security... if anything should happen to you. Before you buy her a car, you will need more insurance- all the more in these days of highway fatalities. Get her a policy that will protect her before you even buy her a piano. Put first things first and let the other things come along as you can afford them. There are two exigencies of life that should be met by every man to the limit of his ability. One is the protection for his old age, if he should live. Modern life insurance provides for these exigencies with its death claims and its annuity programs. In your weekly or monthly budget, you can put in a few shillings for insurance as one of the necessities of life; just as you would save for the coal bill or the winter overcoat. A bit of foresight, a bit of planning will do it; and the money that would have gone for something else, we can do without, will have been saved for this supreme necessity. I know why I urge you this. It is my duty as a minister to stand by the flower-decked altar and also the flower-covered coffin; to play my part in the setting up of the home in the hour when it is broken. In the days that follows, I see the difference between the widowed mother who was left penniless, and the mother who is helped, through the hardest years, by the proceeds of a life insurance policy; between the home where the children must be left alone or to the care of others while the mother goes out and earns a living; between the children who grew up as best as they can and the children that don't... and the juvenile courts know the difference, too. The Lord may provide, but it may be a washtub for your wife to sweat over a room in a dingy tenement, or for your children to live in; or public charity to support your family. God does not put a premium on your thoughtlessness nor neglect. If you could provide for them not but did your best, you may trust them to the Lord who said: “Leave thy fatherless children and I will preserve them.” But if you could provide for them but did not, you may slip out but your children will pay the price. Thus, if I could not be a minister, I would want to be a an insurance agent from the standpoint of the good things I can do. The minister cannot always save the fatherless and the widow from loneliness and sorrow but the life insurance man can rescue them from poverty and need... and lift the fear in their lives. 4
  5. 5. A Challenge Give me work to do, a job that I can call my own, where I can both lose myself and find myself in the daily job of doing it, where my hands will not be tied nor my talents cramped, and where I can breathe the pure, sweet air that is my birthright. Give me a job whose opportunities reach outward and upward to the blue skies above, where I will never know confining boundaries or limited horizons. Give me work to do among my fellowmen, where I can feel at the setting of the sun that I have eased the load on my brother's shoulders, that I have brought peace and quiet to fearful hearts. Give me work to do, a job where I can be glad of life because it gives me the chance to love and to work and to play and to look up at the stars; to be satisfied with my possessions, but not content with myself until I have made the most of them; to think seldom of my enemies, often of my friends, and every day of my opportunity to serve. And at last, give me the courage to do the job well for only in doing so can I expect to find my own untarnished happiness. - PAUL SPEICHER 5
  6. 6. The Psalm and the Shepherd On Having the Life Insurance Business Inside You 6 An old, old story comes to mind. It is one I heard long, long ago and then forgot and now remember. The story concerns a party honoring a great actor. During the evening at a friend’s house, the actor obligingly recited excerpts from the plays in which he had appeared. Feeling that a change of pace would be in order, he suddenly began the familiar lines of the Twenty- Third Psalm, “The Lord is my Shepherd.” As was to be expected, the recitation was a beautiful piece of elocution, and at the finish, a storm of applause arose. Then a devout old man ‘who for decades lived close near the Shepherd,’ asked if he might recite the same psalm. Now, there was no elocution, but with closed eyes, the old man moved from verse to verse. A deep quiet settled into the room. When he had finished, there was no applause and good-byes were quietly spoken. As the actor said goodbye to the old man, he whispered in his ear- “I know the Psalm but you know the Shepherd. That makes the difference.” So there are agents who are extremely professional. They know the words of their sales talk, the strategy, the techniques, and they put on a good show in the interview. But how much more real would this show we call the interview be if the agent knows Life Insurance as well as the words of Life Insurance. Then the interview would not just be an act but an “emotional experience,” and men would buy because an “earnestness” of the agent impels them to do so. I know one agent, now dead, who knew Life Insurance as well as the words of Life Insurance and who was not afraid to place directly an issue before the prospect. After an unusually serious interview, a prospect said to him: “Go away, you make my life miserable.” “Good,” replied the agent, “when you are tired of feeling miserable, call me up and we’ll take care of the problem.” When you know the power of Life Insurance as well as you know its provisions, that’s the kind of interviews you will have. Then not only will be in the Life Insurance business, you will have the Life Insurance business inside you, and as the actor said to the old man, “That makes the difference.” - Paul Speicher
  7. 7. You are not a professional man like a doctor, and yet you probably have kept more souls and bodies together than many and many a doctor; You are no great musician. No greater symphony of yours holds thousands with its charms. But you have made old age, a symphony for thousands of men and women; You never won the Pulitzer Prize for the best novel of the year. Yet you have given many happy endings to thousands of real life stories as lived by real men and women; You never preached a sermon that saved a soul. But the contracts you have written have saved thousands of children from the delinquency which so often is associated with poverty; You have never accumulated a fortune which you will leave to some great charity, but you have helped thousands of persons to master their financial problems that charity is unnecessary; You work with imperishable materials. The song and the story, the rhythm and the ebb of life is in your business, and underneath the clauses of the contracts you write is the singing heart of financial safety, financial contentment, financial happiness. -INSURANCE SALES MAGAZINE What Kind of Work Do You Do, Mr./Ms. Life Underwriter? 7
  8. 8. I SELL INTANGIBLES I sell rocking chairs for little old ladies. I sell dolls and doll clothes for Daddy's little girl. I sell little red wagons for Daddy's little boy. I sell an income for widows and orphans. I sell milk for babies. I sell homes where flowers bloom in the front yard and children play in the backyard. I sell roofs, fuel, oil, heat, light and power. I sell college educations. I sell golf clubs, fishing, tackle, trips to the garden spots of the world. I sell happiness and security to the families of my friends and acquaintances. I sell self-respect to old men, but I sell to them when they are young. It's all right when a son, age 10, says to Dad, “Give me a dollar, will you, Pop?” They both smile. But when Dad, aged 70, says to son, age 40, “Son can you lend me $10 to pay my bills?” ... then, nobody smiles. A life insurance policy doesn't run on wheels. You can't eat it, or wear it, and you don't show it off to the neighbors. But it is the most “intangible” form of economic security yet devised by man. Many think of life insurance as something intangible. They think they cannot sell intangibles. Neither can I. I operate under the greatest notions counter known to the mercantile industry. 8
  9. 9. Policyholder Service may sound like a dull, uninteresting subject to the newer agent struggling to make a start in the business. He’s too busy prospecting and setting sales interviews to delve too deeply into that thing called “service.” Besides, he is running against time to learn more about the various policies; their provisions; approaches to prospects; polishing his sales presentations, and trying to organize his time and how to work more effectively. All is not dark futility and frustration. Early in his career, he should see a light at the end of the tunnel. The sooner he envisions himself as building a clientele, the better. Selling on a hit or miss basis can lead to failure. Successful careers are built with clients and here are some of our thoughts on that. The Client Builder makes it easy for his policyholders to buy from him. He keeps his name, address and telephone number in front of his policyholders through the use of calendars, birthday cards, other periodic mailings and on the portfolio that contains his policyholder's life insurance policies. The Client Builder recognizes that many people have a limited concept of their true financial value. A man, age 35, who has an income of $30,000 a year and never makes anything more, will earn $1,050,000 before age of retirement. A $50,000 a year man, age 40, will be receiving at least $1,250,000 before he reaches age 65. And a $100,00 a year man, age 50, will earn at least $1,500,000 by the time he become age 65. That’s lot of money and earning power must be protected by life insurance. The Client Builder will raise his policyholders’ sights to their true values. He will help them visualize their financial future and give them a goal to shoot for. He will show them how they can be financially sound. From the moment he sells them or a new buyer, he starts his clients looking forwards the day when they can gain financial stability through life insurance. The Client Builder works with a pattern to keep his competitors from “cutting-in.” He tries to set for each of these policyholders a schedule for future purchases. He may suggest that a client plan to use his next raise or an upcoming promotion to start an educational plan for his children or a year from now, a certain client should buy additional retirement income insurance. With the seeds of future sales already planted, there is a less chance that a policyholder will buy from an “outside agent.” The Client Builder also realizes that his own insurance program must be adequate before he recommends that his policyholders purchase more. When he increases his own insurance, his sales production will also increase. Knowing what his own life insurance will do for his family, he can readily see what life insurance will and can do for their families. He can sell with conviction. The Client Builder has no prospecting problems. He virtually works primarily with and through his policyholders and centers-of-influence. He works on mostly referred leads. His prospects are well qualified. He also realize the importance of keeping his center-of-influence informed as to his general progress and results. The Client Builder knows that, assuming 300 working days a year, that if he calls on one policyholder each day, he can call on a minimum of 300 clients a year. Many of the visits will be brief, it need not be time wasted. Some policyowners will from time to time drop hints about themselves or friends which can lead to other sales. New business from policyholders at many times is there for the taking. It will be missed by the “hit and run” agent. But the Client Builder conducts his business with such foresight that virtually every time he makes sales, he paves his way for future sales. POLICYHOLDER SERVICE IS HIS BREAD AND BUTTER. 9
  10. 10. The Life Insurance Agent If Doctors Save Lives, You Save Families 10
  11. 11. As nature is studied and subdued, and as society is developed, the element of chance is slowly eliminated from life. In a progressive society, education, science, invention, the arts of production, with regular government and civil order, steadily working together to narrow the realm of chance and to extend that of foresight. But after they have done their best to conquer the forces of nature and regulate human passions, so that achievement shall follow purpose with uniformity, there remain certain events which may disturb all anticipations, and in spite of any man's best wisdom and effort may deprive him of the fruits of his labor. These are mainly two: (1) damage to property and (2) premature death. The direct contribution of insurance to civilization is made, not in visible wealth, but in the intangible and immeasurable forces of character on which civilization itself is founded. It has done more than all the gifts of impulsive charity to foster the sense of brotherhood and of common interests. It is impossible to conceive of civilization in its full vigor and progressive power without this fundamental law of practical economy, that he best serves humanity who serves himself, with the golden rule of religion, “Bear Ye Another One's Burdens.” - Programming and Related Markets, Research & Review Service of America In summing up the Service of Life Insurance to Individual and National Well-Being, we cannot do better than to present the following two paragraphs from the article on insurance which appears in the Encyclopedia Britannica: 11
  12. 12. Individual & National Well-Being There is a close relationship between the citizen and the state so far as well-being is concerned. The two are sides of the same coin. National well-being springs from individual well-being. It can have no other source. For either a man is a national asset or he is a national liability. At a given moment, he cannot be both asset and liability. To the extent, therefore, to which life insurance protects individual well-being, it increases national well-being. Protecting the Middle Class Life insurance is the favorite investment of our great middle class and it is well that it should be so. For it is our middle class, sufficiently wealthy to maintain a comfortable standard of living, sufficiently poor to require conservatism in Its manner of living, which constitutes the heart of our nation. The first objective of every dictator is to destroy the middle class, reducing it to the poverty level, so that the next step toward abject slavery may be the more easily taken. When a family drops from the middle-class group to the poverty-stricken group, the chances are that for at least one generation the family will not be able to climb again to the middle-class level. Every family which life insurance rescues from this fate, enabling it to remain upon the middle-class level, strengthens the greatest resource of the nation. Research & Review Service of America 12
  13. 13. WHY HAVE LIFE INSURANCE ? The answer to the question, “Do I Need Life Insurance?” depends on your answers to two more questions. The first is, “In the event of my death, will anyone experience an economic loss?” If the answer to that question is yes, someone will suffer an economic loss, then you are ready for the next question: “Do You Care?” If you do not, then you have determined that you do not need life insurance. However, if you do care, then you do need life insurance. Life Insurance guarantees that the person who will take an economic loss in the event of your death will be indemnified for that loss. Replacing human life value is the primary purpose of life insurance, and that is what is totally unique about this product. No other contract or property that you can buy will do what a life insurance contract will do for your beneficiaries. -Ben G. Baldwin The Complete Book of Insurance Probos Publishing Company, 198913
  14. 14. Life Insurance is a means of providing security for one's dependents and one's self. When a person's application for life insurance is accepted by the life insurance company, he pays the premium and receives a policy. That policy is a contract whereby the insurance company promises to pay one's beneficiaries or the insured himself or herself, according to the agreement and/or conditions as stated in the policy, a sum of money either upon the occurrence of some specified event or at some definite date in the future. In the beginning, life insurance was thought of- only as money for the dependents at the death of the insured. This, of course, is still its main purpose. However, there are various other uses for it today that makes the service of life insurance is much broader. Life insurance, is now bought not so much because people die but, rather, because incomes die. Income may stop because people may die too soon, or, on the other hand, may live too long past the time they are able to work. Life insurance affords protection in either event. It can be used as a reserve against emergencies arising in life, as well as emergencies resulting from death. Men and women now buy life insurance not only because they expect to die, but because they expect someone to live, themselves included. Research & Review Service of America 14
  15. 15. WHY DO PEOPLE BUY LIFE INSURANCE? People buy Life Insurance NOT because they will die BUT because their incomes die. 15
  16. 16.  is the hostage which a man gives to a selfish world for the security of himself and his family.  is the bond a man gives that when he dies, he will not be a defaulter.  is the supplement a wise man adds to his marriage vow- it goes further than “until death do us part.” 16
  17. 17.  I am a piece of paper, but even more.  I am an idea.  I am a promise.  I helped men see visions, dream dreams, and achieve economic immortality.  I am education for children.  I am savings.  I am also a property that increases in value from year to year.  I lend money when you need it most with no questions asked.  I pay off mortgages so that families can remain together in their own homes.  I assure fathers the daring to live and the moral right to die.  I create, manage, and distribute property.  I am the great emancipator from want.  I guarantee the continuity of business.  I protect the jobs of employees.  I conserve the employer's investments.  I am the intangible evidence that a man is a good husband and father.  I am a declaration of financial independence, a character of economic freedom.  I am the difference between an old man and an elderly gentleman.  I provide cash if illness, injury, old age, or death cuts off the breadwinner's income.  I am the only thing that fathers can buy on the installment plan that mothers don't have to finish paying for.  I am a certificate of character and evidence of good citizenship, an unimpeachable title to the right of self-  government.  I am protected by laws that prevents creditors from assessing the money I give to your loved ones.  I bring dignity, peace of mind and security to the later years of life.  I supply investment capital that makes smoke go up chimneys, the wheels turn, and the motors hum.  I guarantee that there will always be Christmas, with tinsel, a happy fireside and the laughter of children  even though father is not there.  I am the guardian angel of the home. I AM YOUR LIFE INSURANCE POLICY17
  18. 18.  People buy because of their own reasons not ours  People buy our products not because they understand the product but because they feel we understand them Larry Wilson in his book, “Counselor Selling” 18
  19. 19. “The most common purchase of life insurance is... to cushion a family financially if the primary wage earner dies prematurely. In short, Life Insurance is a security blanket- something to replace your pay check and to wrap around your dependents when you die.” - Leonard Sloane, The New York Times Book of Personal Finance, New York: Times Books, 1985, Page 96. Life Insurance the "hostage" which a man gives to a selfish world for security of himself and his family." 19
  20. 20. 20
  21. 21. I Am Your Life Insurance Policy You and I have similar purposes in this world. It is your job to provide food, clothing, shelter, schooling, medicine, and other things for your loved ones. You do this while I lie in your strong box. I have faith and trust in you. Out of your earnings will come the cost of my upkeep. At times, I may appear to be worthless to you - but some day (and who knows WHEN), you and I will change places. When you are laid to rest, I will come alive and do your job. I will provide the food, clothing, shelter, schooling, medicine, and other things your family will continue to need - just as you are doing now. When your work and toil are done, mine will begin. Through me, your hands will carry on. Whenever you feel the price you are paying for my upkeep is burdensome, remember that I will do more for you and your family than you ever can do for me. If you do your part, I will do mine. Sincerely, Your Life Insurance Policy 21
  22. 22. Each Day We Head to Work to Earn Money for… Food Taxes Clothing Recreation Shelter Savings and many other things…. 22
  24. 24. Don't Make Them Pay for Your Life Insurance It is a funny thing about life insurance. It has to be paid for, whether or not... it is bought. If you buy the life insurance your family needs, then you pay for it out of current income. You spend less here and a little less there. You do a little better job of budgeting, of watching out for unnecessary expenditure. But, if you don't pay for the life insurance out of the money in your pocket today, then your family may have to pay for it someday. You say: “But how will they pay for it?" The answer is that “they have to pay for it- out of the things they do without- the opportunities they do not enjoy; the school they are unable to attend; the home from which they are forced to leave; the sense of security they do not possess; a mother's attention which is not theirs because she must work to live and so that they may live.” Ask yourself this question: “Who pays the biggest price for life insurance, I or my children?” Then, act in accordance with your answer. 24
  25. 25. WHAT DOES A LAPSED POLICY MEAN TO WIDOWS AND ORPHANS I Am Useless because… I AM A "LAPSED" POLICY Once I was the abiding place of faith, hope, and security. I throbbed with life and power. Potentially, I was food, clothing, and shelter. I pulsated with strength and vitality. I had the power to save homes, to discharge debts, to educate children; to provide comforts and the luxury of life. I was the instrument which made the uncertain, certain. I was an asset.... a piece of parchment paper convertible to an estate in the twinkling of an eye. Then, he whose life I insured was gone. The time of accounts descended upon the widow, and I was uncovered from the dust in the drawer. I heard the widow's gasp of surprise. I heard her heartrending sob of anguish. I heard her cry of disappointment. Her hope ended in despair. Her security forsook her. Her protection was gone. Yes, I am a “lapsed” policy. My life and power are gone. I can save no homes. I can discharge no debts. I can educate no children. I can provide no comforts, no luxuries. I am no asset; no estate. I am tragedy, sorrow, a mockery... I AM A “LAPSED” POLICY. - Source Unknown 25
  26. 26. 26 If every wife knew what every widow knows, LIFE INSURANCE... would never have to be sold.
  27. 27. Why Life Insurance on the Wife  To help pay off the mortgage  To offset the extra estate tax  To pay the cost of last illness  To provide a charitable bequest  To provide a "housekeeper fund“  To provide a dowry for the daughter  To pay for her last expenses in old age  To help with the children's education  To supplement her husband's retirement income  To help a son or a daughter in the first, low-income years of marriage  To supplement Social Security old age income if her husband dies first  To supplement Social Security after her husband retires until payments begin when she's 62  To provide cash for a trip she'd like to take when the children are grown  To continue retirement income if husband's funds runs out at his death  To give a son or a daughter a memorable wedding  To offset loss of income tax savings  To do something for grandchildren  To help her husband retire earlier  To give a son or daughter a start in business  To provide a safe investment 27
  28. 28. Dignity in Old Age A Story from Life Men are usually protected from a total loss of nobleness by the propensity of females to outlive males. Few men are forced to live with relatives- for their women bury them. But when a man is compelled to move in with a child, it seems more degrading for him than for a woman. Maintaining dignity in a son's house or a son-in-law's domain is very tough for a man who has been a breadwinner for a lifetime, but sometimes... it is necessary. There was once an old man who spent half each year with each of his two children, a son and a daughter. The young people had their own families. Bathroom space was at a premium, and there was usually a second occupant in Grand Pop's room. He had enough from Social Security to pay for his food and clothing plus gifts for the grandchildren from time to time, but his level of life -- overall, was excess baggage at best. Daily, he dressed to the hilt, tie and all, in an effort to reflect past glory and to conjure up personal nobility in the here and now. Change over time from one house to the other was never pleasant. Twice a year, one household rejoiced in its new found freedom from the old man, and the second shuddered at the prospect of having him as an unwanted guest for six months. To say that love did not exist would be falsehood, for had there not been much love, neither family would have given Grand Pop the time of day. Love existed alright, but it was being eaten into by the need of the man to live with his lovers. His enthusiasm for life was eroded by the strained situation which peaked in unpleasantness at change-over time. January 1st and July 1st were bad days. Finally, he decided to play his trump card in his fight for status. He owned a $160,000 paid-up life insurance contract which neither child knew about, and he arranged its provisions to take some frustration out of his life. He wrought a miracle in the attitudes of the families toward him by setting the beneficiary clause as follows and telling them about it: Primary Beneficiary: My child whom I am living with when I die Secondary Beneficiary: My other child Special Arrangement: If either of my children die before I die, and I am living with his or her spouse at the time of my death, the spouse of my deceased child is to be considered my primary beneficiary. Furthermore, if both my children die before me, the spouse of the one I am living with is my primary beneficiary. The old man's stock shot up like IBM in the old days. Attitudes on change-over day reversed instantly. One family hated with passion to see him go, and the other could hardly wait to receive him. Money had everything to do with that gentleman's degree of nobleness, but he had to bargain with his loved ones to preserve his status as a person of worth. Charles Murray in his book, “Don't Talk To Me About Death,”1977 “The heaviest burden an old person can carry is an empty wallet!”28
  29. 29. Friends Are Like Life Insurance They build up valuable reserves for you. They pay off when you least expect them to. They help you when you need them most. Their cost is low. They're renewable and sometimes have the loan privilege. They're for the whole of life. Some are substandard. The longer you keep them, the more value they have. You generally get back more than you put into them. They give you a steady income of smiles. They're endowed with patience and understanding. They make wonderful beneficiaries for your family. Friendships end when you cash in on them. - Author Unknown29
  30. 30. 30
  31. 31. Training 31
  32. 32. The Bicycle Analogy The Company's Training Program with the assistance you should expect to receive from members of your Management Team plus your own personal efforts will definitely assure you of achieving and maintaining this balance. All these will make you become the professional life underwriter you want to be. Training to become a professional life insurance underwriter involves intensive human relationship skills development in addition to the technical training and skill required. As you will soon see, these two areas are interrelated. To provide you with a clearer view, think of your training in terms of a bicycle. The “rear wheel” of the bicycle provides the power. It represents product skills and the technical knowledge of the life insurance business- the power you need for your career. The “front wheel” of the bicycle provides you the direction. It represents people skills and a real understanding of human behavior- the directing aspect of your career. In order to function properly, the bicycle's wheels must be balanced... the rear wheel must be in tune with the front wheel. 32
  33. 33. Training Formula 33
  34. 34. Sales Success Requirements 34
  35. 35. CONSCIOUS INCOMPETENT “He Knows That He Knows Not” UNCONSCIOUS INCOMPETENT “He Knows Not That He Knows Not” UNCONSCIOUS COMPETENT “He Knows Not That He Knows” CONSCIOUS COMPETENT “He Knows That He Knows” Stages of Skill Learning 35
  36. 36. Stages of Skill Learning CONSCIOUS COMPETENT “He who knows and knows that he knows, is wise, follow him.” UNCONSCIOUS INCOMPETENT “He who knows not and knows not he knows, is a fool, shun him.” CONSCIOUS INCOMPETENT “He who knows not and knows he knows not, is simple, teach him.” UNCONSCIOUS COMPETENT “He who knows and knows not he knows, is asleep, wake him.” 36
  37. 37. Give them fish and they will eat for a day. Teach them “how to fish,” and they will always have food to last a lifetime. 37
  38. 38. Five Qualities of a Professional 38
  39. 39. Food for Thought He who ceases to study will soon cease to think; He who ceases to think will soon cease to grow; He who ceases to grow will soon begin to retrograde; He who retrogrades will cease to enthuse; He who ceases to enthuse about his life work will cease to love it; He who ceases to love his work is in an unholy mess Dr. Solomon Huebner Professor Emeritus of Insurance Wharton School of Finance 39
  40. 40. Two men cut wood all day long. One worked straight through, without stopping to rest. At the end of the day, he had a sizable pile of logs. The other would chop for 50 minutes and then take a ten-minute break. At the end of the day, he had a much larger pile. “How could you chop more?” asked the man who'd worked continuously. His friend replied: “When I stop for rest, I also sharpened my ax.” Make Time for Continuing Education 40
  41. 41. “If you’re sitting on your ‘laurel,’ you're wearing it at the wrong end.” - Frank Bettger WHEN YOU GETTING BETTER, YOU BEING GOOD Remember... 41
  44. 44. How Proper Planning Should Work 44 GATHERING Facts and Objectives Your Estate Planning Team Accountant, Attorney, Life Underwriter, Trust Officer, Financial Consultant ANALYZING Information IMPLEMENTATION of Your Plan
  45. 45. Financial Planning Process  Examine where you are now and where you want to be financially  Gather information and present resources that can be used to meet your goals  Analyze the information gathered  Propose appropriate solutions to meet your priorities and objectives  Ask you to take action to meet your goals  Continuously evaluate your situation as your needs change FINANCIAL INDEPENDENCE 45
  46. 46. D.O.M.E. PLANNING FORMULA Where Am I Now? Where Do I Want to Go? How Do I Get There? How Am I Doing? 46
  47. 47. ATTITUDE COMMANDMENTS  It is attitude, not aptitude, that governs altitude.  The purpose of existence is not to make a living, but to make a life.  A negative thought is a down-payment on an obligation to fail.  You will seldom experience regret for anything you've done. It's what you don't do that will torment you.  Complaining is the refuge of those who have no self-reliance.  The ultimate cost of something is that amount of life that you will exchange for it.  Youth is not a time of life, but a state of mind. Wrinkles test the skin, but never touch the soul.  People who have not set a worthwhile purpose in life are easy prey for anxiety.  The worst bankruptcy is the person who has lost enthusiasm.  Nobody can make you feel inferior without your consent. from “Another Pocketful of Lists,” a LIMRA Publication - Elmer Leterman47
  48. 48. How do you develop Positive Attitudes on the job? While Talent is important and Knowledge is essential, the most important Key to Success is your State of Mind! DEPENDABILITY is a keystone to Success on the job! -- Get to work -- do the job PRIDE in your work- is a basic satisfaction that can be yours in any job. RESPECT right of others- and give credit to others for what they do. CONSIDERATION for others- to help them do their job by not using up their time. KNOWLEDGE is important- the more, the better- from people, books, experience. It helps you grow on the job. ENTHUSIASM fuels progress- The more, the better… even a Smile can help. NEGATIVE POSITIVE There’s no better place to practice the GOLDEN RULE than on the job! What difference does it make if it’s not a perfect job? I’ll do my job the best I can because others depend on me! Here are 6 suggestions… 48
  49. 49. Are You “Average?” “Average” is what the failures claim to be when their families and friends ask them why they are not more successful. “Average” is the top of the bottom, the best of the worst, the bottom of the top, the worst of the best... which one of these are you? “Average” means run-of-the-mill, mediocre, an also-ran, insignificant, a non-entity. Being “Average” is the lazy people's cop-out; it's lacking the guts to take a stand in life; it's living by default. Being “Average” is to take space for no purpose; to take the trip through life but never to pay the fare; to return no interest for God's investment in you. Being “Average” is to pass one's life away with time rather than to pass one's time away with life. It's to kill time rather than to work it to death. To be “Average” is to be forgotten once you pass away from this life. The successful are remember for their contributions, the failure are remembered because they have tried; but the “Average,” the silent majority, is just forgotten. To be “Average” is to commit the greatest crime one can against one's self, humanity and one's God. The saddest epitaph is this... “Here lies the remains of what might have been except for their belief that they were only “Average.” - Edmund Gaudet 49
  50. 50. "The only acceptable quality level, says those who have been charting a course back to competitive excellence, is 100 percent. That's the standard of measurement. The rationale is simple: Set a standard of 95 percent, and people figure they're doing fine if they're at or near it. In the language of the Malcolm Balridge National Quality Award, however, quality is a 'race with no finish line.' There's no time of day or month on the calendar when it's okay to let up. The alternative to setting standards at their highest possible level becomes clear when you look at the consequences of "almost but not quite.” If 99.9% is good enough, then ..." ( Excerpts from A Special Training Report by Natalie Gabel ) Two million documents will be lost by the IRS this year. 811,000 faulty rolls of 35mm film will be loaded this year. 22,000 checks will be deducted from the wrong bank accounts in the next 60 minutes. 1,314 phone call will be misplaced by telecommunication services every minute. 12 babies will be given to the wrong parents each day. 268,500 defective tires will be shipped this year. 14,208 defective personal computers will be shipped this year. 2,200 gallons of coffee assumed to be caffeinated will turn out decaf instead- but consumed nonetheless in just one tax firm during the 1991 season. 103,260 income tax returns will be processed incorrectly this year. 2,488,200 books will be shipped in the next twelve months with the wrong cover. 5,517,200 cases of soft drinks produced in the next twelve months will be flatter than a bad tire. Two plane landings daily at O'Hare International Airport in Chicago will be unsafe. 18,322 pieces of mail will be mishandled in the next hour. 291 pacemaker operations will be performed incorrectly this year. 880,000 credit cards in circulation will turn out to have an incorrect cardholder information on their magnetic strips. $9,690 will be spent today, tomorrow, next Thursday, and every day in the future on defective, often unsafe, sporting equipment. 20,000 incorrect drug prescriptions will be written in the next twelve months. $761,900 will be spent in the next twelve months on tapes and CDs that won't play. 107 incorrect medical procedures will be performed by the end of the day. 315 entries in Webster's Third New International Dictionary of the English Language (unabridged) will turn out to be misspelled. 50
  51. 51. “If You Stop Getting Better, You Stop Being Good!” Good, Better, Best. Don’t You Let It Rest. Until Your Good Becomes Better. And Your Better Becomes Best!51
  52. 52. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “Press On” has solved and always will solve the problems of the human race. - Calvin Coolidge 52
  53. 53. The Ace Salesperson And in those days, behold, there came through the gates of the city, from afar off and it came to pass as the day went by, he sold plenty. And in that city were they that were order takers and they spent their days in adding to the alibi sheets. Mightily were they astonished. They said one to the other, “What the hell; how doth he getteth away with it?” And it came to pass that many were gathered in the back office and a soothsayer came among them. And he was one wise guy. And they spoke and questioned him saying, “How is that this stranger accomplished the impossible?” Whereupon the soothsayer made answer “He of whom you speak is one hustler. He ariseth very early in the morning and goeth forth full of pep. He complaineth not, neither doth he know despair. He is arrayed with purple and fine linen, while ye go forth with pants unpressed.” “While ye gather here and say one to the other, 'Verily this is a terrible day to work; he is already broad. And when the eleventh hour cometh, he needeth no alibis. He knoweth his line and they would stave him off, they give him orders. Men say unto him 'Nay' when he cometh in, yet when he goeth forth, he hath their names on the line that is dotted.“ “He taketh with him two angels, ‘inspiration‘ and ‘perspiration’ and worketh to beat hell. Verily I say unto you, go and do likewise.” - Source Unknown 53
  54. 54. Risk-Taking “Risk must be taken because the greatest hazard in life is to risk nothing. The people who risk nothing, do nothing- have nothing, are nothing. They may avoid sorrow and suffering. But they cannot learn, feel, change, grow, love, live. Chained by attitudes, they are slaves. They have forfeited their freedom. Only a person who take risks is free.” -Tough Times Don’t Last But Tough People Do 54
  55. 55. 55 “If you want to have a place under the sun, you must be prepared to have blisters.”
  56. 56. The word “Risk” came from an Arabic word that means “earning one’s daily bread.” 56
  58. 58. - Guideposts “When I was a boy, my father, a baker, introduced me to the wonders of song,” tenor superstar Luciano Pavarotti relates. “He urged me to work very hard to develop my voice. Arrigo Pola, a professional tenor in my home town of Modena, Italy, took me as a pupil. I also enrolled in a teachers college. Upon graduating, I asked my father, ‘Shall I be a teacher or a singer?’” “Luciano,” my father replied, “if you try to sit on two chairs, you will fall between them. For life, you must choose one chair.” “I chose one. It took me seven years of study and frustration before I made my first professional appearance. It took me another seven years to reach the Metropolitan Opera. And now I think whether it's laying bricks, writing a book- whatever we choose- we should give ourselves to it. Commitment, that's the key. Choose one chair.” An Anecdote About Commitment 58
  59. 59. 59
  60. 60. Managerial Authority and Involvement Personal Independence and Responsibility Manager AgentDIRECT GUIDE NEGOTIATE 0% 100% Career Growth Chart Business Maturity 60
  61. 61. Senior Partner Senior Associate Associate Marketing Associate Team Leader Relationship Manager Tier 1 Focus Relationship Manager, Support Senior Partner Supervises Protégé Marketing Phone Support Production Support Client Service Personal Production Marketing Phone Support Production Support Client Service Personal Production Relationship Manager Learn the Business Limited Time Position Tier 1 Referrals $ $ $  Tier 1 production  Target market & team development  Advisor to management team  Expand overall business base  Develop junior team members  Tier 2 production  Tier 1 fact finder  Build inventory  Develop junior team member  Provide specialized support  Tier 3 production  Build inventory  Develop protégés  Build association relationships  Team support  Mentor support  Day to day marketing program interface and implementation  Ability to close Tier 1 cases  Ability and commitment to lead team strategy  Ability and commitment to develop team skills  Ability to close Tier 2 cases  Ability and commitment to provide major strategy & tactical input to team  Ability and commitment to develop team skills  Ability to close Tier 3 cases  Ability and commitment to direct marketing program for team  Ability to train protégés  Raw senior associate potential  Commitment to training regimen  Ability to absorb and demonstrate the 8 basic habits CAREER GROWTH & DEVELOPMENT $ 61
  62. 62. Doing the exact same things over and over but expecting different results. 62
  63. 63. Follow the Leader or Follow the Follower? Following the example of successful people is a good idea. It avoids the trial— and— error of blazing your own trail. But most people, Nightingale observed, are so hungry for acceptance, they try to be like everyone else. Instead of marching forward, they march in circles, following each other in mindless lockstep and going nowhere. That concept is easy enough to understand. But it’s very hard to do something about it. You can’t overcome a lifetime of knee—jerk responses after only one hearing. But, after repeated hearings, you start to make headway. Another simple concept is that people reflect what you show them. If they see you as being indifferent, they will treat you indifferently. If they see you as expecting the worst, they will behave at their worst. But if they see you as kind and caring, they will treat you with care and kindness. 63
  65. 65. 65
  67. 67. THOUGH BECOMES Steps in the Buying Process 67
  68. 68. From Satisfaction through Comparison to Dissatisfaction (Recognition of a Deficiency) The point is reached at which the urge to satisfy the deficiency through the contemplated purchase becomes an Emotional Necessity 68
  69. 69. From Satisfaction through Comparison to Dissatisfaction (Recognition of a Deficiency) The point is reached at which the urge to satisfy the deficiency through the contemplated purchase becomes an Emotional Necessity But before the purchase is made, the Emotional Desire must be supported by Logic and Reason. The must be Factual Motivation 69
  70. 70. Selling Steps 1. 2. 3. 4. ESTABLISH The General Problem The Specific Problem PRESENT The Solution ANSWER Objections MOTIVATE Lead the Prospect to Take Action 70
  71. 71. Self-Preservation/Fear Love Vanity/Ego Profit An understanding of human motives is important to salespeople because motives tell them what will move a person to action 71
  72. 72. INBORN NEEDS 1 Recognition as an Individual 2 Self- Expression of Feelings/ Objectives 3 Benefits: What’s in It For Me? 4 Security: Am I Doing the Right Thing? An awareness of inborn needs common to all people can help you plan your sales strategy 72
  73. 73. BUYING DECISIONS IN THE CREATIVE SALE Effective Salesmanship helps the prospect make the above buying decisions YES NO 2. Here’s a problem to be solved  3. Life or health insurance is an ideal solution  4 & 5. Now is the time to buy and I can afford it  6 & 7. This is the company and agent I want to deal with  73 1. To grant an interview 
  74. 74. Dr. Abraham Maslow’s Hierarchy of Needs 74
  75. 75. Reach Them Through the Heart! Appealing through the Heart (Emotions) when compared to appealing to the Mind (Logic) will take you a shorter distance in order to reach your prospect’s pocketbook! First appeal to the heart and follow it up with appeal to the mind! 34” 17” Image from Zig Ziglar’s “Secrets of Closing Sakes” 75
  76. 76. Success Triangle 76
  77. 77. 77 Sequential Selling Funnel
  78. 78. The Sales Pipeline* It’s in “Seeing the People” There is not a business going that does not depend on new people to see. Somehow someone must put names into the pipeline so that what comes out the other end are completed missions. Although there are multiple facets to operating any business, the entrepreneurial spirit would mean nothing without new prospects, and these mean less if no contact is made. The success of any business venture can be measured by the percentage of time spent face to face, and this time occurs only when someone asks for the meeting. 78 * from the “Business of Selling,” Allesandra & Cathcart
  79. 79. That’s the job and you’ve got to kiss them Don’t try to substitute You can’t mail them a kiss You can’t stay in the office and wait for them to hop in and kiss you You can’t let advertising change them into princes You can’t ask your secretary to kiss them (he or she hasn’t got the stomach for it) It doesn’t take a lot of smooching to tell a prince from a frog You can’t change kissing styles every 30 days or spend all your time in Kissin’ School You’ve got to spend time with frogs and you’ll find them out there in the marshes Then, when you find one, you got to make contact Kissing is a contact sport -Source Unknown 79 Always Remember the Basic Premise of Any Sales Endeavor: “You’ve Got to Kiss a Lot of Frogs to Meet a Prince.”
  80. 80. One Reason for Sales Slump The vast majority of salespeople experience sales slumps. The one reason why dry spells occur can be understood with the aid of this chart. Let’s say you start a job in January and spent a lot of time in prospecting, in fact, it took 90% of your time that month. Naturally, there is a time lag between your initial contact with your prospect and the confirmation of a sale. This is called the Sales Cycle, and generally, the higher the price, the longer is the sales cycle. As time goes by, sales increase. Your prospecting activities begin to pay off. You become more and more impressed with yourself. You’re making customers happy, your sales manager is thrilled and your bank account looks better all the time. But as your sales increase, you keep decreasing your sales activities because you think “I don’t need to prospect, I’m making sales?” Months later, you enter a dry spell but you can’t figure it out. The answer is simple, you have stopped prospecting. The prospecting groundwork you laid at the beginning of the year has already paid off, and the well of new business is starting to run dry. Sales slumps can be avoided by continually prospecting. One simple truth to remember in this business is that “If you stop planting, you stop reaping.” JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC ProspectingSales 80
  82. 82.  People buy because of their own reasons, not ours.  People buy our products not because they understand the product but because they feel we understand them. Larry Wilson in his book, “Counselor Selling” 82
  83. 83. 83
  84. 84. A Story from Life I CAN'T SAVE NOW ! I'm just getting started in life. I don't make a lot yet, and I'm entitled to a little fun while I am still young. Wait until I start to make more. Then I'll save. I CAN'T SAVE NOW ! I just got married and I will have to buy many things. Wait until I get settled and then I'll save. I CAN'T SAVE NOW ! I've got a growing family on my hands. Maintaining the children and paying for the house cost a lot of money. It takes all I have to keep them going. As soon as they get a little older, it will cost less. Then, I'll save. I CAN'T SAVE NOW ! I've got the children in college. It's all I can handle right now. Wait until they are through. Then, I'll save. I CAN'T SAVE NOW ! I know I should but things aren't running the way they should. It's not easy for a man of my age to step out and get a better job. I have to ride along where I can. Maybe nothing will happen yet. I CAN'T SAVE NOW ! We're living on my retirement income alone and it doesn't go far these days. I wished I've started 20 years ago. But now it's too late. You can't save when you almost don't have income. Out of 100 young men, each expects to be successful by the time they retire. A recent study showed, however, that the following situation, exist at age 65. 25 Will Have Died 22 Will Have Incomes Less Than $7,000 49 Will Have Incomes Between $7,000 and $40,000 4 Will Have Incomes Greater Than $40,000 Source: U.S. Department of Health and Human Services, April, 1992 84
  85. 85. Four Steps Can Help Assure Your Financial Success THE LONGER YOU WAIT, THE STEEPER YOU WILL CLIMB 85 NO SPECIFIC PLAN STEP 1 Set Your Financial Goals STEP 2 Prioritize Your Goals STEP 3 Initiate A Plan of Action STEP 4 Review and Update Your Plan
  86. 86. Where Will You Be @ Retirement? 25 Will Have Died 22 Will Have Incomes Less Than $7,000 4 Will Have Incomes Greater Than $40,000 49 Will Have Incomes Between $7,000 and $40,000 According to a Department of Health and Human Services study of 100 people, age 25, starting their careers and each one expecting to be successful by the time they retire, the following situations exist at Age 65: Source: U.S. Department of Health and Human Services, April, 1992 8686
  87. 87. Financial Security is a Matter of Choice People in this circle accumulate dollars for education of their children, retirement and other worthwhile objectives. People in the second circle generally have money when they need it. People in this circle end up with little or no savings or investments. Most people spend first... and try to save and invest whatever is left Few people set aside a definite amount first... and spend the balance. 87
  88. 88. Soon, in the Economic World, Men and Women will be Divided into Two Classes:  Those who have capital  Those who lend money  Those who earn interest  Those who have a profession or position of authority These are the Men and Women Who Have Set Financial Goals  Those who don’t  Those who borrow  Those who must pay it  Those who will take orders all their lives These are the Men and Women Who Have No Plans of Getting Ahead. Source: Research & Review Service of America88
  89. 89. From birth to 16, she needs a good mother, From 17 to 25, she needs beauty; From 26 to 35, she needs personality; After that, all she needs, is Cash! Women’s Basic Needs are Simple Source: Research & Review Service of America89
  90. 90. If Your Financial Goals are to be Attained… Get the dollars out of your pocketbook before you spend them today Get the dollars out each and every month without fail Keep the dollars from getting withdrawn and being spent today Invest for a lifelong and generation-long permanency Give those dollars the full profit of compound interest Liquidate at a: (a) given date; (b) upon a given event in guaranteed amounts Be a golden rule investment- making provision for your family today and for yourself tomorrow 90
  91. 91. 91
  92. 92. In Search of Financial Security 92
  93. 93. You have only two kinds of dollars in your pocketbook. One kind belongs to you and the other belongs to the old person you will be someday. 93 If you spend the old person's dollars today, then youth is stealing from old age... today is stealing from tomorrow, and you are wasting away the security and happiness of yourself and/or your family.
  95. 95. Determining Life Insurance Requirements  “Human Life Value” Approach  “Financial Concerns” Approach  “Personal Financial Economics” Approach 95
  96. 96. There are Only Two Main Sources of Income 96  Salary  Employer Fringe Benefits  Personal Services
  97. 97. Mutt & Jeff “If this is true for a chicken, how much more it is… for human lives.” Economic Value 97
  98. 98. What’s the Worth of a Man’s Life? In the case of the greatest air disaster in the United States history, it all depends. At least $100 Million, quite likely $200 Million, and possibly $500 Million ride on lawsuits swarming about the crash of American Airlines Flight 191 on takeoff from Chicago's O'Hare Airport on May 25 of last year. (1979) Two hundred and seventy-three died that afternoon, literally in a flash. Now at least 142 plaintiffs have filed suits against McDonnell-Douglas, manufacturer of the DC-10 death plane, and American Airlines, its operator. All of the plaintiffs will get a bundle. In fact, they only have to ask. But how much they will get will depend on such legal niceties as compensatory damages, the admissibility of punitive damages, the fine point of pre-judgment interest and the simplest matter of all: "...what price do you put on the life of a human being?" Take a hypothetical case. On Flight 191 sits a minister, 35, with a wife and three children at home, his life dedicated to God, to his family, and fellowmen. He makes $20,000 a year if he is lucky. Across the aisle is a man of the same age, with a wife and three children, who through luck, brains, ambition and a willingness to walk over other people has achieved an annual income of $150,000. Both die in the O'Hare fireball. Both their wives filed suit for damages. The rich man's wife, who is well-heeled already, stands to get $4.5 Million. The minister's widow, who is having trouble paying the mortgage and getting the kids to school, can expect about $600,000. If, back in the cabin, there is an elderly bachelor with no close relatives, those relatives he has may get little more than enough to bury him. After all, the law reasons, the old gentleman's future was not worth much anyway. This scenario is the well-educated guess of an attorney deeply involved in the proceedings. It boils down to a legal standard that... “a man's worth is determined by how much he makes, how much he is likely to make, and whom he has to leave to." His worth as a human being has little, if anything, to do with it. A standard legal text says: "...had the decedent lived, the Court must consider what he earned, what he was likely to earn, what he spent on customary personal expenses, for instruction and moral training... his sobriety and thrift and occupation... and services before his death.“ "Of course, it's very unfair," said John J. Kennelly, the attorney who handles more of the Flight 191 cases than any other lawyer. "Of the complex laws governing the 34 plaintiffs within this charge... we are going under the 14th century (English) Common Law... it's a stage coach law. If you say the law is an ass, of course it is." He and Philip Corboy who handles the 26 of the 122 suits now before the US District Court of Northern Illinois, are more concerned over the dollars and cents difference between compensatory and punitive damages. Source: United Press International, Bulletin Today, May 30, 1980, Manila, Philippines 98
  99. 99. Life Insurance Capitalizes Human Life Values “Only through the miracle of life insurance was he able to capitalize his life value.” John R. Torell III Former Vice Chairman, Manufacturers Hanover Bank I want to say a few words about how we in the banking industry look at life insurance. Few industries have changed as much in the last decade as banking and insurance. But one thing has not changed, and that is our mutual desire to serve our customers. In this regard, my colleagues and I believe that adequate life insurance is as essential today as it was in 1759, when the first life insurance company was formed in the United States. This is because inflation has distorted our value system and made financial security much harder to achieve. A recent example comes to mind. A doctor, age 45, died and left a wife, rich by most standards, with a gross estate of about $1,600,000. One million of this was life insurance, arranged in a trust. When all the bills and taxes were paid, the doctor's net estate came to $1,300,000. Without life insurance, it would have been $300,000. Now, $1,300,000 may sound like a princely sum, but this doctor was earning about $225,000 a year at the time of his death. Like most of us caught by high taxes and high inflation, he spent most of what he earned. Only through the miracle of life insurance was he able to capitalize his life value. He had a good banker, and he had arranged to keep all these free of taxes and administrative expenses. To my mind, life insurance serves one purpose no other financial instrument can. It helps us buy time- time to build an estate, time to pay off our mortgages. It creates and immediate estate where none existed and, with proper planning, it does it free of all taxes. There are other aspects of life insurance, but to me it's chief value is estate creation, guaranteeing to each of us a meaningful estate, even in these times. 99
  100. 100. You’ll Earn a Fortune Years Before Retirement AVERAGE MONTHLY INCOME $3,000 $4,000 $5,000 $6,000 $8,000 $10,000 10 $360,000 $480,000 $600,000 $720,000 $960,000 $1,200,000 15 $540,000 $720,000 $900,000 $1,080,000 $1,440,000 $1,800,000 20 $720,000 $960,000 $1,200,000 $1,440,000 $1,920,000 $2,400,000 25 $900,000 $1,200,000 $1,500,000 $1,800,000 $2,400,000 $3,000,000 30 $1,080,000 $1,440,000 $1,800,000 $2,160,000 $2,880,000 $3,600,000 35 $1,260,000 $1,680,000 $2,100,000 $2,520,000 $3,360,000 $4,200,000 100
  101. 101. Acquired –v s- Potential 101 Your Age Now: Present Income: × Years to Age 65: Potential Economic Value: ______ $ _____________ ______ $ _____________ Home $ ____________ Car(s) $ ____________ Savings $ ____________ 401(k)/ Pension Plan $ ____________ Personal Properties $ ____________ Stocks & Bonds $ ____________ Total: $ ____________ PROTECT FIRST THAT WHICH YOU CANNOT AFFORD TO LOSE! 101 101
  102. 102. Human Life Value “The economic value of a human life arises out of its relations to other lives. Whenever continuance of a life is financially valuable to others, either to family dependents, business associates, or educational and philanthropic situations, the necessity for life insurance is present.” Solomon S. Huebner (1882-1964) President, American College of Life Underwriters Professor of Insurance and Commerce, Wharton School, University of Pennsylvania 102
  104. 104. How much is your car worth? How much is your house worth? How much do you earn a year? The chances are that the value of your car plus the value of your house wouldn’t equal to one-tenth of the amount of money you are going to earn from now until you reach age 65. However, statistics show that most people have 80% to 90% of the value of the cars and home insured, but have less than 5% of their earning power insured. Such situation leads me wondering... “Why will a person worry about the loss of a hunk of metal, a pile of brick and wood, but be unconcerned about his own flesh and blood ?” I operate the “guaranteed way” to restore this balance. Give me a call so we can arrange a mutually convenient time for us to get together. I look forward to be of service to you and your loved ones. Human Life Value Sample Pre-Approach Letter: 104
  105. 105. Family & Personal Financial NeedsFAMILY & PERSONAL FINANCIAL NEEDS CASH NEEDS $ Final Expense Fund $ Estate Settlement Fund I R S $ Mortgage Cancellation Fund $ Education/Vocation Fund INCOME NEEDS Years LIFE $ Levels of Monthly Income Income Replacement Fund $ Retirement/Long-Term Care Fund $ Special Needs Fund 105
  106. 106. DEATH… is like the Thief in the night. can provide guarantees that no matter what happens, your "Economic Value" will never be stolen from your family. 106106
  107. 107. If you’re willing to give up your life for your family, why don’t you insure it for them? 107
  108. 108. You wouldn’t hesitate to reach for this… … if someone threatened the lives of your loved ones. Then why hesitate to reach for this… APPLICATION FOR LIFE INSURANCE … when their future lives are threaten every day you gamble living another day without it?108
  109. 109. How to Find Out If You Have Enough Life Insurance? Will This Be Enough for Your Family to Maintain Their Present Lifestyle? Present Coverage: Cut in Half: Drop One Zero: Result: Assumed Tax Bracket: Net Annual Income: $500,000 $250,000 $25,000 20% $20,000 $500,000 at 5% will generate this “Pre-Tax” Annual Income Will provide $1,667 of Monthly Income 109
  110. 110. Here’s a Simple Way to Determine If It Is or Not 110 110
  111. 111. Here’s a Simple Way to Determine If It Is or Not 111 111
  112. 112. Here’s a Simple Way to Determine If It Is or Not Minimum Annual Income Requirement Maximum Annual Income Requirement $60,000 $72,000 50,000 50,000 ($10,000) ($22,000) * Assuming 5% Based on 5% rate of return, the present life insurance coverage of $1,000,000, can only provide $50,000 per year “before taxes,” spending only the interest with the capital remaining intact. * NOTE: IMPACT OF INFLATION NOT TAKEN INTO ACCOUNT. ADDITIONAL CAPITAL REQUIRED* $200,000 $440,000 112 112
  113. 113. INTEREST RATE FACTOR 3% 400.00 4% 300.00 5% 240.00 6% 200.00 7% 171.43 CAPITAL SUM REQUIRED for Replacement of “Monthly” Income 113 INTEREST RATE FACTOR 8% 150.00 9% 133.33 10% 120.00 11% 109.09 12% 100.00 EXAMPLE Monthly Income Required: $5,000 Assumed Interest Rate: 5% Factor: 240 Capital Required: $1,200,000* * Taxes and Impact of Inflation not considered.
  114. 114. 114
  115. 115. What are the Chances You’ll Accumulate Required Capital? Compounding Factor for Series of Equal Deposits at Beginning of Year @ 8% Interest The Chances of Dying Within Given Periods Year Factor 1 2 3 4 5 6 7 8 9 10 1.080 000 2.246 400 3.506 112 4.866 601 6.335 929 7.922 803 9.636 628 11.487 558 13.486 562 15.645 487 Year Factor 11 12 13 14 15 16 17 18 19 20 17.977 126 20.495 297 23.214 920 26.152 114 29.324 283 32.750 226 36.450 244 40.446 263 44.761 964 49.422 921 Year Factor 21 22 23 24 25 26 27 28 29 30 54.456 755 59.893 296 65.764 759 72.105 940 78.954 415 86.350 768 94.338 830 102.965 936 112.283 211 122.345 868 MALES FEMALES 1980 CSO Mortality Table 115
  116. 116. 116 “There should be a law that one can’t sue for more than the amount of life insurance one owns.”
  117. 117. Human Life Value & Standards of Living Luxury Comfort Necessities Poverty Charity Earned Income 117
  118. 118. Human Life Value & Standards of Living This chart shows the various standards of living, from Charity and Poverty at the very bottom... to the Comfort and Luxury levels at the very top. Adjacent to the top two standards of living is a circle representing a family and indicating that they are enjoying a comfortable lifestyle and some luxuries in life. What holds the Family Circle up that level? 118
  119. 119. Human Life Value & Standards of Living Income, of course. It's the most valuable asset of a man and his/her family. The money one earns in exchange for the time and effort spent working constitute the thing that keeps his/her family's standard of living at a high level. The law of gravity, however, holds that if nothing supports the circle at that level, it should roll down to the bottom. 119
  120. 120. Human Life Value & Standards of Living It is evident, therefore, that only a person's earning power maintains his/her family circle at a high plane, and when that block of income is taken away, his/her family circle will simply have to roll down the hill. It will roll to the very bottom unless it is stopped at some point along the way by another new source of income to replace the value that was lost. 120
  121. 121. When a Breadwinner Dies, a Family Suffers 3 Deaths: The wife loses her husband The children loses their father The entire family loses his income… the income he should have earned if just lived. Life Insurance cannot replace the father nor the husband but it certainly can replace his income to make tomorrow, the kind tomorrow he intended it to be. 121
  122. 122. Why Life Insurance on the Wife  To help pay off the mortgage  To offset the extra estate tax  To pay the cost of last illness  To provide a charitable bequest  To provide a “housekeeper fund”  To provide a dowry for the daughter  To pay for her last expenses in old age  To help with the children's education  To supplement her husband's retirement income  To help a son or a daughter in the first, low-income years of marriage  To supplement Social Security old age income if her husband dies first  To supplement Social Security after her husband retires until payments begin when she's 62  To provide cash for a trip she'd like to take when the children are grown  To continue retirement income if husband's funds runs out at his death  To give a son or a daughter a memorable wedding  To offset loss of income tax savings  To do something for grandchildren  To help her husband retire earlier  To give a son or daughter a start in business  To provide a safe investment 122
  123. 123. “The problem about getting born into this world is that we’ll never get out of it alive.” About the Death Penalty 123
  124. 124. THE DESIRE TO BE A BEING WORTH REMEMBERING One of the things that stands out in the minds of family heads and in the hearts of those who truly loves is the desire to be a being worth remembering. “One thing is absolutely certain. We will be remembered. Will it be for what we did or for what we failed to do?” Charles Murray in his book, “Don't Talk To Me About Death” 124
  125. 125. A person can reach this objective provided that he or she:  Had saved regularly and consistently over time  Investments were successful  Had sufficient time to complete the plan Disability Death INVESTING & LIFE INSURANCE (The Stairs & Elevator Analogy) $1,000,000 $800,000 $600,000 $200,000 $100,000 Objective: $1,000,000 CAPITAL 10th Floor $400,000 Elevator $900,000 $700,000 $500,000 $300,000 10th Floor Stairs125 Investments “ACCUMULATION” “CREATION” Stairs125
  126. 126. SAVING/INVESTING & LIFE INSURANCE (The Elevator Analogy) Let's suppose a man realizes that he needs $1,000,000 to provide adequate income for his family in the event of his early demise or for himself if he should live too long. Being a loving, responsible father and husband, he is currently saving a part of his income with the hope of ultimately creating this capital for such eventualities. Furthermore, he hopes to have sufficient time in order to complete his plans. Translating the scenario visually, let's compare his goal of saving $1,000,000 to that of reaching the 10th Floor of a building. Each floor representing $100,000. He can reach the 10th Floor in two ways. He can either take the Stairs or use the Elevator. Using the “Stairs” to reach the 10th Floor can be compared to the goal of saving systematically until the desired amount is reached. There is no doubt that the goal can be reached provided he can save successfully, will be able to invest successfully whatever had been saved and he has sufficient time to complete his plans. Under this method, however, if he should die prematurely or should get disabled, his family will only receive whatever had been saved plus interest earnings... never that amount as he had originally intended to accumulate. His other option is to use the “Elevator.” He only needs to press the 10th Floor button and no matter what happens along the way, that elevator will always bring him up to the desired floor. He will not be a “defaulter.” In the business of living, loving and maintaining accustomed lifestyle, one such kind of a vehicle is…. LIFE INSURANCE.126
  127. 127. Investments vs. Life Insurance LIFE INSURANCEINVESTMENTS You provide the Capital to earn Interest You pay the Interest to create Capital 127
  128. 128. 128
  129. 129. The Four Basic Rules That Influence Financial Institutions’ Advice Description Examine the Financial Strategies You are Currently Using and Compare Them with These Four Basic Rules They want us to give them our money They want us to give them our money on a regular basis and keep it for as long as possible and give us back as little as possible They want us to give them our money on a regular basis They want us to give them our money on a regular basis and keep it for as long as possible LEAP by Robert Castiglione 129
  130. 130. Where Will You Place Your Money? Year 1 2 3 4 5 Rate 18% 32% 11% (17%) 10% Earnings ? ? ? ? ? Value ? ? ? ? ? Rate 10% 10% 10% 10% 10% Earnings ? ? ? ? ? Value ? ? ? ? ? Scenario:  You have an X amount of money and have two kinds of instruments you could put it into, and  You have a crystal ball and have the ability to know what the rate of return would be for five years... 130
  131. 131. Where Will You Place Your Money? How a $1,000 Deposit Grows at Compound Interest Year 1 2 3 4 5 Rate 18% 32% 11% (17%) 10% Earnings 180 378 171 (294) 144 Value 1,180 1,558 1,729 1,435 1,579 Rate 10% 10% 10% 10% 10% Earnings 100 110 121 133 146 Value 1,100 1,210 1,331 1,464 1,611 LESSON TO BE LEARNED: In a volatile environment, one bad year can offset many years of exceptional gains and may place the investor’s financial plan in jeopardy. 131
  132. 132. Paying Too Much, Paying Too Little “IT IS UNWISE TO PAY TOO MUCH... BUT IT IS WORSE TO PAY TOO LITTLE.” “When you pay too much, you lose some money... that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was supposed to do. The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidders, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.” - John Ruskin 1819-1900 A wise person once said… “When you buy the very best, you only wince once?” 132
  133. 133. One Indisputable Fact Your Money Pays Premiums for Your Insurance But Only Your Health Enables You to Obtain It! 133
  134. 134. Remember If People Don’t Buy the Concept, All the Details are Meaningless! If You Don’t Understand the Details, You are Meaningless! 134
  135. 135. Waiters 135 The bride, white of hair, is stooped over her cane, her footsteps uncertain, need guiding. While down the opposite church aisle with a wan, toothless smile, the bridegroom in a wheelchair comes riding. Now who is this elderly couple, thus wed. Well, you’ll find out when you’ve closely explored it that there is that rare, most conservative pair who waited “until they can afford it.” Art Today
  136. 136. Synergia Business Presentations Joaquin “Duke” G. Wilwayco Phone: (512) 799-2999 Email: 136