Step 1: Find Out What They Have
The 1st step in the FE 5-Step Formula is to find out what the prospect has to help pay for their final expenses. At this point you want them to 'put it all on table' and in order to do that, all you have to do is ask. You should always assume that your prospect has done at least a little pre-planning for their final expenses. Here are the two questions I always open with:
"Were you looking at this for yourself, or somebody else?"
and
"Do you have a burial plan of any type? Any type of life insurance, prepaid mortuary plan, or burial policy? Anything like that that will help pay for the final expenses?"
The first question helps them take responsibility for mailing in the card or requesting information. Many people think that it is YOUR problem that you called on them, and you are somehow being an annoyance by sitting there. This question just reminds them that you are simply completing a request THEY have made. It also helps me to know who I should cater the presentation toward.
The second question will help you learn everything you need to know about your prospect's situation. If they claim they have one or more plans, then you MUST find out all the details of those plans. You want to get it all out on the table RIGHT NOW, because if you don't it will make your job harder when it comes to Step 2. It will also help you decide if a replacement could be an ethical switch.
Types of Coverage
There are several types of life insurance out there, but you will typically only be dealing with three. As long as you have a handle on these three, you should be okay.
Your prospect has 'day one' coverage. This is the coverage everybody wants.
If your prospect dies from natural causes during the first 2-3 years of the policy, their death benefit will ONLY be a percentage of the total death benefit. For example, Tom has a $10,000 graded death benefit. If he dies during the first year his death benefit will be 30% or $3,000. If he dies during the second year it will be 70% or $7,000. Year 3+ will pay the full $10,000.
If your prospect dies from natural causes during the first 2-3 years of the policy they will only receive what they paid in premiums, nothing more.
Questions to Ask
Here is a list of question you could ask to find out what the prospect has.
Ask to see their current policy or burial plan.
This will help you know exactly what they have. It will also help because you will be able to show them in writing all the disadvantages of their current policy, if there are any. Don't be surprised if they say their policy is 'buried in a box somewhere.' Tell them you will wait.
Here's another trick I like to use; I learned it from my friend Rodney. Use this script if they say 'it is filed in a box somewhere'.
"Tell you what. Do you mind if I use your bathroom real quick?"
Prospect: Sure.
"While I'm doing that, you can look for your policy and we will meet back here."
It doesn't always work but, every now and again, it will be just what you need for them to make the effort. If they simply won't go get the policy, then you should go through the series of questions we just discussed. A lot of the time, as you are asking them the questions above, they will grow uneasy about their current coverage. That will be the last bit of motivation they need to go find their policy.
What if the prospect doesn't have any coverage?
If they don't have anything, you can pretty much assume a sale as long as you follow the rest of the steps to perfection. One question I like to ask if they don't have ANYHTHING prepared is:
"What has kept you from getting something in the past?"
This question is great because it will tell you the main reason they have not purchased anything. Use the information you get from this question to structure your presentation.
All the questions in this section are designed to get the prospect to question their current situation. That doesn't mean that what they have is bad...you are just trying to get them to open up so you can find out if you have anything better.
By the time you are ready to move on to the next step in the process, you should know EVERYTHING about their current situation. If you do...then move on to the next step.
The 1st step in the FE 5-Step Formula is to find out what the prospect has to help pay for their final expenses. At this point you want them to 'put it all on table' and in order to do that, all you have to do is ask. You should always assume that your prospect has done at least a little pre-planning for their final expenses. Here are the two questions I always open with:
"Were you looking at this for yourself, or somebody else?"
and
"Do you have a burial plan of any type? Any type of life insurance, prepaid mortuary plan, or burial policy? Anything like that that will help pay for the final expenses?"
The first question helps them take responsibility for mailing in the card or requesting information. Many people think that it is YOUR problem that you called on them, and you are somehow being an annoyance by sitting there. This question just reminds them that you are simply completing a request THEY have made. It also helps me to know who I should cater the presentation toward.
The second question will help you learn everything you need to know about your prospect's situation. If they claim they have one or more plans, then you MUST find out all the details of those plans. You want to get it all out on the table RIGHT NOW, because if you don't it will make your job harder when it comes to Step 2. It will also help you decide if a replacement could be an ethical switch.
Types of Coverage
There are several types of life insurance out there, but you will typically only be dealing with three. As long as you have a handle on these three, you should be okay.
- Immediate Death Benefit
- Graded Death Benefit
- Return of Premium
Your prospect has 'day one' coverage. This is the coverage everybody wants.
If your prospect dies from natural causes during the first 2-3 years of the policy, their death benefit will ONLY be a percentage of the total death benefit. For example, Tom has a $10,000 graded death benefit. If he dies during the first year his death benefit will be 30% or $3,000. If he dies during the second year it will be 70% or $7,000. Year 3+ will pay the full $10,000.
If your prospect dies from natural causes during the first 2-3 years of the policy they will only receive what they paid in premiums, nothing more.
Questions to Ask
Here is a list of question you could ask to find out what the prospect has.
- What type of insurance do you have? Is it term life? (Say term life, not whole life. Many people think that their temporary term life plan is good for their whole life so they will say, "Yes." If they say term, then you can talk about the rising premiums, decreasing benefits, or coverage terminating.)
- What do you pay per month? (This will typically tell you what type of plan they have. If they are paying very little for a large amount of insurance, chances are they have a term or accidental death policy. If this is the case, make sure you ask how long they have had the coverage in place, because if they have had it for 10+ years it could still be a whole life plan that they purchased when they could still get a cheaper rate.)
- How much death benefit do you have? (Once again, this will tell you what type of plan they have. If the death benefit is more than $50,000, chances are it's a term or accidental policy.)
- What is the name of the company you purchased it from? (As you get familiar with your competition, this question will help a ton. For example, if they say they have an AARP policy, you know they purchased it through the mail and that means $$$ for you.)
- Did you purchase it through the mail? (If they did then chances are they have a waiting period, increasing premiums, and/or cancellation at a specific age.)
- How long ago did you get the coverage? (If the coverage was purchased within the last two years and via mail, there is a good chance the prospect has a limited death benefit for the first two years of their policy. If you can get them an immediate benefit, then you will make the sale.)
- Do the premiums increase? (We ask this to get them to question the type of coverage they have. This helps them open up and listen to what you have to say.)
- Have you ever seen the premiums increase? (If premiums have increased then you know it is a term life or UL product.)
- At what age does it cancel? (This is super assumptive, but once again, it's designed to get them to open up and pull out their policy so you can see it.)
- What is covered with your mortuary plan? (Despite what people think, most mortuary plans don't cover everything the prospect thinks they cover.)
- Is just your plot paid for, or is the funeral paid for too? (Prospects often don't know that final expenses consist of 3 expenses: mortuary expenses, cemetery expenses, and other. If they only have one of those 3 taken care of, they still have a ways to go.)
- Did the mortuary freeze the price of the funeral or will the family have to come up with more money? (Typically the prospect won't know the answer to this question, but it's a good one to ask because it opens up more to talk about.)
Ask to see their current policy or burial plan.
This will help you know exactly what they have. It will also help because you will be able to show them in writing all the disadvantages of their current policy, if there are any. Don't be surprised if they say their policy is 'buried in a box somewhere.' Tell them you will wait.
Here's another trick I like to use; I learned it from my friend Rodney. Use this script if they say 'it is filed in a box somewhere'.
"Tell you what. Do you mind if I use your bathroom real quick?"
Prospect: Sure.
"While I'm doing that, you can look for your policy and we will meet back here."
It doesn't always work but, every now and again, it will be just what you need for them to make the effort. If they simply won't go get the policy, then you should go through the series of questions we just discussed. A lot of the time, as you are asking them the questions above, they will grow uneasy about their current coverage. That will be the last bit of motivation they need to go find their policy.
What if the prospect doesn't have any coverage?
If they don't have anything, you can pretty much assume a sale as long as you follow the rest of the steps to perfection. One question I like to ask if they don't have ANYHTHING prepared is:
"What has kept you from getting something in the past?"
This question is great because it will tell you the main reason they have not purchased anything. Use the information you get from this question to structure your presentation.
All the questions in this section are designed to get the prospect to question their current situation. That doesn't mean that what they have is bad...you are just trying to get them to open up so you can find out if you have anything better.
By the time you are ready to move on to the next step in the process, you should know EVERYTHING about their current situation. If you do...then move on to the next step.