If you are trying to sell life insurance by cold calling, buying expensive leads or knocking on doors, you might be surprised to learn that there is a much easier way to sell life insurance. That easier way is by selling life insurance in the workplace. In this article, I’m going to walk you through the basics of how to sell individually owned life insurance at work.
Why offer life insurance to employees at work?
The best thing about selling life insurance at work is that it allows you to see a bunch of prospects at one time. You no longer have to see prospects one at a time. This makes your selling much more efficient and less expensive as well since you don’t have to drive to every prospect’s home individually.
In addition to that, when you work with employer groups, you can negotiate guaranteed issue underwriting for employees so that policies are approved on the spot with no exams or medical questions.
This saves you the hassle of making sure that all the medical requirements are in and the time waiting for a decision whether or not your policyholder will be approved. You’ll know on the spot.
Further, since premiums are payroll deducted, you’ll know that the premiums will come in and you’ll get paid.
How much life insurance premium can I write in the workplace?
To calculate how much annualized premium you can expect from an employer group, take the number of employees and multiply it by 100.
This means that for every 100 employees you can expect to write about $10,000 in annualized premium. Some groups you’ll earn more and others less, but it’s a good rule of thumb.
Now that you know why it’s a good strategy and how much premium you can generate, let’s talk about the steps involved in getting started selling to employees.
Step 1: Find a life insurance carrier that offers guaranteed issue life insurance policies via payroll deduction
The first step in getting started is to find a life insurance carrier that offers policies to employees at work. You’ll need a carrier that will give you a good underwriting offer and also one that knows how to collect premiums with list bills.
A good underwriting offer is one that is guaranteed issue with no exams or medical questions. To get that offer, you’ll need to give something in return. That’s an assurance you’ll see all the employees and meet certain participation requirements.
Step 2: Contact larger employer groups with employees who aren’t likely targeted by traditional life insurance agents
These days, traditional life insurance agents focus on high net worth individuals because that’s where the money is. Meanwhile, they aren’t calling on people who don’t make as much money. However, these people still want and need life insurance even though no one is calling on them.
Given a choice between working with a law firm with a 100 employees or a manufacturing company with a 100 employees, you’ll want to work with the manufacturing company all day long.
The reason why is because at the law firm all those attorneys have already been called on by life insurance agents. However, very few of the manufacturing company employees will ever be contacted by a life insurance agent. Those are the employer groups that need life insurance at work and the best prospects.
Also, you’ll want to focus on employer groups of at least 50 or more employees. Over a 100 is ideal.
This is for two reasons.
The first is because, in order to get a guaranteed issue underwriting offer for employees, you need to spread the risk across a larger set of people.
The second reason is that it makes it worth your time and it allows you to expand your geographic sales territory.
Step 3: Negotiate with the employer to let you see the employees and collect the premiums via payroll deduction
Once you start meeting with prospective employer groups, you have to negotiate access to see the employees and a payroll deduction.
Of the two, the most challenging of the two is to persuade the employer to let you present the offer to the employees.
Seeing employees is the key to making this strategy work. If you don’t see the employees the insurance company won’t give you guaranteed issue and you won’t make any money.
How you negotiate this access is by trading access for guaranteed issue. All the employees with medical problems can get a policy but only if everyone at least hears the offer.
Step 4: Present the offer to each employee and get a yes or no decision
The final step is to meet with each employee and present the offer. When you do this, you don’t want to focus on how many people purchase life insurance but on taking each employee through the process.
That process consists of a making a presentation to each employee, giving them time to review it and getting a yes or no. There’s no need to pressure employees to buy. When you do the process, on average 3 out of 10 will buy some life insurance from you.
It’ll depend on the group though. Some groups you might get more and others less.
Your focus though regardless of participation is that see each employee, present to them and follow up to get a yes or no.
When you do that correctly and without pressure, you’ll sell a lot of life insurance.
Selling life insurance at work is a lot easier and a lot more fun than doing it one at a time at everyone’s house. Once you get the hang of it, it’s possible to write millions of dollars of premium this way and give up the old school methods.