A few years ago a friend (whom I'll call "Bill") heard I was selling insurance. Bill and I hadn't been in contact for a few years as he had moved out of town, so getting a call from him was a bit unexpected. We chatted briefly and then he gave me his personal situation. Bill was doing well financially with a successful business, was considering getting married and had a few investments here and there. We discussed my practice and what I offered.
Then he asked, "What's the best insurance plan you have?"
Knowing he was an analytical thinker I replied with, "What are you trying to accomplish?"
He laughed and said, "That's the answer I was looking for. If you had blurted out a specific product I'd know that you were probably looking out for you instead of me." He suspected, and perhaps rightly so, that a life insurance agent would push the product that would pay the highest commission.
When someone calls in and asks for a specific product, say a 20-year term life insurance policy for $150,000, I know that they probably have done some research. I may ask a few questions to make sure it's what they need, but I do my best not to pressure someone. They have a need and a budget and I do my best to keep them happy.
On the other hand, if you have an agent who aggressively promotes one insurance product constantly, they are not looking at your "big picture" holistically. A good example is the financial "advisor" who only pushes annuities. The commissions on these can be big and agents like to sell them because there are no health questions. Herein lies the problem. Not everyone needs an annuity, but the agent will make it sound like everyone does.
One of my former coworkers at a life insurance agency loved to take applications on clients who were tobacco users. He said it was a "premium enhancer" because their rate would increase, thus making his commissions go up as well. I watched him one day as he was getting basic information from a client. He asked if she smoked and she said that she did. "Good for you!" he said enthusiastically and patted her on the back.
On another occasion, a client answered that she did not use tobacco. He frowned a bit and said, "Too bad, all the cool kids are doing it." He tried to make it a joke, but I got the feeling he was disappointed in the client's good habits.
All of this leads back to that dirty word, "commissions". Unfortunately, people hear that word and think that someone is trying to take advantage of them. And yes, the higher the price of a policy, the more I make, but it's true in other professions too.
Realtors work off of a percentage of the sale, but that doesn't mean I don't trust them. As I'm currently working with a realtor to sell some property I can say that he has gone above and beyond the call of duty and has put in a lot of hours. Having a rough estimate of what his commission will be doesn't give me pause. I know he's working in my best interest.
I have learned from experience that when I can satisfy the client with my work I'll get referrals, which leads to more clients. And that is how I make my living, by looking out for the client, not my paycheck.
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
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