What clients want

sGiven the pronounced need for leads and the challenge prospecting poses to advisors, it is important to look at the methods advisors are using to prospect for new clients (Figure 7; click to enlarge). Referrals — both client and professional — and cross-selling to existing clients figure heavily at the top of the list of methods. Advisors generally are not successfully utilizing social media to prospect for new clients.

Advisors report that, by far, the main reason their clients consider the purchase of a life insurance product is to provide income for the family in the event of a death of a loved one (Figure 8; click to enlarge). Paying off debt (40 percent), covering funeral expenses (38 percent), passing wealth to heirs (35 percent) and paying for a loved one’s education (25 percent) follow income replacement as reasons why clients consider life insurance.

Despite the conventional view within the industry that advisors gravitate to a high-net-worth clientele, it is worthwhile to note that advisors are still heavily dependent for a good deal of their commission income on the middle market (consumers with less than $100,000 in investable assets). This phenomenon is further evidenced by the fact that term insurance is, by far, the most commonly sold life insurance product. Further, final expense insurance significantly outranks estate planning when advisors were asked which sales concepts they utilized most in the past 12 months. d

Nearly 9 in 10 advisors are appointed to sell life insurance for more than one company, and more than half sell for at least five companies. Given the broad number of companies advisors work with and the wide variety of product each company offers, it is interesting to evaluate what factors are most important to advisors when they make a product recommendation to a client (Figure 9; click to enlarge). Company reputation/financial strength figures as the most important factor when making a product recommendation, while high commissions ranks at the bottom of the list as the least important attribute.

Although more than 1 in 3 advisors cite client perception about product affordability as a primary sales obstacle in a previous area of the survey, low rates ranks as the second least important product attribute when making a product recommendation to a client.

sFlexible underwriting and a simple application process also heavily influence an advisors’ decision about whether or not to recommend a specific life insurance product.

Click here for more content from LifeHealthPro's 2013 Life Insurance Study.

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