What is Final Expense?
Final Expense life insurance is a marketing term that describes small Whole Life policies, usually between $5000 and $25,000 in value, sold for the purpose of covering ones’ final expenses after death. These expenses can include burial expenses, such as the casket, the opening and closing, the actual funeral service etc. It can also include debts, taxes and loss of income.
Final Expense agents service the senior market, usually working with folks in the 50-85 age range. Many life insurance agents sell final expense products to the senior market, but they are not Final Expense agents! The Final Expense market is unlike any other market in our country. We serve mainly folks that have very low incomes; many are disabled and/or have a myriad of health conditions. They need our help and not many agents are willing to do what it takes to get in front of this category of people.
Final Expense policies are designed with our clients in mind. They are Whole Life policies, so we know they will not expire before the client does. The product is defined as a Simplified Issue Whole Life policy. There are no blood tests or doctor records needs. No nurse will have to go out to the client’s home. In most cases, our clients will know they are approved before we leave the house.
Since many of our clients have health problems, Final Expense products are designed to accommodate our clientele. Where many Life Insurance products would severely rate up or decline our prospects, our products will offer 100% first day coverage for a majority of our prospects. With an affordable monthly payment, our clients can get the peace of mind they are looking for and help their families provide for their final expenses when the time comes.
How is Final Expense Sold?
Most successful Final Expense Agents get in front of their prospects using Direct Mail leads. Some may also use Telemarketing Leads or Internet Leads to start off and/or supplement their Direct Mail leads. This process of using leads helps agents get in front of interested and qualified prospects on a weekly basis. This way we are spending our time selling, helping seniors and making money rather than spending countless hours prospecting.
Working with mainly seniors, we usually work daytime hours. This is great for agents that need/want to put their family first. Unlike Mortgage Protection agents, we do not have to wait until folks get off work in the evenings or have to run weekend appointments. For the most part, our prospects are all home during the day!
Agents will set appointments and door knock their leads and give a Final Expense presentation to their clients face to face in their home. Once we have established WHY they responded back to the lead, we will explain our product, show how we are different from the other guy, then we will health qualify the prospect and build them a program that fits within their budget.
It may sound easy, but it still requires hard work and a mentor to help cut your learning curve down and move your income earning potential up!
Captive vs Independent
So you’ve decided to become a Final Expense Agent. Now you have to make sure you start in the right place. Most agents fail because they choose the first and/or wrong organization off the start. Without the right support and product portfolio, many of us will be doomed to mediocrity or failure! Final Expense may be a form of sales, but it is unlike any other type of sales in the world. The product may be simple, but if you do not learn the prospect, you will fail. So it is of the utmost importance that you choose the right organization and mentor so that you can be successful.
Captive agencies are just that; captive. You will usually be working directly for the insurance company. You may or may not be 1099 self-employed contractor. You will be placed in an agency that is near to your geographical location. You will usually be required to attend weekly or daily sales meetings at the office. This can be a good thing for those with an “employee mindset.” Your week will be structured for you. Many times, Captive Agencies will provide leads for their agents along with training. The overall value of these benefits will differ based on the manager you work under. Many times these organizations will be “Team Building” agencies, meaning that their goal is for everyone to build a team and start doing that as quickly as possible. There will be many rungs to the ladder and you will start at the bottom.
Because there will be so many different levels between you and the top, you will never reach the top. Many people describe the insurance business as a pyramid scheme. What corporate organization is not though? Captive agencies tend to resemble the negative aspects of a pyramid scheme more closely, however. It is not uncommon for agents to start at 50-80% commission rates. Maybe the guy at the top is at 120%, then there’s a guy at 100%, then 90% and so on all the way down to the bottom. You will never be able to go above the manager above you and your manager will never be able to go above his manager and so on.
Captive agencies are also limited on the products they can offer. Usually they will only have one final expense product and if it is a good fit for the client, great, but if not, they don’t have anything else to offer. The pricing for the consumer is usually higher as well compared to an independent product. From what I’ve seen and from the agents I’ve talked to, the lead costs are higher as well. Sometimes they will offer free leads with the lowest contracts. Remember what your mama always said, “Nothing in life is free!” This is true with “free leads” as well. This topic is covered in detail below.
As you can see, I am not a fan of the captive agency format!
Independent agencies are different. The main appeal is twofold: usually higher commissions and broader more competitive product base.
Independent agents are always 1099 self-employed agents. You will choose an Insurance Marketing Organization (IMO) and then contract with multiple Final Expense carriers. You will then be able to offer the most competitive products to your clients. If you are truly wanting to do what is in your client’s best interest, I believe this is the only way to sell Final Expense.
This type of agency only works with self-starting entrepreneurial individuals. Nobody is standing over your shoulder Monday morning making sure you go to work. If you are lazy or need a boss to tell you what to do, go find a J O B! If you want unlimited earning potential based off of your hard work and dedication, then the Independent route is the one you should take.
Types of IMOs
So you’ve decided to take control of your income and you want to be a business owner. Now you need to find the right Insurance Marketing Organization (IMO). Which is the right one for you? Are all IMOs the same? NO! While every IMO is different, I believe there are 3 general types of IMOs.
Type 1 – Little Help
There are organizations out there that just offer Final Expense contracts with multiple carriers. Usually you can get the highest contracts with these groups. Sometimes you can get 110% or more. Some of these groups are better than others. Some will offer lead programs and maybe even a training call once a week. They will provide little to no mentoring. If you need help, it will be difficult to get it. Either the managers will answer the phone because they are not in the field and haven’t been in the field in years, so they won’t know how to help you or maybe they are still in the field and choose not to answer the phone.
Either way, this type of setup will only work for agents already producing at high levels that have mastered the Final Expense market. These types of agents require no support, want to be by themselves and don’t mind doing all the extra administrative work that comes with this type of setup.
Type 2 – Way too much help
There are independent organizations that seem to be designed after the captive agency format. Their only saving grace is that they do offer multiple carriers. Many times these type of IMOs still require daily or weekly meetings. Many times they also offer (super expensive in the long run) “free leads.” They may give out leads at little or no cost, but these leads have been worked and reworked by dozens of agents before you.
They will pressure you to start building a team right away. We, proverbially, call these groups “churn and burn” agencies. Few agents will be able to survive the beginning months and years to get to the promised higher earning potential. The owners and the managers at the top are making bank though. With a half a dozen or more layers to protect themselves against chargeback rollups, they are flying high. But this model will not end up being successful for most agents.
While there is little cost to get started in these types of groups, the chance of succeeding is very slim and will require a lot of hard work. If you are working at Home Depot or Taco Bell, then this sort of group is better than nothing. Look at it as a learning experience, get the training you can and get out of there before you burn out!
Type 3 – Just the right amount
There are a few IMOs that offer the right balance for the majority of entrepreneurial agents. They will provide everything an agent needs to be successful in this business.
First off, they will provide an agent a personal mentor. This will be someone who has been in the business for years and has a successful track record selling Final Expense personally. These mentors will have earned their high commissions from year in and year out high production and will be able to pass on higher commissions to their agents. Agents will receive 100%-120% contracts off the start.
The mentor will then personally invest in each and every agent. They will be available by phone, text or email most of the time. When you are in a house, they will be able to help you. No need to wait until the weekly conference call to get the help you desperately need right away. Your mentor will also provide you with training materials and teach you the Final Expense business from the ground up. They will teach you how to correctly order your business, structure your week, work your leads, present in the home etc. They will teach you what you need to do to be successful. Your mentor will teach you how to replicate their system so that you can become as successful as possible as quickly as possible.
The right mentor will also have teamed up with the right agency that provides the support Final Expense agents need. They will provide Direct Mail Leads (as well as other forms of leads) on a set price basis. You will not have to take any risk with your marketing efforts. You will only have to pay for the leads that come in at a price that you are made aware of from the beginning. The agency will provide back office support. This will include departments that handle contracting, leads, territories, recruiting, billing and an office manager that can get you the forms, apps and other documents sent directly to you.
This type of agency will provide ongoing training from other agents and agencies within the IMO. I know that our IMO offers 3 training calls a week. While not mandatory, they always include helpful information that will help you make more money. They also have access to a treasure trove of training calls, videos, recordings and the like from past producers sharing their knowledge in the Final Expense arena.
As has already been discussed, a mentor is a necessity to become a Final Expense Agent. Let me share a personal story. When I got into this business, I got into it part time. I was still finishing up my degree and working a J O B. I had no idea what I was doing, but figured it was sales, and I had done sales all my life, so I would figure it out.
I sold around $30,000 in Annual Premium my first year. That’s embarrassing! The second year, I took some much needed counsel and made the decision to purchase leads every week. That was my intention, but that’s not what I did. I would buy some leads, then work them to death for a few weeks and then when they ran out, I would buy some more. Towards the end of my 2nd year, I got hooked with a Mentor. He showed me his system and shared with me what I needed to know and do to be successful in Final Expense. I started purchasing leads on a much more regular basis and I ended up writing $60,000 in AP, about half of that in the last 3 months of the year.
So at my Mentor’s prodding, I committed to purchasing leads on a weekly basis NO MATTER WHAT! My 3rd year in Final Expense I wrote right at $155,000 in AP. I’ve written between $150,000-$200,000 every year since.
I cannot say this enough: Final Expense is completely different they every other type of sales in the world. The prospect is different. They think differently than you and I. They handle their money differently. They raise their families differently. You have to learn the mind of the Final Expense Prospect before you can be successful in Final Expense. Wisdom is taking the knowledge that others have and using it for yourself. Being a man or woman of understanding requires you to seek out the wisdom in others.
The best Final Expense agents are those that realize they need a mentor, then go and find a mentor and replicate the system the mentor has taken years to refine and put into place.
This is what causes the majority of agents to fail in the “team building” type of agency. Who would you rather follow: an agent that has been in the business a short few months or someone who has been doing this successfully for years? That’s why those type of agencies will always be “churn and burn” agencies. Yeah, you may find a star here and there, and that’s who they are looking for, but they will go through 100s of agents to find them. What happens to the agents that fail? They end up working for Verizon in the mall!
This is also why most of the agents fail out of the IMOs that offer little to no support. Either they have no one to teach the agent how to work the Final Expense market or they have Mentors that could teach you, but they are unavailable for most of their sub-agents.
Now maybe you like the idea of “team building.” I don’t think there is anything wrong with that, but you need to do it the right way. You have to learn how to walk before you can run. You need high enough contracts yourself, so that your agents don’t starve. If you make it your goal in life to help others reach their goals, you will always be successful. If you try the “get rich quick” route, you will not only fail yourself, but any agent trying to break into this business.
So find a Final Expense Mentor that knows what they are doing. Find an agency that is dedicated to Final Expense. Find an agency that will help with all the mundane administrative tasks that will let you spend your time in the field making sales! The most successful salespeople, in any field, find a niche and devote themselves to that niche. You will always make more money if you focus on one product or service, rather than trying to be a jack of all trades.
Josh Jones is an expert in the Final Expense market. He and his business partner, Brandon Smotherman, who is a $400,000/year Final Expense Producer, have taken their years of successful experience in the Final Expense and Medicare markets and are now teaching agents how to replicate their proven system. So whether you are thinking about entering the Final Expense market or you are a veteran agent that desires a greater income or you just want to add some Final Expense products to cross sell, Josh and Brandon have the knowledge and resources to help you grow your business.
Visit https://learningfe.com/what-we-offer/ for more details.