In the lead up to AEP, you’re probably focused on getting ready to sell Medicare insurance plans, but life insurance deserves your attention, too. September is Life Insurance Awareness Month, and the perfect time to educate your clients and leverage cross-selling opportunities.
Why Your Clients May Need Life Insurance
When you think of the ideal life insurance candidate, you may picture a young to middle-aged client with young children to provide for. However, there are many different types of life insurance, and a policy can support many different goals.
Your clients may be interested in life insurance to:
- Facilitate wealth transfer. Larger estates may be subject to estate taxes, and some states set the threshold pretty low, meaning you don’t have to be extremely rich to end up owing Uncle Sam. Life insurance death benefits are not generally subject to income tax, so life insurance can be a smart way to transfer generational wealth while minimizing the tax burden.
- Cover final expenses. Some life insurance policies offer modest death benefits that are designed to cover a person’s final expenses, such as their burial costs. The National Funeral Directors Association says the average funeral costs around $8,300. For many families, this can represent a financial burden. Seniors can pre-plan their funerals to ensure that their wishes are carried out and to pay for the costs in advance.
- Secure long-term care benefits. Some life insurance policies offer long-term care benefits in addition to the death benefit traditionally associated with life insurance. These hybrid policies can be popular with people who want to secure long-term care coverage but can’t afford a standalone policy.
- Supplement their retirement plan. Whole life insurance policies and annuities build a cash value that the policyholder can tap into. These tools may be appealing to individuals who want life insurance that provides retirement income.
- Care for loved ones. Some of your clients may have people who depend on them for care. Many seniors are the primary caregivers for spouses, disabled adult children and other relatives or friends. If they pass away, there may not be anyone left to provide necessary care. A life insurance policy can provide a way to pay for future care.
How to Cross-Sell Life Insurance
Cross-selling life insurance is an effective way to boost your revenue while meeting the needs of your clients. Cross-selling can also support client retention because clients are typically less likely to leave when they have multiple policies with you. Why give other agents a chance to swoop in and take your clients? If you can meet all your clients’ insurance needs, they’ll have no reason to look elsewhere.
Below are four tips to help you get started with life insurance:
- Add life insurance to your portfolio. Just as it’s important to offer a broad selection of Medicare products, you’ll want to offer a few different life insurance options to meet different needs. Western Asset Protection can help with this! We offer access to life insurance and annuities.
- Update your branding. Once you start selling life insurance, you need to spread the word. Update your website, social media profiles, email signature, and business cards to include life insurance.
- Raise awareness. You can use your website, social media, newsletters and mailers to help educate people on the importance of life insurance. LIMRA has some fantastic materials for Life Insurance Awareness Month, including social media posts that you can download and share. Check out LIMRA’s life insurance resources here.
- Stay compliant. CMS has some strict rules when it comes to cross-selling. These rules do NOT mean that you can’t sell both Medicare and life insurance to a client. However, you won’t be able to sell both products during the same meeting.
CMS rules are detailed and subject to change, so make sure you’re reviewing the current regulations. With that in mind, there are two big rules to keep in mind. First, you need to fill out your Scope of Appointment ahead of each meeting. In most cases, the SOA needs to be completed at least 48 hours in advance, but there are exceptions for walk-ins and the last four days of a special enrollment period. Second, you can’t sell non-health products during a Medicare meeting. This rule means that simply including life insurance in your SOA won’t work. You need to set up an entirely separate appointment.
During your needs assessment, ask questions that will help you uncover your client’s needs for both Medicare and other products. Then, you can mention that you sell other products. If a client is interested in life insurance, set up a separate appointment. Some of your clients may see that you offer life insurance on your website and business cards and take the initiative themselves. Again, always set up a separate appointment.
Do you have any questions about cross-selling life insurance or staying compliant? Western Asset Protection is here to help. Contact us.