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Jennifer Mann, LUTCF, CLU, ChFC, CFP, vice president of the Chicago office of Lenox Advisors and 13-year MDRT member, got into this business 14 years ago because “the overall planning aspect got me excited,” she says. Her practice focuses on professionals in their 20s, 30s and 40s. She works from home most of the time, with 70% to 80% of her work done over the phone, as her clients live all over the country. We talked to her about her practice and path to success. Your clientele skews younger. What do you like about working with this demographic? Relative to what’s considered high-net worth, they aren’t necessarily there yet. They haven’t accumulated as much, but they’re young, and they’re going to be there. Plus, I like getting people early on, before they make too many financial mistakes, and where you’re building a relationship for the future. They’ll be clients for life, and you’ll grow with them. Where does life insurance come in? In the protection component; that’s when we start talking about it, but it also flows over into the retirement too. I do a lot of whole life, and while the primary purpose for insurance protection is the need for a death benefit, there are many supplemental uses for this great product as well. Do you layer in term as well? Yes, definitely. I typically talk about the four phases of life that life insurance can help you with. Phase one: I have a family and want to make sure they’re taken care of if something happens to me. Phase two: I’m starting to make some money, so I’m sensitive to taxes. Phase three: I’m in retirement, and I’d like the option for some tax-free income. And phase four: Whatever I haven’t spent, I’d like to pass on to whomever or whatever organization I choose versus Uncle Sam. People may be in multiple phases at once or may skip a phase all together. But that’s how I start the conversation. My strategy is to first help them get the right amount of coverage and then the right structure as quickly as possible. We start with term and convert as appropriate. Millennials often get a bad rap. What’s been your experience working with them? Younger people saw what happened in 2008 and even again in 2010, and are more fearful of the market. They like the safety of life insurance, and want more guidance on the investment side. I also find Millennials are asking more questions. From their perspective, they’re proud of doing research, asking questions and, honestly, not using “dad’s guy.” The feel like their parents’ advisor is helping them as a favor, because of how little money they have. Millennials want to be more hands on. They want to learn and not accept “this is how we do it.” What objections do you hear when it comes to getting life insurance coverage, and how do you address them? The biggest objection is the amount. $1 million sounds like a ton of money to people, but with younger clients, they’ve never thought about what that means. They say, “I would pay off my mortgage,” but that may or may not be the best thing for them to do. Or, they say, “My family would help,” but they don’t take into account a host of other things. The other objection I hear is the premium. Again, they say, “My family would take care of us.” Or they’ve heard, “Buy term invest the difference,” so they’re anti permanent insurance. But once we start looking at the numbers, a lot of times that’s overcome. What are the biggest mistakes you see fellow agents and advisors making? For new advisors, it’s not doing joint work. Half of something is better than all of nothing. I did almost exclusively joint work my first two years, and that helped. I worked with multiple people so I could learn different styles and philosophies. Also, some are afraid to prospect until they “know their stuff,” because they don’t want to look bad in front of friends and family and people they don’t know. But the reality is, you can always bring someone in to help with the product knowledge, but if you have no one to see, you have no business. What can they do to improve their business or better serve their clients and prospects? Become involved in organizations like MDRT where they are continuously learning and improving their minds, their craft and their business. And then, implement what you learn. If you‘re going to stay in this business, love what you do and care about your clients. Your sincerity shows through and that’s how you build relationships.
Aurora Tancock, CFP, FLMI, AIAA, president of Aurora Tancock Financial Services and 15-year MDRT member, says that what she does is “a calling.” She does financial planning, taking into account both the wealth side and the risk side. She takes a holistic approach with her clients, many of whom are 45+, including finding out what makes them tick. Let’s find out why. How do you bring life insurance into your client meetings? When I first meet with clients we look at their overall current financial situation including existing life insurance, and then look at what their needs are. Of course, everyone wants to talk about the wealth side of things. But I make sure that they consider the risk management side and I ask them, “What if something should happen? Is your family protected? Would your spouse be able to stay in the house?” With younger clients, I look at cash flow—where is the money you’re bringing in going? How much is paying down debt, or education costs for the kids, etc.? I make sure to ask, “Even if the mortgage is paid off, would the other spouse be able to stay in the house, based on one income?” And they truly don’t know. So we go back to the cash flow before death: What are the costs before death? Some expenses will go down, but a lot of others won’t, like property taxes and utilities. So they really should cover the income—without the mortgage—with life insurance until the kids are no longer dependent. You help clients with retirement. How do you view it? There are three stages. The first is the active stage. During the first 10 to 15 years, they are probably going to spend more money because they are more active. The second is the passive stage, where they probably won’t spend as much, because they aren’t going as many places. And then there is the third, or unknown stage, because there may be health issues or they may want to go into a retirement home. That’s also where permanent life insurance can come in. They can put the money for the third, unknown stage into permanent life insurance. Because if they get to that third stage and need some money, they can access the cash value, and if they don’t need it, it means the heirs will end up with more money. What are the objections you hear? And how do you counter them? The objections tend to be from younger clients—in their 20s and 30s. They don’t think anything will happen to them. Helping them understand cash flow really helps. If they say they don’t need life insurance, I say, “OK, then what are you going to cut out if something should happen?” And sometimes the husband will say, “She won’t stay in this house.” That comes up quite a bit. And I say, “Do you want her to make that decision right away? Do you want her and the kids to have time to properly mourn you before they’d have to make a big change in their life like that?” And the truth is, this isn’t the husband being “insensitive”. Men are much more willing to sell the house, whereas most women wouldn’t want to. Also, some of it has to do with educating them on how low the premiums are for term insurance. When you tell them the actual cost, they’re surprised. You say, “A well customized financial plan is much more than a roadmap to your financial future. It’s a roadmap to your life.” How so? It’s not just about the money side of it, it’s what they are trying to achieve for their life. I spend a lot of time with the soft facts, finding out who they are and what’s important to them. The one question I ask when I’m meeting with a client is: “What keeps you up at night? Is it too much debt? Are you stressed out at work?” I try to get to know where their head is and then plan—not just for retirement—but for the short term, and then for five years and above. I have them visualize what they are trying to achieve—what they want to do with their money, and what are the goalposts along the way. It could be education or a dream trip overseas, for example. And then I have them attach a date to achieving that. It’s not just about net worth but what that money is going to do for them—and then holding them accountable. I see my clients at least once a year, and keep them on track. What can agents and advisors do to improve their business or better serve their clients and prospects? They need to do financial planning for every client, some more in depth than others depending on life stage—how can we come up with the amount of insurance needed, if we don’t know the whole picture? That, and staying in touch with clients, as things change a lot.