so i've been asked recently to give an
explanation to final expense agents how
pre-need
insurance works and what a final expense
agent
could do possibly to combat against the
risk
of a uh pre-need policy being sold
instead of the final expense plan
my name is david dewford owner of deford
insurance group
right train and recruit agents
nationally to sell things like final
expense medicare and annuities both face
to face and over the phone
so this question kind of came up here a
couple of times in the last week i
actually had an agent that
didn't make a sale because the client
decided to go to
a funeral home and do a premie plan and
i had some agents kind of asking kind of
following up what does all this pre-need
stuff mean and how
can we sell against that so in case
you're new let me explain to you what
pre-need is
how it works what the benefits are
relative to final expense plans
so pre-need plans are life insurance
plans they're sold by life insurance
companies
but their specialty type life insurance
plans that are sold typically through
funeral directors or funeral homes and
the concept is very simple
these are what's called paid up type
plans they may pay up in a single
premium payment they may pay up over the
course of many years up to 10 years
is the maximal extent and in exchange
for making those payments
the certain parts not all of the parts
of the funeral
or the service or whatever it is the
clients buying are locked in place
they don't have a price increase and
then also there's the insurance
portion of the policy that of course
covers the client
if they happen to die earlier than when
the policy is paid up
this is a strategy that combats against
the ever increasing
pricing of funerals the inflationary
aspect which is tremendously high even
higher than
the producer price index or generic or
this the basket of goods
on average so it's a great seller for a
lot of people that prefer to do business
with the funeral home
but of course those people might also be
interested in final expense
and what can you do as an agent to
combat against the potential
of dealing with something like a
pre-need competitor
taking your client from you well first
thing is this i will argue
that the vast majority of times you're
truly working the final expense market
that a pre-need policy simply is not
going to be an issue even though there
are benefits to a pre-need plan you can
pay it up
you can lock it in with a particular
funeral home actually it's a life
insurance policy so it's portable
between different funeral homes
the thing is is that the the biggest
reason why
it's not a comp a competitive thing that
we should really be concerned with the
vast majority of time
is simply because of the price that it
takes
to get this pre-need plan compared to
what we could do for final expenses so
i'll give you a perfect example i have
on many opportunities sat down with
final expense prospects and again true
final expense prospects
very low fixed incomes disability
retired
little to no savings whatsoever and they
have expressed
an interest in going to the funeral home
and
starting up their plans there as
something also that they're considering
my rebuttal to that or or conversation
typically switches and involves asking
questions such as
well do you have any idea of what those
plans run
and they usually say no and i'll say
well if you go get a
plan that costs you know that maybe run
five to ten years to cover your funeral
you're looking at roughly and it's going
to depend on your age but roughly 150 to
250 a month is that something that you
could even afford
nine out of ten times they throw their
hands up and say no
uh i don't even make you know four times
that much a month much less
i can afford something like that that's
crazy when i hear that from a client
i've effectively uh dismantled the
pre-need objection that you would
otherwise hear
it's not a problem anymore because they
have financially decided for themselves
it's well out of reach okay and so what
will happen is of course our products
are better because
our clients need something that's easily
affordable
and a final expense live pay plan that
we sell 99 of the time is way better for
the
budgetary purposes of the client than a
paid up plan even though you could argue
the benefits
what good is it if you can't afford it
right and that's ultimately what it
comes down to
with our final expense prospects you got
to be able to explain to them
pre-need is great but it comes at a high
price and get rid of it by simply asking
is that even in your budget
and if they're a true prospect they're
going to say no way what do you got
because i can't even touch that
whereas sometimes you'll get people who
are not final expense prospects but will
get them
on a lead because sometimes people fill
out leads for all sorts of crazy reasons
who knows why
but occasionally we'll come across
people that aren't your typical final
expense prospect
and they'll express an interest in going
to the funeral home and if that's the
case and
you tell them the pros and the cons and
they're still not disturbed
they don't want to leave a legacy behind
they don't believe in life insurance
ownership for any other
unexpected expenses i believe you either
haven't built the value well enough or
more likely if you say
an asian mind that follows my script
they're not a prospect
we as agents in deford insurance group
that sell final expense we have five
criteria
to determine if a prospect is qualified
or they're not qualified
and it's need and want do they need this
plan
do they want that plan do they have the
health that's easy
health doesn't really matter do they
have a bank account we can draft or
direct express card and do they have a
budget they 100
agree to if out of those five even just
one
one of those they don't comply with they
are now officially unqualified
they are a suspect they are a low odds
opportunity and we want to leave we
don't want to do business with them
the likelihood is next to nothing that
we will so why spend another minute
there it's my
rationale i teach to my agents so when
it comes to pre-need plans if
the need or the desire is not on what we
do after explaining some basics of it
explaining and comparing and contrasting
with the pre-need and they just don't
seem
interested guess what they're not it's
time to hang up with that prospect
leave the house with that prospect and
go find somebody that actually
appreciates what you do
there's no use in wasting excess time
with an unqualified prospect and many
times people who
aren't deterred by the extreme cost of a
pre-need plan just
they're not prospects they're prospects
for pre-need maybe the prospects for
annuities med stuffs medicare
i get it then maybe you can sell
something else but if you're
a specialist in final expense like i am
and that's all you sell
as a personal producer then that means
the show's over and i need to leave
so i hope that gives you some
perspective on how to deal with pre-need
it won't happen that much especially if
you set this
up in terms of the cost and whether or
not they can afford it
if you like this kind of training if you
think this is great
wait till you join my agency because i
do this kind of style
and detail of training every single day
live with all of my agents that want to
join certainly we have
all the training you need in forms of
scripts real life sales calls
analysis carrier training lead training
etc everything you need as an aspiring
final expense producer
to master this business in a short
period of time so you can go out and
take your license and actually do
something with it and help people
who really need their help so if you're
interested in possibly joining my
organization you want to learn more
there should be links somewhere up and
around here but certainly below as well
click that link it will take you to my
faq page you'll learn more about how my
agency works there
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questions and comments
when i see them thank you so much for
watching david ford logging off
see you next time bye