How to Sell Annuities: The Complete Guide
I hear of agents all the time who are selling life insurance, medicare, final expense, etc., and want to learn how to sell annuities. Then there are those who aren’t even currently in the industry but want to get away from their 9 to 5 jobs and start selling these products. Lastly, there are those who are already selling annuities, and simply want to increase what they currently produce.
Wherever you find yourself, this blog will provide valuable information and practical next steps for you to take.
The steps you need to take to sell annuities are as follows:
- Get licensed
- Find a Marketing Organization
- Become an Expert
- Basics of Annuities
- Types of Annuities
- Retirement Accounts
- Taxes and Annuities
- Annuity/Insurance Regulations
- Establishing a Sales Process
- Getting in Front of Clients
- Why “Getting in Front of Clients” is Last
How to Sell Annuities
If you’re currently selling products other than annuities, and you’re concerned about stepping into annuity production, take my story as encouragement.
I started in this business as a life insurance agent selling mortgage protection, and final expense insurance.
Then, in 2008 I cross-sold $5.8 Million in annuity premium. Since then, I’ve continually refined my knowledge and my process, but I haven’t looked back.
In 2009, I fully committed to specializing in annuities. In 2020 alone I sold $26.7 Million in personal annuity production.
Step One: Get Licensed
To sell annuities, you must first obtain a life insurance license in each state that you intend to sell annuities. Each state has its own set of laws and regulations around the different products from life insurance companies (which includes annuities), and each state is governed by the National Association of Insurance Commissioners.
Having a life insurance license will allow you to sell annuities that fall under the “fixed” category of annuities. i.e. Fixed Annuities (Multi-Year Guaranteed Annuities), Fixed Indexed Annuities, Immediate Annuities, Deferred Immediate Annuities, Single Premium Immediate Annuities, Fixed Income Annuities.
Having only a life insurance license in your respective state will NOT allow you to provide financial advisory services for compensation, or to sell variable annuities, securities, mutual funds, or other “risk” products. To offer those services you must obtain the proper securities licenses.
To become a licensed life insurance agent, and sell annuities, you must go to your state’s Department of Insurance website and follow their guidelines. Here is a Directory of each state’s Department of Insurance.
Generally, your state will require that you pass an examination proving your knowledge in the life insurance industry and the different products, features, and laws regarding it. Because there is an exam involved in this process, it’s advised to take a pre-licensing course to sharpen your knowledge of the life insurance industry before taking the exam.
Simply Google “life insurance pre-licensing course” and examine your options.
The next steps are critically important to selling annuities, but without your license, the next steps wouldn’t have any application to you.
Step Two: Find a Marketing Organization
The process of finding a marketing organization (also known as an IMO, FMO, NMO, BGA, MGA, etc.) is very important because you are aligning yourself with a company or individual.
IMO – Independent Marketing Organization
FMO – Field Marketing Organization
NMO – National Marketing Office
BGA – Brokerage General Agent
MGA – Managing General Agent
The relationship between a Marketing Organization and an Agent should be a partnership. That means that if a marketing organization and an agent work together, they should both become more profitable because of the relationship. It should be mutually beneficial.
In today’s world of marketing organizations, it can be challenging to find an IMO or FMO that aligns with your beliefs, the ways that you do business, and that has adequate tools and support to make sure that your practice is as successful as possible.
Because this relationship will drastically affect your business, it’s a decision that you should take seriously. Be methodical, have a set standard of what you want, and don’t chase “shiny objects.”
Some things that you should ask a potential marketing organization follow below:
“What does example organization specialize in?”
Reason: If a marketing organization doesn’t have some kind of niche in which they thrive, they’re likely just trying to throw all their agent’s business to the wall to see what sticks.
“How does example organization practically help me produce more?”
Reason: If they can’t accurately articulate the practical ways that they help you produce more business, then you have to wonder if helping you is actually one of their objectives.
“What kind of resources and tools does example organization offer their agents?”
Reason: Marketing organizations should be providing agents with different resources and tools. Some of these resources and tools include sales training, process training, creative design/branding, plans for leads/marketing, backend support, case design, and ways to track your business, etc.
“How many different carriers do you have?”
Reason: The more carriers a marketing organization has, the less likely they are to push only a few specific carriers/products. Be careful of organizations that push only a handful of products, and don’t take a holistic approach to case design with your clients.
“Do you help with product selection/case design?”
Reason: Marketing organizations should be assisting agents with product selection and case design, and they should be able to explain why they recommend a specific product for your clients. Your reputation rides on your expertise, and product recommendations. If you can’t be sure that you’re promoting the best possible option for your client, your reputation can be at risk. Make sure your marketing organization has your best interest and your client’s best interest in mind when recommending a product to you or helping with case design.
“How am I compensated? From you? Or from the insurance company? What level am I at? Street or higher?”
Reason: Marketing organizations should not try to control their agents by controlling their comp. They should compete for their agent’s business using their tools, resources, and support. Further, ask about your comp. level. Generally, agents should be started at street level, but sometimes if a marketing organization is providing leads to their agents for free, they’ll give them a lower comp. to cover the cost of leads.
“Do you have any testimonials about agents who’ve been able to improve their production with you?”
Reason: If they can’t give you an example of other agents who’ve had substantial success with them, that must not be something they’re concerned about, or they don’t work closely enough with their agents to know.
“Anything else I should know about example organization?”
Reason: This puts them on the spot, sometimes there will be lots of other good information you want to know, but it allows you to hear from them what they want to communicate most clearly to you. Their motives will often come out after this question.
“Would I be a captive agent at example organization?”
Reason: If you are wanting to have the freedom to sell what you want to sell, and make sure that what you sell is best for the client, and you want to be able to be a part of other organizations, steer clear of becoming a captive agent.
If you have specific questions about the IMO/FMO you’re talking to, make sure you ask about those too. This is just a list of the things that we recommend agents inquire about. A Lot of the “heart” of the organization can be easily observed by the answers to these questions.
Some things that you should be wary of when it comes to marketing organizations follow:
– Captive organizations: Generally, captive agents struggle more than non-captive because they can be limited in many different ways.
– Providing you leads for a piece of your comp: Generally, agents who are good producers that give up comp. for their leads end up paying more than agents who purchase their own leads/marketing from third-party companies. Sometimes this model works, but it can be confining.
– Product pushing: Generally, IMOs/FMOs that push a product or two don’t have your client’s best interest at heart. Your focus needs to be finding a solution to a problem, not pushing a marketing organization’s product that gives them the best override. Be careful with this one.
One thing that’s worth noting is that bigger is not always better. The same is true for marketing organizations. If you value a personal relationship with the people you do business with, then don’t just discuss things with a big organization where you’re one out of several thousand. Talk to the smaller organizations where you’re one out of a few hundred, and develop relationships with that team.
The best thing you can do is align yourself with an organization that shares the same values that you have. Remember, the relationship between an agent and the IMO/FMO is a partnership. Both should become more profitable by working with the other.
Step Three: Become an Expert
Becoming a true expert in the annuity industry is time-consuming, but absolutely necessary. There are 7 areas in which you need to be an expert within the annuity industry before you even consider meeting with a client.
7 Overarching Areas of Expertise:
You should have mastery-level knowledge in all of those areas before soliciting an annuity because your clients shouldn’t be considered practice. There are plenty of “sales” industries where you can “practice” your craft with consumers, but the annuity industry isn’t one of them. The magnitude of responsibility that’s assumed by a producing agent is immense, and proper knowledge, training, and mindset should be in place before a sale is ever made. I always say “this affects our client’s retirement far more than it affects ours.”
That said, in the paragraph’s that follow, I’m going to give you tons of information about these 7 overarching areas of expertise, but I strongly recommend you spend ample time researching other places like the NAIC, the IRS, the SSA, Retirement Realized Agents Academy, my other Free Resources, and various insurance companies to see their product offerings.
An annuity is an insurance contract that’s sold by an insurance company. In effect, it’s a financial product that’s purchased either by a lump sum payment (“single premium”), or multiple payments over time (“flexible premium”). There are multiple types of annuities, but the two overarching categories of annuities are “immediate” and “deferred.”
Annuities are commonly used in retirement planning to create an income stream during retirement whether that be through annuitization or an income rider. Annuities are vehicles in which a consumer can in effect create their own type of pension.
Want to fast-track your understanding of annuities? Watch this video of Chad and Caleb giving “A New Take on Simplifying Annuities.”
Types of Annuities
There are different types of annuities for different types of client situations and risk tolerance. It’s important to know the different types of annuities that you are able to sell based on the licensing that you have, as well as the types of situations that each type is most beneficial.
An immediate annuity is generally purchased with a single premium (lump sum contribution) for the purpose of generating an immediate income stream. Generally, control of the money in the immediate annuity is completely transferred to the insurance company, because immediate annuities are commonly annuitized immediately. Hence the name.
A deferred annuity is generally purchased with a single premium (lump sum contribution), however, some products with various insurance companies allow “flexible premium” with a set minimum contribution. Deferred annuities are commonly used for protected accumulation and income generation at a later date.
Fixed vs. Variable Annuities
Another way that annuities are categorized is by their exposure to market downside risk. For example, there are Fixed, Fixed Indexed, and Variable annuities. Both Fixed and Fixed Indexed annuities are protected from downside risk, while Variable annuities are subject to downside risk, and require a securities license to sell (such as the Series 7, or Series 6 and Series 63).
A Fixed Annuity guarantees a minimum interest rate to be credited to the account. A “MYGA,” or “multi-year guaranteed annuity” which is a term commonly used interchangeably with “fixed annuity” is essentially a fixed annuity that has a set surrender schedule and a guaranteed annual interest return. MYGAs are commonly found in 3, 5, 7, and 10 year surrender periods, though other surrender periods exist too. Fixed annuities can either be deferred or immediate. A fixed immediate annuity is immediately annuitized and an income stream is immediately generated. A fixed deferred annuity accumulates or grows for a period of time, and is then annuitized later to generate income payments at a later date. There are also various riders that can be purchased with different Fixed Annuities such as income riders (which allow the annuitant to create guaranteed lifetime income without annuitization), penalty-free withdrawal (which increases the liquidity of an annuity), interest withdrawal (which allows the credited interest growth to be withdrawn), death benefit rider, etc.
For more information about how to explain Fixed Annuities to clients, check out my blog “Fixed Annuities Explained.”
An Indexed Annuity generates growth according to an index strategy selected by your client. For example, an insurance company may have interest credited based on the performance of the S&P 500 or other indices as well. The way they calculate interest to credit the client is based on index performance, and the limiting factors assessed by the insurance company. Caps, Spreads, and Participation Rates (more information below) all “limit” or “set” the amount of return that will be credited to the account based on index performance. Other factors such as an index strategy fee will affect the net credited rate. Indexed annuities essentially give clients the ability to participate in some of the market upsides, while staying protected from the downside. Indexed annuities are commonly deferred annuities, in which a surrender period is in place (commonly 5, 7, 10, or 14 years), and income payments are set to commence at a later date. Various riders can accompany indexed annuities, like lifetime income benefit riders, guaranteed minimum withdrawal benefit riders, long-term care riders, etc. There are other various guarantees that accompany some indexed annuities like penalty-free withdrawals, death benefit features, living benefits, and waiver of surrender charges for certain situations.
A cap on an index strategy essentially sets the “ceiling” of possible credited interest. For example, if the selected index strategy grows at 10% during the crediting period, and the product has a cap of 5%, then the 5% is the most interest that can be credited to the account.
A spread on an index strategy is essentially what the insurance company scrapes off the top. For example, if the selected index strategy grows at 10% during the crediting period, and the product has a 5% spread, then the insurance company takes the first 5%, and leaves a remaining 5% to be credited to the account.
A participation rate on an index strategy is essentially the percentage of index growth that the account participates in. For example, if the selected index strategy grows at 10% during the crediting period, and the product has a 50% participation rate, the account participates in 50% of the 10% growth generating a credited rate of 5% to the account.
For more information about how to explain Indexed Annuities to clients, check out my blog “Indexed Annuities Explained.”
Are we even allowed to discuss Variable Annuities??? A Variable Annuity is an insurance contract, where the owner of the annuity assumes the risk, not the insurance company. Because of that, securities licenses are needed to sell variable annuities. With a Variable Annuity, the owner is able to place funds into different subaccounts of a separate account depending on the risk tolerance of the owner. Various riders can be attached to Variable Annuities, and Variable Annuities can also be annuitized to generate an income stream.
One of the things that I see all the time is agents who try to sell 3-5 different types of insurance products. This can actually hurt agents who do this because it slows them down from becoming true experts in any single area. The agents that I see having the most success are those who specialize in one or two product lines. For example, agents selling life, medicare, health, annuities, etc. will have a hard time being a true expert in any of those areas. It’s best to select one or two areas (ex. life and/or annuities) and become a true expert in one or both areas.
I wrote a whole blog about the importance of specialization. Check it out here!
Product and Carrier Knowledge
Whatever type of product you choose to sell, you have to be an expert in the different insurance companies and products out there. Often times what will happen is agents will become experts in the products that their IMO offers them, but they stop there. Then they go out to an appointment, see another product that another agent showed the client, and they don’t know anything about it. You have to be an expert not only in what you are selling but also in what other agents are selling.
Knowing what the industry as a whole has to offer does two things for you. First, it allows you to know what your competition may be positioning with your clients. Secondly, it allows you to make sure that you are showing your client the best possible product for their situation which is vitally important.
Note: Do NOT product push. Find the problem that your client is facing, and find the BEST product solution for their individual situation.
To find the best carrier and product information, you’ll want to work directly with the insurance companies. Be appointed with different carriers, and look at their materials. Study the products they offer. Make sure you’re part of a marketing organization that will help you find the best product for your client, not just push a product on you. If you’re curious about what a carrier has to offer, and you’re not appointed with them, do one of two things. Either reach out to your marketing organization just call them and candidly explain who you are and what you’re doing. They will work with you because they want you to sell their products.
The bottom line is study, study, study. Know the carriers and products out there, and be a student of them.
FAQ: Should I Only Sell Annuities?
Answer: Generally, I recommend agents stick to one line of business, (sometimes two), but when annuities are involved, I do recommend focusing on them exclusively. My background is in cross-selling life and annuities, but when I realized what annuities could be for my clients, I shifted gears to focus on annuities, and my business took off when I specialized.
One of the things you have to be an expert in as well is Retirement Accounts like IRAs, 401(k)s and Employer Plans, Pensions, and the difference between Non-Qualified and Qualified funds. Don’t let this overwhelm you, it’s not as challenging as it may seem.
It’s important to know the legal ways in which these different retirement accounts are taxed, rolled over, and withdrawn so that you can expertly help your clients when moving a retirement account into an annuity.
There is a lot of great information out there that goes into much deeper detail about these different retirement accounts, but for the sake of this blog, I’m going to give you a high-level overview of them.
An IRA is an “Individual Retirement Arrangement,” which just means that an individual (not an employer) has created this account for the sake of retirement, but the advantage is the tax-deferred growth that is attainable through an IRA.
There are different types of IRAs, and tax implications vary depending on the type of IRA. For example, Roth IRAs utilize after-tax dollars (non-qualified funds) to grow tax-free, whereas Traditional IRAs use either non-qualified or qualified funds to grow tax-deferred.
Because of the tax-deferred status, funds in most IRAs, they are classified as qualified funds which essentially means that the funds in the IRA are going to be subject to taxation upon withdrawal.
When a person starts an annuity, it gets classified as an IRA, and most annuities will allow other types of IRAs (like Roth IRAs) to transfer into them.
401(k) and Employer Plans
401(k) and other Employer plans are typically qualified retirement plans. They can be rolled over into an annuity to create principal protection, and lifetime income, but you have to make sure that the company you’re representing will allow 401(k) rollovers (Or other plans if they apply to the situation).
Pension plans are employer plans that allow former employees to have either a lump-sum retirement payment or a stream of income in retirement. The lump-sum pension can be put into an annuity for the sake of generating a guaranteed lifetime income stream.
If a pension is being paid out as periodic payments, it’s important to understand what the survivorship percentage is on it. That means that if the primary recipient of the pension were to pass away, what percentage of the pension payments would be passed on to the remaining spouse. This is very important to know and plan for when considering a client’s retirement income situation.
Non-Qualified vs Qualified
The terms Non-Qualified and Qualified refer to the tax status of funds. Non-qualified money is “after-tax dollars.” Qualified money is “pre-tax dollars.” The way you can think about it is qualified money is qualified for taxation. This is a very important topic to be an expert on because different retirement accounts that your clients have will be classified differently.
If your client is funding an annuity with qualified money, that client will be subject RMDs (Required Minimum Distributions), which will be taxed. Annuities funded with non-qualified money will not be subject to RMDs, but their gains will be taxed when withdrawn.
Taxes and Annuities
The way taxes and annuities play together is tied directly to their tax status as previously discussed. If the money funding the annuity is qualified, then all of the account plus the gains are subject to taxation upon withdrawal. If the money funding the annuity is non-qualified then just the gains are subject to taxation upon withdrawal. It’s worth noting that annuity withdrawals work using a LIFO (Last In, First Out) system. That means that when an owner makes a withdrawal, it will be the most recent gains first.
Because most annuities get classified as IRAs, the annuity operates with a tax deferral benefit, meaning that an annuity owner’s gains can continue to return more gains without being taxed. Essentially, their tax dollars make them more money. That’s one of the major benefits of annuities, but remember the non-qualified vs. qualified taxation rules.
One of the most important things for you to be an expert on is the different annuity regulations that you and your clients are subject to. While insurance is generally regulated on the state level, there are federal laws that affect the way states are able to regulate as well, so you need to be informed about both.
State Annuity Regulations
The best way for you to get information about state-level annuity regulations is to periodically check your state insurance department or commissioner’s website, as well as your state’s senate and house bills to make sure you’re informed about any changes on the horizon.
For your convenience, here is a link to the Insurance Information Institute Directory of State Insurance Commissioners
A common example of state regulation is that some states will require that a product has a surrender schedule no longer than 10 years, and a surrender fee no greater than 10%. Those states are called 10/10 states.
National Annuity Regulations
The best way for you to get information about Federal-level annuity/insurance regulations is to stay up to date with the publications from the NAIC, and periodically checking the U.S. Senate and House Bills for anything pertaining to the insurance industry.
For your convenience, here is the link to the NAIC.
Establishing a Sales Process
One of the most important things you can do is establish a sales process. This is everything that you say and do to clients. You want to have a flow that you’re bringing clients into. It should be systematic, deliberate, and centered around two things: educating your clients, and doing what’s best for them.
The moment you pick up the phone to call them for the first time, you need to know what you’re going to say, and how you’re going to say it, as well as a destination you’re trying to get to by the end of it.
In appointments, the same thing holds true. Know what you’re going to say, what you’re going to show them, and where you’re trying to get them to.
The best way I know to do this is to give you a glimpse into my process; one that has allowed me to sell multiple hundreds of millions of dollars of annuity premium since 2008.
One of the most critical pieces to success is often the most overlooked….mindset. If your mindset is off, your actions will follow. When I say “mindset,” I’m talking about your inner beliefs about certain things like morals, ethics, your own capabilities, what’s important in business, whose priorities are most important, and the “why” behind the “what.”
For example, if your morals and ethics are skewed, the way you handle illegal, or unethical opportunities for business will follow that skewed mindset. If you doubt your own capabilities, more than likely, the way you actually communicate, run appointments, and talk with clients will reflect that doubt. If you believe that the financial bottom line is the most important thing in business, you will sacrifice other things for it. If you believe your priorities are most important than your client’s, you will do what benefits you more than them. If you don’t have a solid “why,” you will have a hard time pressing on when unmotivated… your mindset on these things is critical.
For me personally, I will not do anything immoral, or unethical. Following the law and doing things properly is a huge conviction of mine. I know beyond any shadow of a doubt that I am an expert, more than capable and qualified to help people protect their money. I believe that relationships are the most important thing in business, not the monetary bottom line. I will not sacrifice what is best for my clients to benefit myself. And my “why,” well that for me is to honor God in everything I do and say, and to advance His Kingdom. All of those core beliefs and principles shape my “mindset,” and you need to examine your own thoughts and ideas in those areas. Have a grounded and solid mindset.
The phone call is going to most commonly be your first point of contact with a client. The phone call is one of the most important parts of the process because there is so much that needs to be conveyed on the phone call in as little time as possible.
Remember, your clients aren’t looking for a new friend (most of the time), they’re looking for an expert to educate them about the safe money options available, and which is best for their situation. The decision to purchase is always theirs, so don’t ever use high-pressure tactics.
Below is a list of things you want to convey on the phone:
- Your expertise
- Your ability to educate them
- You care about their situation
- You are on their side
Note: with the exception of saying “I’m an expert in this area,” I don’t recommend saying those things verbatim. The list above is a list of truths that your clients should be able to interpret about you simply by talking to you.
Below is a list of things you want to gather from them on the phone:
- Any questions they have (and then answer them briefly on the phone)
- Their age, and spouses age
- When they plan to retire
- Their retirement and investment account values
- Emergency funds and savings accounts values
- If they want a plan for living or a plan for dying (income or accumulation)
All of this is nicely complied in what I call my “mini fact-finder.” If you’d like to use it, go to Retirement Realized Agents Academy or call 512-798-3500.
Note: The reason you want to gather this little bit of information over the phone is so that you can have an idea of what product you’re going to recommend to them in the appointment.
And of course, you’ll want to set up the first appointment with them whether that be in person, or virtually. It’s worth noting that with annuities, face-to-face, in-person appointments still have better success rates, and create a better client-agent relationship.
Typically the bulk of your Fact-Finding will be done in the appointment (the section below this), however, if you do your first calls the way I do, you will have a lot of good basic information from the first call that will allow you to go into your appointment with an idea of what best suits the client.
When you’re Fact-Finding you’re going to want to get as much information as you possibly can in as quick a time as possible. Trust me, your clients don’t want to answer 3 pages worth of questions over the course of an hour. They want it quick and easy. I personally use a one-page Fact-Finder in my appointments, and it allows me to get all of the necessary information to make sure that the product I’m recommending is the best possible option for the client.
I have a free document that teaches you how to build a Fact-Finder. You can download it here.
Remember to always look at your client’s worst-case scenario. That means examining their income vs expenses in their retirement and what the income would be for each client if the other spouse were to die. Annuities (specifically FIAs) are unique in that they can generate guaranteed income for life, with the potential for gains without any market risk. Not utilizing them for this purpose would be to miss out on one of the greatest benefits they provide.
Having a well-established appointment process is absolutely essential to getting your clients from point A to point B. Knowing what documents you’re going to go over, and what product you’re representing is absolutely crucial to having success. Generally, you don’t want your appointments to go much longer than an hour, and remember, your client is not looking for another friend. They’re wanting an expert. Build rapport by your expertise on the subject, not just flippantly commenting on photos, cars, and decor.
When I conduct an appointment, I usually take 45 minutes for the first, and approximately 30 minutes for the second. The first appointment is all about education, fact-finding, and product explanation. The second appointment is all about answering questions, and filling out the application when your client understands the product and wants to move forward.
The general flow of my first appointments goes as follows:
1) Explain who I am, and build up my expertise.
2) Explain annuities from a 10,000 foot-view
3) Fact Find
4) Explain how the product(s) work in their situation specifically
5) Answer any questions
6) Leave them with the leave behind kit.
I have a free document designed to help you build an appointment process based on the one I use. Download it here.
Objections are essentially questions or statements that clients may make to try to avoid moving further along and doing business with you. Objections commonly arise out of a lack of confidence in the agent/advisor, or a lack of understanding about the product. It’s important not to assume that an objection is a “no,” but it’s also important to respond to the objection in a way that brings clarity. Realistically, objections that are handled properly can be catalysts to helping your client understand and gain more comfort and confidence, simultaneously catalyzing the deal.
Objection handling is more an art than a science, and one of the key attributes of a good objection handler is relatability. If you develop your relatability, you’ll become a better objection handler because you’ll see where the objection is coming from, and how to relate the response to the individual client.
Don’t assume objections are combative, assume they come up because you missed something, or said something that made them unsure or uneasy. The more you handle objections, the more your responses will become engrained into your mind, and over time they will become much more fluid and smooth.
I recommend practicing objection handling with an employee, family member, or friend to get more fluid and smooth responses engrained. I have a document called 21 Phone Objections where I give 1-2 sentence responses to some of the most common phone objections you’ll face. You can download it here.
One thing you’ll notice over time as you improve your process is that some calls/appointments will have objections, and others won’t. The reason that some don’t have objections arise is that you “pre-handled” them, meaning you explained things in such a way that there was nothing concerning, or unclear about what you presented. This is the end goal for your calls and appointments….get to a point where you are consistently “pre-handling” objections.
Step Four: Getting in Front of Clients
Once you’ve become an expert, it’s time to get in front of people and start helping them with annuities. There are all kinds of ways to get in front of people, and thinking creatively is one of the most important things you can do when prospecting.
The first thing you have to determine is how you want to get connected with people. Do you want to do the prospecting manually, or do you want to outsource it to a lead company? Manual and automated marketing/lead systems are the two overarching ways to get in front of people.
If you decide to go the route of doing your own prospecting, expect a slightly longer ramp-up period before getting connected with qualified individuals, but potentially lower cost. If you decide to use other companies for leads and marketing, things may be faster getting started, but you will pay more.
Personally, I choose to outsource leads and marketing to companies who specialize in it, for a couple of reasons. I know I’m not an expert at it, and frankly, I don’t need to be. The time I save by not doing my own prospecting allows me to spend more time working with clients and specializing in my process as well as the different products and carriers out there so I can stay up to date with product options.
Types of Leads
Annuity leads often get blamed for an agent’s lack of production, and while there are some poor leads out there, most of the time the agent’s process is the reason the leads don’t pan out. If you look for excuses, you’ll find them. If you look for solutions, you’ll find them. I say that as someone who has personally spent hundreds of thousands of dollars testing leads of all “qualities” and talking with agents all over the United States who’ve tried leads too.
There are many different types of leads out there, but typically a “type” of lead is just a way of describing the way a lead is generated. For example, a “Scrubbed Internet Lead” is a lead that was generated via the internet, and the lead company has scrubbed or qualified that lead’s information.
Scrubbed Leads vs. Non-Scrubbed Leads
Scrubbed leads have had their information verified in some way by the lead company selling them. Non-Scrubbed leads have not had their information verified. Keep in mind that a lead company will likely not name a lead “Non-Scrubbed,” but they will typically name a lead as “Scrubbed” because it’s a good marketing term.
Exclusive vs. Shared
Exclusive leads are leads that are given exclusively to one agent or advisor. Shared leads go to multiple agents or advisors. I recommend only using exclusive leads, and frankly, most lead companies are starting to use the exclusive lead model. Generally, exclusive leads will be more expensive, but it’s worth the added cost.
Internet Leads – Leads that have been generated from the internet. Typically a lead company will have a website (or multiple) that provide some kind of information to potential customers, and then have a call to action for the customer to submit their information, and get more of their questions answered, or even get something for free. Once someone has submitted the form, it either goes straight to an agent’s inbox (that’s called a “Straight Internet Lead”), or it will go to the lead company to be further scrubbed and qualified (that’s called a “Scrubbed Internet Lead” or “Qualified Internet Lead”).
Social Media Leads – Leads that have been generated from social media platforms. Typically this occurs when a lead company utilizes social media ads to “offensively market” meaning they are advertising to people who may not necessarily be looking for an annuity, but the ad stimulates interest and then takes them to a website to gather their information which can then either be scrubbed or passed on to the agent or advisor.
Seminar Leads – leads that have been generated via a seminar event. A seminar event is a gathering of potential consumers to listen to an agent or advisor give a presentation on a specific topic of interest. There are different seminar companies who will perform different parts of putting on the event. Seminars have historically been a very common way that agents and advisors prospect for clients.
Radio Leads – leads that have been generated via a radio program. Whether the agent or advisor is the radio show host themselves, or ads are being run on a radio program, it doesn’t matter, they all get classified as radio leads.
There are other types of leads like TV commercial leads, and email marketed leads, but they aren’t as common or as popular as the ones listed above.
Remember that the name of leads is basically a grouping of descriptive words like “Scrubbed,” “Qualified,” or “Exclusive” and then the medium through which they were generated like “Internet,” or “Social Media.”
Selecting Lead Companies
Selecting lead companies to work with is an important part of the process because you’re putting a lot on the line when you test a lead source. There are specific things to look for like their rating, reviews, ease of contact, and how long they’ve been doing business. I always recommend you personally talk with a representative from a lead company you’re considering working with, and ask them questions about how the leads are generated, are they exclusive, how many can be generated in a month, are they scrubbed or qualified, etc.
It’s also important to try to have at least 3 different lead sources at any given time. Truthfully, there isn’t just one lead source that will be the end all be all for you, and lead companies tend to fluctuate in productivity anyway, so make sure you have multiple.
If you’re curious about what I look for in a lead company, here’s a document that I made that explains the 5 most important things to look for in a lead company.
Why “Getting in Front of Clients” is Last
You may be wondering why you had to go all the way to the bottom of this blog to find the information about leads, well it’s simple. It would be a waste of your time and your client’s time to meet with them before you’re an expert. You have to be an expert before you try to solicit annuities, and I wanted to equip you with the knowledge of what you need to be an expert in before I explained marketing and leads.
So now the ball’s in your court, and it’s probably time to study study study. Go back to the top, and take a photo of the list of things you need to be an expert in, then go become the expert. If you want a team of people behind you to assist you in this process, go to Retirement Realized Agents Academy, or Retirement Realized Financial and become a part of our training community or our FMO.
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