Selling Final Expense Insurance

Selling final expense insurance may be the easiest insurance sale for an agent. In recent years, underwriting at insurance company home offices has become less liberal especially for applicants with impaired risks. Traditional term, universal or whole life sales usually involve the following actions prior to collecting a commission.

- scheduling multiple client appointments
- preparing policy illustrations
- writing the application
- submitting the application for underwriting
- scheduling a medical exam
- requesting applicant's medical records
- monitoring underwriting process
- delivering approved policy
- returning delivery requirements to home office

From the time of the first scheduled appointment until commissions are paid to the agent for a traditional policy, 6-10 weeks is not unusual.

The sales process for final expense insurance, however, usually involves fewer steps before a commission is paid.

- scheduling one-call close appointment
- writing application
- completing telephone field underwriting questionnaire
- submitting application to home office for policy issue
- delivering approved policy

With a shorter sales process, the agent is typically paid a commission within 2-3 weeks.

Incidentally, commissions are often larger selling these smaller face amount policies due to the fact that insurance premiums are higher at older ages. An agent can earn the same commission amount selling a $10,000 policy to a senior as compared to selling a $500,000 level term policy to a 30-year old.

Another compelling reason to sell final expense policies is that in most cases seniors are the ones buying them. And seniors typically keep their policies by consistently paying their premiums. Unlike younger policyholders, seniors take the purchase of life insurance more seriously knowing that these policies may be the last ones they will own.

Younger policyholders, on the other hand, may place policy premiums lower on their list of priorities when bill-paying time comes. A prematurely cancelled policy, especially in the first year, requires the agent to return some of the commissions paid by the insurance company. This is known as a charge-back, which every agent wants to avoid.

From a strictly business stand-point, every agent would be wise to include selling final expense insurance in their revenue plan.

Author: John L Thomas