After recruiting more than 3,000 final expense agents since 2013, I’ve learned there’s really 2 strategies to prevent frustrating chargebacks that you can implement immediately.
Here they are:
1. Ensure That You Sell The RIGHT Way!
Newsflash! Final expense prospects change their minds. In fact, after you’re paid, if Mildred cancels her policy within 9 months, you’re on the hook for some portion of the advance commission. This means there is a LOT of time that can pass where you’re exposed to paying back your commission.
This is why it’s vital to sell the right way. How do I mean? If you’re aggressive and push your prospects to buy, you may have more sales but end up with that many more chargebacks. Instead of the aggressive approach, sell consultatively. Ask open-ended questions to uncover the true need and desire for coverage. Offer a premium the client can comfortably afford; do not push the client to buy something out of their budget. In other words, think more about making the sale as opposed to making the most money out of each sale everytime. Ultimately, the more lives we ensure, the more money we make. Remember, it’s about APPtivity!
2. Ensure That You Sell The Right Products!
Many of the woes final expense agents experience with chargebacks originate from the products they choose to sell. Selling overpriced, inferior products leads to higher lapse rates and more chargebacks.
What should you do?
First, be a broker with multiple products. Selling one product has its advantages, but inherently you’re a product-pusher. For years, many one-product-only agents have confessed to me that they’ve lost lots of business by broker agents replacing them based on products with better underwriting terms. What this means is this: if you sold the BEST product the FIRST time… you probably wouldn’t have been replaced, and would have avoided the chargeback altogether.
Second, make sure you’re selling competitively priced products. While you don’t have to be the lowest priced product, the more competitive, the better off you are defending against replacements made on price.