Episode 91: The Business of Life with Scott Foster and Steve Cannon

into it. All right, that way I got that done. I forgot one time before, and I promised myself I'd never do that again. Well, so guys, since the last time that we chatted, the podcast has grown probably a hundredfold. Okay, we went from, we went from a few hundred downloads to several thousand a month now at this point. So it's going to be great to, to have another conversation with you guys. Um, from my perspective, before we get, um, started, certainly there's going to be a lot for us to talk about from the last time that we chatted. It was early 2020, so a heck of a lot's happened in a year and a half, uh, both from, uh, from an environmental perspective just what's going on nationally, companies, agents' offices, et cetera. So I'm sure we'll dig into all that. But I also want to know what are some of the— I want to make sure I tee you guys up to talk about some things that are very important and kind of some of the things you guys are doing. So maybe, Scott, why don't you— and what I'll try to do as we did last time is make sure that I kind of point or tee one of you up to talk so that we're not talking over each other. But Scott, what are just a couple things that you want to make sure we touch on today in the podcast?

Well, we have developed because of COVID and in spite of COVID we did a series, we've actually done 2 series with State Farm Corporate, a series of 6 2-hour meetings virtually. And because of COVID we have not had live meetings. However, we are planning planning 3 live meetings in January, one in Atlanta, one in West Palm, and one in Charleston, South Carolina. So we might wanna mention that while we're talking, Bradley.

Well, what I will do for you guys, okay, just so you know, I'm gonna do this for you two because of that, and I'm grateful for both of you, is we record, I've recorded about, I've got about 14 episodes in the hopper, meaning I've recorded 'em, they're done, So that means that we were pushing episodes into late March. But what I'm going to do with my podcast engineer, um, Russ— I'll send this to Courtney, my assistant, so she knows this too— is when we record this, we're gonna put— we'll, we'll get him to, to edit your episode, uh, first and get you guys to drop maybe second week of January to do it for you guys instead of waiting until late March. Does that sound good?

Super. Yeah, cool.

Awesome. All right, that'd be great. That'd be a good way to kick off the year too, for sure.

Yeah, awesome.

Uh, Steve, anything else you want to add to that before we get rocking and rolling?

No, I think, you know, we just— we're trying to get back to some kind of normalcy looking forward because, uh, we've kind of been shut down for 2 years. First year we started this, we did about 5 or 6 live seminars around the country, and it went well. So, but today I think 2 things. Scott's going to hit on term conversions, and I'm going to talk about business insurance. And I think these are 2 areas where we as agents have to dial into to be able to sell more permanent cash value life insurance and sell bigger premiums. And so I think that's what this is going to be available. I think for the 6 sessions I do, and I won't get to do the whole thing, I'll do about half of it because we only have 30 minutes apiece, but, but, uh, we can whet your appetite, you know, come back for more. This is really where, where you get the— you really get the premiums. That's where I've gotten up. I'm gonna do $300,000 this year. And most of it comes in business insurance. Yeah. Yep. Yep. Yep.

Okay. Awesome. Awesome. That's great. Russ, you got anything before we rock and roll?

Uh, I'm assuming that you got the PowerPoint.

I've got the PowerPoint.

Yep. Okay.

Right here.

Okay, good. So, um, I guess you're going to click through that. Steve and Scott use some very subtle comments like, as you'll see on the next slide, you know, they do like that so we know when to advance.

Mm-hmm.

So yeah, good cues.

They have subtle cues.

Yep. Uh, let me see if I can share.

There you go.

Yep.

And you probably want to go into presentation mode.

Yep. Let me reshare the screen here.

All right, I'm gonna go silent on you, Bradley. I monitor in case something goes wrong.

So, yep, sounds good.

That's a bad way to say it, but you know, we got it.

All right, here we go, guys. Let's rock and roll. Y'all ready to get started? Ready. All right. Scott Foster and Steve Cannon, welcome back to the Club Capital Leadership Podcast.

Glad to be back.

Thank you.

Super great to have you. So we always start with background and origin story, but we're not going to do that today because many of our listeners have already listened to the first podcast we did with you guys, which we will make sure that we put in the show notes and for people to go back and listen to that. But boy, a lot has happened in the last year and a half or so since you guys last came on. So Scott, I just want to turn it over to you to first and just to talk about the things that you have seen yourself, but also with speaking to other insurance agents the past almost 2 years since, since COVID happened. And how things have evolved and really ultimately what's the opportunity that you see out there in the marketplace?

Thank you, Riley. I see a lot of opportunity. I think, uh, we don't know why, but I think in the last 18 months people have been much more cognizant. Maybe it's because of COVID much more conscious of getting their affairs in order, making sure that their financial affairs are where they want them to be. And I think we are at a very good spot, very good place to work the financial services market. What I wanted to share today is talking about a system. You know, we all have systems. We all have systems, some that work and some of them that are broken. But what I wanted to talk about is a system that I use, and I'm going to give you sort of a menu of different things that we used in our agency as an ongoing system to get to the life insurance needs, and particularly to get to larger cases and larger premium cases through permanent life insurance. So if we go to the first slide, it says current life policies, and what we did, and is we worked consistently, and basically we had enough life policies on the books that it took us about 2 years to get through touching these people. So there are several systems. One would be to review the current life protection, go through the current policies, run a list, and this is pointed toward today running a list of term policies And particularly people that the term is expiring within the next 3 years, if it's in the 17th, 18th, 19th, or 20th year, if it's a 20-year term, and if they're 50 and older. And the reason for 50 and older is because when that policy renews, when it expires or renews, whatever you want to say, it's going to go sky high. We also worked consistently guaranteed insurability options. I think so many times agents put those options out there and then they let them come and go. Well, we actively contacted the people, let them know they had an option pending change and needed to look at that. We consistently looked at their current universal life policies to see if they wanted to bump that up to keep up with inflation or keep up with their family personal needs or their business needs. But what we want to go to today is number 6 on this list, term conversion credit list. And we didn't work just the credit list, we worked number 2 and number 6, the list of term expiring in the last 3 years of that term, as well as the term convert credit list. You know, it's a way to multi-line. If you're a multi-line agent, it's a way to qualify for MDRT consistently. We have systems for writing auto and property casualty, but we seem to not really set down a system for converting term or working with our present policyholders and going back to them to have other appointments and other needs analysis. So if we go to the next slide, one of the first things that I have found is keep this in mind, that you're the professional. You know more about this than the customer does. The customer has had hearsay about term insurance. They've heard buy term, invest the difference. They've heard all of these other reasons to buy term insurance. It's cheaper than permanent, such as that. But we know that they're misnomers. They're not the truth. They're not the big picture. I think the second thing is you need to look at what you have on your own life. We tend to own what we sell. We tend to look at your own checkbook And our behaviors follow our beliefs. So if you don't understand it and don't believe in it, you won't tend to show it and sell it. Have a plan. Here we are at the first of the year. You got a whole year ahead of you to qualify for whatever level you want to qualify for. MDRT, Exotic, Exotic Plus, whatever level that is. Break it down over the next— and I would say break it over 11 months so that you've got it zipped up and tied and not having to push, push, push unless it's to just get to a larger, higher level, not have to push the month of December. So you want— and when you're talking about the difference in term and permanent, and I'm going to go through some things that you can use, these slides that you can use. The first thing you want to do is get the customer away from thinking short term. You want them to think long term. One of the questions that I always ask, and I would always tell them, "What that question I'm fixing to ask you, you're probably going to look at me like I have two heads." But the question is, do you want your life insurance in force When you die. And I then quickly liken it, this is like saying, do you want your car insurance in force if you have a wreck? Or do you want your home insurance in force if you have a fire? Of course you do. So you're steering them, but I've very seldom had anybody to say no. Whether they have term or whether they have permanent, They're thinking they want it in force when they die. So if we go to the next slide, you want to educate them a little bit. And I educate them by saying insurance companies are notorious for statistics. For example, if you're a healthy 35-year-old male, they know that out of 1,000 healthy 35-year-old males, 2 of them will die at age 35. But then they use another thing to predict mortality called a mortality table or an actuarial table. And if you go to that same age 35 and you look down there to the male age 35, and people will always look with you. If you're talking to a 42-year-old, his eyes will go to 42. They want to know, what do the insurance companies think if I'm a healthy 42-year-old male or whatever, what do they think my life expectancy is? So you're engaging them. And as I said before, people learn in two ways. They learn verbally and they learn visually. And so this is the reason that you want to use these visuals as you're talking to them verbally. You don't know, you may be talking to a husband and wife, you may be talking to two partners in a business. One may be a verbal learner, one may be a visual learner. So you want to be prepared to communicate the best you can, the best they want to be communicated with. So if we go to the next slide, again, you're getting them away from thinking 20 years for a 20-year term or even 30 years for a 30-year term. And this sounds a little facetious, but if they've got any sense of humor, they'll follow you. The logic of life insurance is virtually irrefutable. If you don't die before age 65, you will die after age 65. Probability of dying is 100%, and when you die, there'll be a need for cash. So why not let the event that creates the problem also be the event that creates the resolution or the solution to the problem? Life insurance provides a death benefit for your family to fall back on and there's that word— when you die, not if you die in the next 10, 15, or 20 years, but when you die. And it may also provide cash or living benefits during your lifetime. The next slide is, again, a visual to quickly— because even though a person will tell you, "Yeah, I will get with you," and I'll spend 30 or 45 minutes with you, People are busy. People are in a hurry. So this is for the person that thinks he knows the answers before you tell him what you're going to share with him. But it also brings them up to speed on the main 4 differences in term and permanent. And you point out that the main advantage, in fact, the only advantage of term is in that top left-hand corner, low cost initially. So you don't spend much time on that slide, but you do want to spend enough time to lead to the next slide. The next slide points out all of the attributes and it postures permanent insurance. And I'm going to go through this in the next few minutes. It postures it as a foundation to go along with their other assets as an asset class. But it's a very unique asset class, and everybody knows they pay premiums on term insurance, permanent insurance, auto insurance, fire insurance. So don't shy away from the word premium. Premium, which provides both protection from risk and the accumulation of cash value. Term doesn't have accumulation of cash value. A return on your money. Easy access to your money. May minimize taxes on both the accumulation and the distribution. Minimize the potential loss of money. We're going to show that it's not tied to the market, not tied to the real estate market either. What other product, when you go through these bullet points, what other product meets all these criteria, all of these criteria, and is a helpful strategy? So again, you go to the next slide, and you don't want to ask all of these questions on the next slide, but one of the questions is one I've already asked you. How much permanent life insurance do you own on your life? You need to own it to sell it. Your checkbook. What is your checkbook writing the check for? If it's writing checks for term insurance, then that means you believe in term insurance. How much total life insurance do you own? MDRD did a study several years ago, and we tend to sell a multiple, 10 to 12 times multiple per year of the total life insurance that we— less than 1% of all term insurance policies results in a death claim. And I'll show you a study that they did later on where they came up with this. So you want to emphasize that the real value, the real value of permanent life insurance is only seen in the later years when you get old as me. And term is renting, permanent is buying. And the regret, the regret of buying term insurance is not seen until the later years. So if somebody And through my career, you wouldn't believe how many times I've had people that bought term insurance through other companies, and they were never pointed out and shown, here's what this thing's going to go to at the 21st or the 31st year on the renewal, whatever it is. If we go to the next slide, keep in mind, as you start talking to people about term and permanent, most people do have group life insurance, and they do depend on that partially, or maybe too much, and they don't realize, or they don't stop and think about that it's term insurance. So you want to bring that to their, to their sights. The number one reason that people don't buy permanent is because they don't understand it. So you want to educate yourself, and you're educating your client. If you go out there and Google medical economics or FDIC.com, and it will explain— and you don't want to get into this too deep unless they lend themselves getting into this— but Tier 1 capital. But this explains why banks own a large amount of permanent insurance. The cash value is considered Tier 1 capital, which is very, very safe. Another one you can Google is Are You As Dumb as Ben Bernanke? Another book along these lines is The Banker's Secret to Permanent Family Wealth. That's a good book to read. So if we go to the next slide, here again, this is a visual. And it's asking which kind of term should you buy. So it's posturing permanent as just another type of term insurance. It is, but it's for the term owned through their life expectancy. And if you look at the red lines on this chart, this chart's what happens with term insurance. As you get older, Again, it's a visual so they can quickly see that at age 75, per $100,000 is much more expensive than at age 25 or 30. Whereas the blue lines shows not only that the premium will remain level, but if you use dividends to offset that premium, it could work like that lower blue line. And actually get lower. So again, all you're doing is trying to get their attention by using visuals and going through them piece by piece. If we go to the next slide, this is where we got that— they actually did a study. Penn State University on the next slide talks about Arthur L. Williams, who did a study way back in 1993, and he studied 20,000 term policies. He did 1-year term, 5-year term, 10-year, 20-year term. And I usually point out the very last bullet point on this, that out of all those policies, they found that only 1% of all term insurance remained in force. And I tell the client, I said, this is like me coming to you with an investment, and I told you it's a very good investment, but you had a 99% chance of losing all your money. Now what would you think about that investment? And that's posturing what happens with term insurance. If only 1%— and the only way you're going to get any money out of term insurance is to die— and only 1% of all term insurance results in a death claim. Another thing that you want to plant the seed is after age 65, why would they need permanent insurance? Why would they need life insurance? Many people think, well, my children are grown, my house is paid for, I'm out of debt, why would I need it? And statistics show that Longevity now is, is another 20, 25 years plus after age 65. So if we go to the next slide, uh, the probability of surviving beyond age 90 shows us this. So let's say you have a male age 70 that dies at age 70 and leaves a widow at age 70. Almost 50%, 46 out of every 100 of those widows will live beyond 90, another 20 years, and they'll need income. And there will be inflation, and the income can only come from several places: assets already in the bank account, assets already in their asset allocation, or permanent life insurance. So this is another reason to get them away and educating them on the probabilities. And you want to go to the next slide. You want to always focus on the long-term value and don't get into cash value and comparing cash value. Certainly don't compare cash value to mutual funds and other types of investment instruments. You want to emphasize that it's the type of policies that's designed for lifetime affordability, that it doesn't go up. Uh, even though the initial premium might be a little higher than a 30-year term, it's designed to go beyond 30 years and their life expectancy. But because that higher premium generates long-term value, you want to look at the internal rate of return. In other words, what they put into it over the number of years compared to what they would get back if they were to cash surrender it. Because of the cash value, it grows tax-deferred, and it's worth more many times than a taxable return. For example, last bullet point, in a 30% combined state and federal tax bracket, the return at 3.5% inside of a permanent policy is comparable to before taxes. They have to get 5%, 5.1%, 5.2%. So if we go to the next slide, you're posturing it as a product that will bring cash when they need it upon death, and you're also posturing it as an asset, as a different asset class. Whether it's term or permanent, the benefits offered by both are not impacted by market conditions. In other words, if the market's up or if the market's down, it does not correlate at all with the market. It doesn't correlate with the real estate market. This makes sure, and you can be confident that will fulfill the promise to the beneficiary when they need it the most. And it will be a set amount, and it possibly can be arranged to be estate tax-free, and it's always income tax-free. And that's significant when you get into looking at passing things like their 401(k) or their IRA to their family, and even real estate. Real estate is not liquid, so they've got to liquidate that real estate to get income from it. A real quick comparison, if we go to the next slide, it's comparing, and we want to make sure that term, they understand, is only protection. So for lifetime needs, you need more than what term can do, but Why the big difference in the price? And one of the very obvious reasons is if you look at the probability of death within a certain period of time. So a male age 33 with a 20-year term, in that 20 years, the probability of that male age 33 dying before age 53 is only 5%. So you consider these statistics, and that helps explain, again, the difference in the cost of term and permanent. So let's go to a broader view on the next slide. If we look at a broader view, and we'll, we'll again look at a male age 33, let's say a healthy male age 33, and, and you consider again life expectancy. But, but if we look at just a 5% chance over the next 20 years and only a 10% chance 30 years, there again it emphasizes why it's so inexpensive during that time. So if you take an example of $1 million, age 33, uh, and you look at the cumulative— this is the total of all of the premiums to life expectancy, that person has put in $690,000 to get no cash back. That's expensive. That's expensive coverage. If we go to the next slide, it just sort of relates to age 33, 43, 53. So 33, we've already said, is $1,000,000 of protection is $690,000 put in total premiums. 43— why is 43 more? Well, we're still looking at life expectancy, but they started it 10 years later, so they're paying more premiums. Why is 53 less? They're paying more premiums, but there's less time to life expectancy. So you got to be sure you understand that to explain it to them. Otherwise, you're going to lose them on this slide. So the long-term perspective gives us new insights into why term insurance, as important as it is for short-term protection, is neither mathematically nor actuarially designed for over a long period of time, especially if you live through and beyond life expectancy. Keep in mind, on that mortality table where it says a male age 35's life expectancy is 78, what that really means is half of the healthy 35-year-olds have died by 78, but half of them are still alive past age 78. So sort of pulling it together, if we go to the next slide. As it says, only in the last few years have life insurance companies recognized and appreciated and put out on the table that permanent life insurance is a unique type of asset. It, it doesn't— it's not sexy. It doesn't have a 3-year, 3 letter, stock abbreviation, or front door like a piece of property would, but it's an asset that is uncorrelated. That means it's not, it's not related to those ups and downs of the market and therefore may provide financial balance when the economy may or may not be where they want it to be. So if you define— go a little deeper on the next slide and define what we mean by asset. An asset is a resource with economic value, and permanent insurance does, that an individual, corporation, or country owns or controls with the expectations that it will provide a future benefit. The death benefit is a cash asset that can help a family by replacing lost income in the event of death of the breadwinner. And the cash value asset is tied closely to what we would consider a bond or CD or a fixed income asset. It's very conservative. So if you go to the next slide, life insurance complements those other assets, whether it's death benefit or the cash value. It can complement the existing portfolio of assets. You want to emphasize that this is not to replace those other things. It's not to take away from those other things. And as we accumulate other assets, life insurance can help provide protection that may offset or reduce the impact of risk. What is the risk? Risk is the exposures to chances of loss. What are these chances of loss? Loss of income, loss of assets. And it's when this protection asset is combined with their mutual funds and their stock portfolio, and we get it fully deployed, and we have a good array where they can live— and there's the word that you want to get them to— they live confidently that if something happened too soon, or if they live too long, they have assets to fall back on. Another thing is that it can be funded affordably with periodic payments. People like periodic payments. So you're not taking anything off the table and you're not slipping up on them. You're saying, here's how we can fund this. And over time, the accumulated account values— and this is the cash values— can be assessed to provide living benefits. And then finally, you want to emphasize waiver premium. If they're putting money into it, into a whole life policy, and they became disabled, it's self-completing. So don't leave that out. You never know what their hot button will be. So if we go to the next slide, the overall appeal you need to keep in mind and reiterate is the protection, the overall financial security over the long run. That's what you want to continue to hammer, and all you're doing is comparing it to term insurance, which doesn't do that as effectively and as cost-effectively over the long run. So it's for these reasons that you view it as a very unique but a very valuable asset. Again, in wrapping up on the last slide, focus on the long-term value. Long-term, it'll beat term, invest the difference every time. Short-term, term insurance will, will, will show better. So put the net cost, what they put into term to age 78, to life expectancy, and what they would put into permanent to life expectancy as compared to the cash value, which we know term is none. Permanent cash value offsets and causes a lower net cost to have the protection. So that's what I wanted to share with y'all this afternoon. I think Steve's going to take us deeper into another way, but if you'll use this and compare term and show term, what we call term conversions, Uh, you'll, you'll get a certain percentage of people that will get it, and it can lead to qualifying for exotic MDRT-level production. And, and here's the other thing: they understand it, they'll keep it, and it's fun. So let me, um, turn it back over to you, Bradley, and then we'll, we'll turn it over to Steve.

Where do you think somebody should start? I mean, they're listening to this. We're dropping it, uh, first part of 2022. Someone has listened to everything you said, watched this, uh, video on our YouTube channel. They want to get started. What's the one place for them to go? You know, sometimes we don't have to get the anchor all the way in the boat. We just got to get it a quarter of an inch off the bottom in order to make forward progress. Somebody wants to, to have their best year yet. We've been kind of having that as a theme, um, where should they begin?

I, I would start with your term policies. Run a list of them, uh, look at the birth dates because that's a good time to approach them before their birth dates. Especially look at those terms that are in the last 3 years before their renewal. That would be 7, 8, 9, 10 on a 10-year term, 17 through 20, year 20 on a 20-year term. And those are the ones I'd go after first. Um, again, try to line them up according to birth dates, because we know at age change, if they wait till after age change is gonna cost more than they do before age change. So that's the way I would posture it. And, and that's ex— and I would call them myself. Don't leave it, leave it up to a telephoner. It's important enough. It's just as if you were a doctor and you looked at somebody's test results. They came in and had some tests, and the nurse called and said, whenever you get a chance, give us a call. We want to go over your test results. As opposed to if you got a voicemail, this is Dr. So-and-so, and we need to talk to you right away about your test results. So you want to make it a sense of urgency, some importance. And by posturing it that way, you have a better chance of getting a face-to-face interview. It's very difficult to convert the term over the phone. And even on a Zoom call, it's not as effective as face-to-face. But that's what I would work first and consistently. My last year in production, I qualified for MDRT and exotic doing nothing but term conversions. It was a lot of fun because you're meeting with your own board customers, people you already have a relationship with, and it's fun.

Yeah, they have no like and trust factor with you already, so you don't have to overcome that.

That's right, that's right.

All right, Steve, turn it over to you, my friend.

Okay, well, glad to be with y'all this afternoon. Um, We go, uh, pull up— what I'm going to talk to you about today is really, uh, marketing to business owners. And so many times, and, and that I've been able to experience and see with other, other agents, is that we don't take advantage of the business owners, and we don't know what questions to ask, and we don't know how to approach business owners. And I've always said that we're hired by the questions we ask. So we have to ask the right questions. And the first thing I would do is we go on to that first slide is think about every business owner out there. You know, well, first thing we're going to talk about is succession planning on the next slide. Um, is let's talk about Most business owners, they won't— you know, if you go and sit down and write out your top 25 business owners that you have in your, in your business, in your agency, just think about that. Go make a list, and I'm going to give you some questions to ask, some things you can learn how to do, because the business owners are are your best life clients. They're going to write the biggest checks. And I wrote several big large cases this year dealing with business owners. And all I do is just meet with them. It's just like today, I met with a guy this morning early, and this guy will only see— he's a electrical contractor, and he will only see me at 6:15 AM. So I met him at 6:15 AM this morning, and, uh, you know, some of the questions— I got 13 policies on him, don't have any life insurance. So one of the questions I ask him are, you know, what's good? What would happen to your business if, if you, uh, were sick and couldn't work, or you got hit by a Mack truck? And you're not here? Who's going to take the business? Do you have anything in writing? No, no, no. I mean, just about every question I ask him about his business, he's done no planning. He's a solo owner. And so here, so the first thing you would do is identify, to have a plan, identify your top 25. The other thing I would encourage you to do is go out and find a good CPA and a good estate planning attorney that you can build a relationship with that would be part of your team, if you will. So you're building what I call the— you're the architect and you're building a team around you as you take care of business owners. Business owners ask me all the time, do you know a good CPA? Do you know a good attorney? And I have 2 or 3 good attorneys, one in particular that I refer to. But you need to have an attorney that's going to help you put— it's just simple things. A lot of times, do you have a will? And so many people don't even have a simple will with powers of attorney and healthcare. Do you have medical directives for your children? Your children that are over 18. You know, when they were over 18 years old, you can't speak on their behalf unless you got a medical directive. And so they have to have that. Most, most parents don't know this. And so what you're doing is you're bringing value. You're bringing value to your customers. You're bringing credibility to your customers. This is how you write bigger premiums. When you learn how to do this. So you set up the first thing you do with your top 25 business owners. You set up an appointment and you go in and you try to identify some needs and stimulate their thinking by asking questions. And it's just, you know, you just ask them, are you open to a second opinion? Are you open to an opinion about your business planning? Let's talk about it. What have you done with your business planning? And the question always challenges them is, in 2021-22, what would you want to fix, avoid, or accomplish in your business? What would you want to fix, avoid, or accomplish in your business? And just stop talking and listen. And, or what's, what's on, what's top of mind today as we, as we, uh, you know, talk about your business? And because people, a lot of business owners are so busy, they're so busy, you know, they, they make, they, they don't have time, they don't, they don't make it a priority, um, they think they can do it tomorrow, there's plenty of time for that later. and then they lose time and something happens, and then they're not properly covered. So let's go to the next slide and talk about, um, uh, 3 areas of business. Okay, the 3 areas of business on the next slide, uh, number 1 is business continuation planning. So when you sit down with business owners, you got to know what to ask. And to be able to move them. Because you, you're trying to move them to proper plan for their business. That's the number one thing you're trying to do is get them to plan something in writing, like a buy-sell agreement or some kind of exit agreement, whether they die too soon, live too long, and they have to file So what happens in your business, Mr. Jones, and, and in the event of a death, disability, or retirement, what happens? And, um, and so, you know, you, you just— most of them have— I'd say that most business owners, not probably 90% of them, don't have any kind of disability insurance. They think the business is going to run the same without them than with them. A lot of times that's what they're saying, because if they're saying, if I'm laying on flat on my back, then my business is still going to run. And, and you know, and I know it doesn't, doesn't happen that way. You, you want to think it does, but for most businesses it doesn't run that way. So how will your family, uh, get the money out of the business? The other day I met with an attorney with 9 partners. And I, and I said to, to him— I've known this guy, I've gone to church with him for a long time, that we're deacons together— and talked to him. And I said, I said, tell me what happens, Andrew, what happens if one of the partners dies? How do y'all pay them off? And this is what he told me: we're gonna pay him over a 4-year period out of the cash flow of the business. And I said, you're going to pull cash out of the business to pay? They have nothing, no other agreement, no buy-sell, no life insurance in force with any of the partners. So I'm going to make a presentation. He's going to get me in to make a presentation to all 9 of the partners And I, I'm, I can't wait because I'm going to show them some stuff that's going to— they just, they're going to do it. I'm just telling you that. But this is what we— we're surrounded by businesses like this all in our book of business where they've done no planning. Most business owners, I will tell you, have done little or no planning in case of any kind of succession planning. So the other question is, will your children be involved? Well, the guy I met with this morning, you know, one of the questions I asked him is, both your sons gonna be involved? Two of them, but both college— just graduated from college. Are they gonna be involved in the business? Well, we don't know if he's gonna be involved in the business or not. One of them is, One of them decided to take another job with a concrete company because they paying him big money, and he got a concrete degree of some type, and, um, and he, they offered him a lot of money, you know, over $100,000 a year right out of college. So his other, his son that he thought was coming in is not coming in. So now he's like, what am I gonna do? Um, and so, and so if you sold the business You know, how would you structure the sale and what would the business be worth? It's called business valuation. A lot of times people don't know what their business is worth. They don't even know how to figure it. So I'm in the process of meeting with some people and develop some relationships with some business evaluation. And there's a lot of companies around that do this. And CPAs that do this, that help business owners, uh, decide how much is your business worth. Now, if I— if I— one thing I would tell you, go out and try to find some of those, because you're talking about bringing credibility to somebody, uh, is that indeed. I'm, I'm telling you, I'm gonna really focus in on that going into the new year and learn a lot about business valuation. 'Cause so many people are just, don't, they don't have a clue. They don't have a clue. So what are your appropriate salary continuation agreements? Do you have any with some of your top people or even with the partners? All right, let's go to slide, next slide, please. And so, and the other thing is that estate planning. We got to have some kind of idea about estate planning. Well, now we got a new administration in the White House, and we don't know what's going to happen with the state planning. It's changed a lot of times in the last 25 years, and it's probably 18 to 22 times it's changed. So we, we need to become, become familiar and, uh, what's going on with the state taxes. When I first started, it was at $650,000 for the wife, $650,000 for the husband, $1.3 million. Now it's $11.7 million per person and $23 million per couple. So, and then you give away $15,000 a year to your kids. And so we should know these things. These are just basic, basic 101, if you will, about estate planning. Is your will and trust up to date? Do you have a current will with powers of attorney and healthcare? This is very important. You should ask every customer you meet with, do you have an Alabama will? Do you have a Georgia will? Is it updated? And especially if there's blended marriages. If there's blended marriages and all that, you should make sure you have will. The best thing you can tell your customer It's important. If you don't have a will, well, the state of Georgia has one for you, but it doesn't say what you want to say. So that, that's what you don't want. You don't want to go into a situation and not have a will, a written will, because if you let the state of Georgia decide, it ain't gonna be a happy moment for your family. So I would say that it is very important that we dial into that and that the— to make sure that you have a good source, referral source, to be able to send your customers to. Because sometimes, every now and again, you will meet a person that's over the estate tax limits. You might meet a guy that, that might be worth $50 million or $40 million, and you say, well, we don't have those kind of folks in my town. Well, they're out there. Hear me out, they're there. You just got to find them. You got to dial into them. And you can't judge a book by its cover. And you don't know until you get to know people. I'll tell you, some of the people that I've gotten to know in recent days, that, that it's amazing what kind of money. Met with a guy last week, and I've had his wife insured for 25 years. And so I sat down with him and he said he's making $4 million a year and he's a builder. And I said, well, how many houses do you build in a year? He said 364 last year, 364 houses. And he's got 2 other partners and they did have a buy-sell, which is unusual, and had some Northwestern Mutual policies. As policies backed up to fund that. But anyway, it was a great meeting, and I found out a lot of other stuff when we were meeting with him. And I'm going to reconnect with him. He's interested in long-term care and some other stuff. So, um, so is your life insurance adequate and cost-effective? Well, a lot of that is learning how to sell cash value life insurance. There's so many of the agents out there and I was one of them, is early on is learning how to sell beyond term insurance. Why is it when everybody walks in your office and they talk to you about life insurance and they say to you, I just want term, and then you just quote them term and they walk out with term and you never talk about cash value life insurance? Now that doesn't make any sense whatsoever, that you're, you're not educating your customer You're, you're not in sales. If you're gonna be in sales, you got to be able to handle objections when they give you an objection. And it's the same objection every time with term insurance: it's cheaper to buy term insurance, it's better if I take my money and invest it into something else. Well, what is the something else? You know, one thing Scott said a while ago is don't compare investing cash value life insurance with mutual funds. Those are two entirely different investments. And why would you do that? You don't compare US Treasuries and government-backed bonds and mortgages to the stock market. I mean, that's two different animals. Now, if you want to compare it to bonds, you can do that. But, uh, and the other thing they say is, well, the interest rate is not that good. Well, how do you define it? What do you define a bad interest rate. When you got a portfolio and your money is in the market, you don't put everything in the market. Life insurance, permanent life insurance, should be in every financial plan. It should be because it complements, it complements what you already doing with the market. And if you have annuities or, or you have stock and or real estate or rental income, whatever it is, life insurance is— it has guarantees built in all around it, and it, it complements what you're already doing. So don't compare it to a mutual fund, and that's what they do a lot of times. So should I make gifts to my children this year? Then you can decide that, and you've got a good estate attorney to help you, help you decide those kind of things. Uh, would gifts to charity provide you with tax benefits? Do you have a charity? I met with another guy a couple weeks ago, and one of the things I said, I said, what charity do you love? He said, I love Auburn football and I love the FCA. And I said, wonderful, those are two Great things. 3 out of my 4 children went to Auburn. I like Auburn football too. And you know, when you send them as much money as I send them, you learn to love. You know, just like Scott said, where your treasure is, that's where your heart is. I can tell you where your heart is, just let me look at your checkbook. And that's the truth. And that's why I say, if you love term insurance and you don't love cash value life insurance, If you're not funding cash value life insurance in your own life, there's a great chance you're not going to be worth the flip selling because you don't believe in it. You know, you have to let your wallet do the talking because once your wallet does the talking, then you learn how to, you know, put your money where your mouth is, so to speak. And that's what you have to do in our business. You got to learn to love cash value life insurance, and it will make— it would make your life a lot more fun. As Scott said, it is much more fun selling bigger premiums than it is smaller premiums. All right, let's go to the next one, the next slide. Executive benefits. Now let's talk about that. What kind of benefits, Mr. Business Owner, do you provide for your top people or for you? And what are you doing to retain, reward, and motivate key management? I have a gal in my office that's been with me a long time, and I give her an executive bonus type situation on a universal life policy. And with the Roth IRA coming in behind it. And that's what we do. So that helps me retain, reward, and motivate. I don't want to lose her. Right? And I was on the personnel committee at church. And our top 3 guys, I call them Peter, James, and John. And we got 3 key guys with a $21 million budget. And so we did a life policy and stuffed a bunch of money in each one of them to help retain our top 3 guys. And they all stayed with us. We never lost them. A couple of them retired a couple years ago. And, but think about this is questions you asking a business owner. What are you doing to retain, reward, or motivate key management? What are you doing? Or what impact would loss of key management have on your business? What, what was your top producer? Uh, what if he was, he was taken away by your competition? What would that do to your business? Now, key man You know, there's Keyman, there's Executive Bonus, and there's Buy-Sell. And all these are— we'd have to go deeper, and we don't have enough time today to get into all that. But this is going to whet your appetite. I hope that you will be able to join us again later in a seminar or something, because we really get down and dirty with this and get into it with more detail. We just don't have enough time today to do all that. But, but these are areas that if you just learn— I'm giving you the questions to ask. So that, that's a big start right there of learning how to ask questions, because we're always in life are hired by the way we ask questions. Always. Not by the answers we give, by the questions we ask. Okay, so we got to learn how to do that. And so let's go into one or two more slides here. I think this next slide may be our last slide. So let's talk about that overall, overall planning. So, so have you done a good job investing your personal, business, and retirement plan assets? Well, that was one of the questions I asked this morning when I met with this guy who owns the electrical contractor. I said, what have you done? Well, he said, I got a 401(k) and I got, you know, he got a couple rental houses that I have insured and, you know, any, and he got stock and so forth. And I said, are you maxing out everything? He said, yes, I'm maxing out everything. And coincidental, his financial planner came by my office this afternoon Moon, and I know him because he used to work for State Farm. And so he also echoed to me that he's maxing out everything. I said, well, let me show you on Executive Bonus 162 how you can take money, put it in a whole life, limited life, universal life contract, and put that money in and withdraw it out later as part of your retirement, which will complement what you're already doing. Now, I showed him 2 things. I'm gonna tell you what I showed him. The first thing I showed him, he's 50, he's 55, and I showed him a $500,000 10-pay, $38,000 a year. That was the premium. Now, we can't be afraid to show these kind of premiums when you're talking with business owners. You cannot be afraid to do this. You have to start getting out of your comfort zone and start showing bigger premiums. So I showed him $38,000 and then $55,000 to $65,000. At $67,000 to $82,000, I showed him pulling out $22,000 a year. To help supplement his retirement, okay, at 80, 82, 83, something like that.

I was—

it was under 85. And then, you know, the cash value kept going to age 100. You don't want to give out of money because if you get out of money, if the policy lapses, then you understand on the limited pay, then there's gonna be a there's gonna be a gain in there. So you don't ever want the policy to lapse. So when you start pulling money out of it— so I showed him that, that was number 1. And I showed him how he could make it part of his salary, gross his salary up, and then deduct it less. All it's called is Executive Bonus 162. If you go under, uh, um, Backroom Technician on your computer and type in Executive Bonus 162. It explains the whole thing. It explains— it's a diagram that explains it from A to Z. Now, everybody's— every agent on this call should be doing a 162 on your life, on your wife's life, as long as she's pulling the salary out from your agency. In case there's a paper trail down the road, you just need to make sure that if she's an employee or officer— she don't have to be an officer in the company, but, but you want to make sure that if she's drawing a salary, that you can do one on her too, man. You know, I got one that I'm putting in $2,500 a month in. I mean, you, you got to be able to fund these things, okay? So you got to be able to believe in what what I'm trying to teach you today is that, so you gotta ask these questions. Do you have a good overall investment strategy? Do you have a good strategy for what you're doing? Do you sometimes invest without looking at the big picture? You gotta look at the big picture. You know, as you get older, you look at the big picture. What am I building? I'm building pockets of, earnings are, I'm gonna have buckets of money in 10 or 15 different areas. Because see, we're all self-employed, so you got to be building these pockets of investments as you go down the road. And whether it be real estate, it could be a Jackson Annuity Prospectus too, which is one of the best annuities out on the market that I'm, you know, I've sold a ton of those things. That's just, that's a great great product. And, um, could I pay— how do I get away with paying fewer taxes without increasing my risk? What— this is a— this is another strong question. What changes would you make if you knew you only had 6 months to live? You ask that question and you just shut up and stop. Don't say nothing else. I mean, you, you got to get to people by asking the right questions. What do you do? What do you— do you have 1 or 2 or 3 employees you want to golden handcuff? Remember, I told you I got my top, top gal that I golden handcuff. I don't want her to leave. She— I asked her, you know, if she leaves, I'm gonna probably leave with her. No, I'm just kidding. But, but, you know, she's that important to my agency. And you know how that is. And I've retired 7 ladies since I've been an agent. So it is important that you golden handcuff and you treat your good people well so they will not leave you and they will stay with you. And these are very important strategies that you have to have. Now, if I ask everybody on this call, What strategies do you have in place right now? What do you have? And I would say that most of us don't have much of a strategy on what we're doing with, you know, business owners. And it's because we get so busy with life and everything else, and we don't take time to learn this. Now you got to learn this. I learned a lot of this. With the top-of-the-table coach, Lucas Serra, out of Chicago. He was my coach for 4 or 5 years, and he taught me, he taught me a lot of this. So a lot of stuff I didn't know about business owners, and that happens to be all he does. So do not be afraid to tackle this and get in front of your business owners and go for it and look for it for next year. And I got some books if y'all would remind me, and I'll be glad to send it to Bradley, a list of books. If you would just read some of these books, it will change your life on cash value life insurance, I can tell you. So that's all I got today because we out of time, but I appreciate the opportunity to share with you. If you want to know more about fostercannon.com, then we got More classes we doing. We're doing some live stuff in West Palm, Atlanta, and Marietta, Georgia coming up. So we'd be glad to— and we get, you know, we'll spend a whole day going through this stuff. And then I'll show you some live cases that I've done this year, last year. So that we do all that. So thank you for letting me be with you, Bradley. I enjoyed it. And if you got any questions, we'll be glad to take questions if you got any.

Yeah, this has been great. This has been so great. Thank you guys so much for just your growth and then your willingness to use your growth and what you've been able to do, do in your own businesses to contribute to the lives of insurance agency owners around the country. I mean, it's been an absolute pleasure having you guys back on. You guys are in our top 3 most downloaded podcasts we've ever had, and that's saying a lot. So I'm grateful to you. Steve, what's the, uh, what's the website that you want to point people to that they can find out more information about your workshops?

Yeah, fostercannon.com.

Fostercannon.com.

Fostercannongroup.com. Yeah, and so that's got all the dates on it going in the next year, you know, live stuff. We're gonna do some virtual stuff. We do virtual stuff on phone where you can just dial in once a month for 6 months. Uh, you can do that, or we can come to our 8-hour all-day seminar in Marietta, Georgia, West Palm Beach, or Charleston, South Carolina.

Awesome, awesome. Scott, thank you so much.

Thank you. Enjoy being with you.

Always enjoyed it, my friends. All right, thanks guys.

Thank you.

Okay, Ali, this is the intro and the outro to the Scott Foster, Steve Cannon, Foster Cannon episode. Welcome to another episode of the Club Capital Leadership Podcast. My name is Bradley Hammond, your host, and we have Scott Foster and Steve Cannon back on for the second time. They are in our top 3 most downloaded episodes, and this is a special episode because we recorded this also to place on our YouTube channel. So you'll hear them reference advancing to the next slide, and so I think you'll get a lot out of this if you if you also go and listen and watch the YouTube channel. But if you're driving, doing something, cutting the lawn, et cetera, then you'll still get a lot out of this episode nonetheless. Without further ado, here's my conversation with Scott Foster and Steve Cannon. You know, I always give my takeaways, my biggest takeaways from each one of the episodes. I would be curious to know, because we placed this on our YouTube channel with Club Capital, What are some of your biggest takeaways from our episode today? So go ahead and place in the comments, what was the one biggest takeaway you had from the time that we spent together with Scott Foster and Steve Cannon? Hey, as I said at the top of the episode, when I started with Scott, I said, hey, we're making this year our best year yet. We want everybody to make this 2022 their best year yet. Obviously, Scott and Steve, they have done it at the highest level when it comes to life insurance. They're obviously incredible business owners. But also, if you want to also get more of the in the weeds of some additional systems and processes in your office, in addition to not just life insurance, make sure you go visit coachpconsulting.com, coachpconsulting.com. Whether you want to be the tops in your area, you You want to get to the next level in 2022, go to CoachBConsulting.com. If you're going to make 2022 your best year, then also, you know, you need to have a presence online. People need to be able to find you on Google. I've heard it said that you are what Google says that you are. And so therefore, are you happy with the ability for customers or prospects, leads to be able to find you and your business online? If you're not, work with the best that's going to be able to help you to do that, go to directclicksinc.com. Directclicksinc.com. They care about you. They— you're not just a number with DirectClicks, quite frankly. They, in their monthly review calls with you, you're going to actually know and have transparency about where your money is going, whether it's regarding SEO work or pay-per-click. Directclicksinc.com. I know I want to stand out from the crowd, you know, whether it's, you know, fashion is your thing or whatever it may be. But you know, you want to be able to stand out from the competition when it comes to your business. None better to work with than Relevant Advantage. Go to relevantadvantage.com and they can help you to be able to create some customized solutions, whether it's for your very best customers like Steve talked about your top 25 business customers. If you want to be able to give them some great gifts that's going to stay in their kitchen, or it's going to stay that they're going to actually use instead of throw away, then RelevantAdvantage.com is the best place to go. You can get connected with someone that's going to help create a customized solution no matter what your dollar budget is. Go to RelevantAdvantage.com. And of course, we wouldn't be able to do this without our awesome partners at Club Capital. Go to club.capital. They are the nation's largest and best at tax, bookkeeping, financial CFO services, analytics to help you to be able to know your numbers so you can make better decisions. They're the best in the country and the largest working with insurance agency owners. Go to direct Excuse me, I'll change that. Go to club.capital and book your no-obligation demo today. Let's make 2022 your best year yet. Hey, Ollie, thanks for turning this one around so quick. Hope you're doing well. Thanks.

Bye.