The 5 Main Product Selection Criteria | 7 Figure Annuity Sales Podcast | Ep. 281

The five main product selection criteria we've got and Chad, these actually it started as four. You came up with these four. And then we added one recently because of the seen importance of it. But you've got financial stability of the carrier. This is, this is the first one. And I think it's important too to say that it doesn't mean that you're only selling the carrier that has the highest financial stability or the highest ratings. It means that if a carrier is not financially stable, it. It's the first thing that nixes any of their products from being considered.

Yep.

So there's a.

You and I just saw this recently.

First thing to nix it.

We just saw this recently. There's a carrier that has a really high myga and we looked at the financial rating and we're like, nope, it doesn't matter. Yeah, that that rate looked really good. But no, the financial stability is not there.

I agree, I agree. What good is it to have a policy with a carrier that may end up getting acquired or, or may end up getting what? What do they. Oh, gosh, there's a term.

Receivership.

Yes. Gosh, go into receivership. Which is a fun, a fun little nugget here.

Go ahead, nugget away.

This goes back to 0809. There were more banks that went under in that time period than there were insurers that went into receivership.

Is that supposed to be revelatory? There are 580 banks that disappeared from 2000, 580 banks from 2007 to 2009. How many insurance companies went into receivership.

In that timeframe that were exclusively dealing with fixed products? I don't think any. And there were some that were dealing with some variable stuff that I'm sure did get. Get received.

Correct?

Yeah. Not straight receivership.

And actually, so what good is it in that policy? I've actually checked all the way back to 18 ladder 1800s and I can't find anybody. I've told everybody for years, if there's ever anybody that finds that, please let me know because I've googled it, I've GPT it, I've asked agents. I mean, I've literally tried to find anyone. And I personally have never found a straight fixed insurance company that has disappeared since two or even went into receivership since that timeframe. So I'd be happy. I mean, I don't want to be given false information. So if anybody ever finds out, let me know. And I do, when I tell clients that I always preface is that I have not found One yet and it's not that I'm still looking. So. Okay, financial stability, is it to have.

A policy with a carrier that could end up being received? Yeah, right. You've got, then you've got best benefits. Okay. So this is a product, this is more of a product type thing. Right. So now that you've whittled out all of your, your, you know, financially less stable carriers, you're looking at kind of the top dogs there. What kind of benefits are there in the products? We're talking penalty free withdrawal, we're talking about waivers of surrender, nursing home, terminal illness, home health care, all these different things. There's a bunch of different quote unquote benefits that you could consider. But that's number two. What do you have to say?

It's important to understand there's a big difference between features and benefits. Features is what it does benefit to me is how does it impact them? You know, the feature of this product, you know, I have a red car. What's the benefit of that? I just love the color red. And it just, it's something I really enjoy. It's a, it's a truck. The feature of the truck is it's lifted a little higher. The benefit is I can go places that a lot of people can't go as far as off road. So that's the difference. Unless you're a Chevy and you break down everywhere. But the point is you, you agree, you agree I had to catch recorded too late. But the benefit is, what does it do for them? So the feature of a product is it has an income rider. The benefit is it's income for the rest of their life no matter how long they live. So it's important we understand that vast majority people buy something not based off the features, it's based off of the benefits. So that's why it's number two.

Yeah, I, I would take it a step further and say the benefit is the thing that solves the problem. So if you ask me, you say, caleb, sell me this pen. And I start telling you about how great the blue ink is and how smooth it rolls and all this stuff. But I haven't determined whether or not you need a pen. Yeah, I, I'm just selling features.

That's.

Once I've determined you need a pen, it doesn't matter what pen it is, I sell you that pen because you've.

Got, I'm going to write you a million dollar check. But I don't have a pen. You're going to find a pen and you'll pay $100,000 for that pen to write the million dollar check.

So yeah, this third one is particularly relevant to me today. Customer service.

Yes. You've had a doozy today, man.

I have.

You know what, though? That's me too, though. I had. We were trying to get our phone switched and we went to two. Called two different customer service agents. And.

That I would have experienced less pain if I would have taken a hammer to my pinky. I mean, I just was so frustrated. And then just yesterday I called and I got a great customer service person. And it just. Even though we were doing something that's kind of monotonous, it was. It was almost a pleasant experience, right? Yeah. And I want my clients being treated well. You know, that's why you're also stickler in that too. You want to make sure that when you're trying to get agents contracted, they have business going. You want to make sure they're taken care of.

Absolutely. Age. Yeah. With the carriers that I'm encouraging agents to get contracted with, I want the carriers to service both the agent and the clients well. Yeah, not only that, but I have an expectation for service within our team on how that actually works, how we operate as an organization, but then also any vendors we use.

Yep.

If I'm putting. If I'm recommending that an agent use you for creative services, for leads, for marketing, whatever it might be, there's an extension of a standard that takes place there. If I'm creating a referral, I'm gonna make sure you're servicing those agents with the same standards of excellence that I have for the way we operate. Because there's an extension. Separate company, but it's an extension.

I fired vendors that had a good product and you know, they did really well, but they had poor customer service. I fired them, you know, because to me, there's a bigger frustration. I tell clients this all the time. You know, you've got this great policy, you got everything going, but then you have to. And struggle to be able to talk to someone about a death benefit or activate an income. And that's why I am so strict at third party customer service, especially when it's foreign is almost a no go for me. I mean, there are exceptions to that. But vast majority of the time there's a very, very, very large organization that helps retirees and it's military based. And I'm telling you, they went third party customer service international. And their customer service has been TR like their ratings used to be so high. They were known as a great Customer service. And now if you look at the reviews, they're just horrible. And you just. Customer service is so important.

I agree. And if you're an insurance company listening to this.

Yeah.

I like to say this, your effort, I'm not calling you out insurance company, if you happen to listen to this, a company's effort at large to save pennies on their customer service will cost them dollars.

Oh, a hundred percent. And the crazy thing is those customer service, right now, outsourcing customer service is saving lots of dollars. But to me, a reputation is far more valuable than any amount of money. You've got to make sure that you back your reputation up by, you know, if you're saving money, that's fine, I get that. But not at the cost of your reputation.

Agreed. 100%.

So financial stability, best benefits, best customer.

Service, and the next payout, highest payout or growth potential. And the growth potential side addresses two things. If it's income that needs to increase, okay, what's the opportunity for that to actually occur? And then if the purpose of the money is just passing on to heirs, they're just trying to accumulate it. Okay, great, Then what's the growth potential of that? And you're looking at rates, you're looking at indexes within the product, right? Because a great rate on a dog indexed, it doesn't matter at all. And I've seen that, I've seen that before, where you're looking at some of these historical index returns, the actual index itself, and you're thinking that thing is done diddly, you know, in lot in actual, you know, returns over the last however long. But they've got a good rate. It's like that rate means nothing at that point.

We have some pretty good discussions about that, you and I, where we're sitting there and we're going, man, this looks really good. But then you start to look at the historical, and you look at the rate integrity and all that, you go, wait a second, this is not what they say it's going to do, right?

Well, and that's the fifth one is renewal rate integrity. And that's a carrier thing. You know, this, is this back to carrier responsibility? What are they doing? Are they fixing their option budget? Do they have a variable option budget that can go up and down and all around? Are they front loading the option budget in the first year to have these really high starting rates and then that option budget decreases in subsequent years? You already know that option costs are going to fluctuate over the time of the policy. So the best thing the insurer can do is fix that and then hopefully there's not as much fluctuation there. But that renewal rate integrity is huge.

There's, there's quite a few companies over the years that I've worked with that they have a great first year and then it turns out their next year is horrible. I mean horrific drops of like 50% difference in participation rate spreads or caps. And the thing is is I will never ever, ever use a company that has poor rate integrity. It just in granted I've had some, I've had some surprises, man, where I thought they were really good. And then the next year it was a surprise where there's a change of leadership or what happened. And granted there's nothing we can do about that. We can't fix something that we didn't know was going to break. You know, it's one of the most frustrating things in my entire career is running illustrations. They've had great integrity and then something happens, something changes and they change that. It's not often I can probably count maybe two companies that I can think of that that's happened to. But having to swallow humble pie and tell your clients I actually have a friend that we put his mom into, 83 year old mom into a product that the rates are not doing what they said they were going to do. And it's so probably one of the worst things, probably I would say that's up there. One of the top worst things in my career is having to deal with stuff like that because my word is everything. And when I presented the illustration when I did the research in the company when I thought everything was going to be great and then they changed something. I remember one company telling me and this is customer service pertaining but they said, aren't you glad we always answer the phones? We always have a person answering the phones. And then now it's not that case anymore. And sometimes the whole times are 10, 15, 20 minutes. But 15, 10 years, five years ago I sold that off of their customer service is phenomenal and their customer service is still good. But nothing beats to me I heard someone, this was a recording. Got to make this call quicker. We went to you to answer a few questions to get you the right person and then literally five prompts later they're still trying to get me the right person. How much quicker would be somebody pick up that phone right there and say hi, this is ABC Insurance company. What can I help you with? I'd like to get to this department. Boom. We'll connect you right there. How's that not quicker.

Right.

You know, I, I don't get that. So it's so important. Rate integrity is. You know, I ran. Went on a little rant about customer service, but it's more pertaining to somebody saying they're going to do something and then it changes. That gets very frustrating.

Well, and I'll say one, one thing that I feel like I've noticed as a, as a fair consistency is that the carriers that are good in all five of or in one of these areas tend to be good in most of these areas. In other words, almost this thing of like, excellence. The way you, you approach excellence in one of these areas is often the way that you approach excellence in all the areas and you're willing to sacrifice it.

Yeah, that awful. Often trickles down from leadership. You know, leadership often helps with integrity and purpose and drive. You know, that's why you guys do sell well. So well. I mean, it's really.

Yeah, it's the humility of.

The humility of the leader.

Who'S. Whose head is bigger on the screen. Let's be real here. Okay. There you go. That's better. Okay, Well, I think that pretty much wraps that up, right?

Yeah. Those are the five things.

Well, so we go back to financial stability, best benefits, best customer service, best payout or higher, highest potential growth and rate integrity. So I hope this helps you guys. You have a great day and of course, happy selling.