How To Make 10x As Much Money Selling Insurance

Here's why. Most insurance agents make no money even when they write business. I'm going to break it down for you on the whiteboard right here. So let's say that you write $30,000 in annual premium in one month, alright? Now typically it's going to take you about 50 policies to hit that because the average insurance policy is about 600 bucks. So we got 600 bucks times 50 policies equals that 30k in AP, right? So to write 50 policies, how many leads do we need? Now a highly skilled insurance agent is going to close about 1 in 10 on every lead that they have. So we got 10% closing rate. So in order to write 50 policies, we need 500 leads.

500 leads. Obviously we're doing 10% of 500 is 50 times 630k. Pretty simple right there. Now the question is, how are you going to get those leads? You know, that's the number one question when you're an insurance agent, how are you going to get your leads? What's your lead source? Now for decades on decades, the number one lead source for the insurance industry has been direct mail. Okay? So we're going to assume that you follow suit with the majority of insurance agents out there and you buy 500 direct mail leads. Now you know if you went back five, even 10 years, you're looking at under 20 bucks for a direct mail lead, maybe under 30. Now recently those costs have skyrocketed. The return rate on direct mail leads have gone so low, you're now going to be expecting to pay about $40 on average for a direct mail lead. So we need 500 leads. They cost $40 a piece. 500 times 40 is 20 grand.

Okay, so you've already spent of this 30k in AP that you wrote, you spent 20 grand just on leads? Just on leads. Okay? So I'm gonna get real simple with this math right here. 30k minus 20k, what's that? We got 10k left over. Okay, so we have 10k, right? We had 30, we wrote 30,000 in annual premium. We spent 20 grand on leads, we're left with 10. But wait, we haven't accounted for chargebacks. Even if you write the best business out there, you're still going to get them. So let's say you have a 80% retention rate. Only 20% of your business charges back. 80% of 30k is 24k. So now we can cross this 10 grand out because that's completely irrelevant. We have 24 grand, alright? But we spent 20 on leads, so we're left with four.

So you wrote 30 grand.

You wrote 30 grand. You thought you made 30k, but you spent 20 on leads and you thought you made 10. Right? But no, you actually made four after chargebacks. So you have four grand. Okay, well, that's great, but we forgot to account for one thing. If you're running face to face in the field, you still have other costs that are associated with that, right? Like, for example, gas. So you have four grand after chargebacks and leads, but you're running face to face.

Now, let's say that before you got into this business, you knew you were going to run face to face. You went out and bought yourself a brand new Prius because you wanted something that was good on gas. A Prius is going to get about 50 miles to the gallon. Now, when I was running face to face, I drove about 250 miles a day. 250 miles a day. Okay? So that's driving from my hometown to the area I'm going to work, driving around the area that I work, you know, door knocking, running appointments, whatever. Right. And then driving back. So we got 250 miles per day, 50 miles to the gallon on a Prius. So you're going to be using about 5 gallons a day of gas.

5 gallons a day. Average cost of gas is about $4.84 in the US right now. If you're in California, you're probably saying that that sounds low or all I have to say to that is I'm sorry. So five gallons a day at 484. I already did the math. It's about 500 bucks a month.

Granted. This is if you have a Prius. Okay? So you're spending 500 bucks a month for a Prius on gas. Now, let's say you still have a car that's decent on gas mileage, but it's not Prius. Good. Let's say you have the most common car in America. Honda Accord gets 30 miles to the gallon. So you're spending 800 bucks a month. And this is with a Honda Accord. This is not a big car by any means.

500Amonth with a Prius, 800 month with a Accord. Now, let's say you drive an SUV like a Toyota Highlander. In this example, a Toyota Highlander gets about 21 miles to the gallon. You know, average between city and highway. Most of the miles you're going to be driving are highway. 21 miles to the gallon. You're going to be spending about $1,150 a month just on gas. With a Highlander.

All right, so depending on what you drive, you can cut out that four grand, take 500 off, take 800 off, or take eleven hundred and fifty dollars off. So now you're left with sub four grand, depending on which car you drive, maybe even sub three grand. And we still haven't even accounted for the most sneaky cost for insurance agents, which is food. Now, whenever you're running face to face, what you'll typically find is that you're out all day, you get up early, you drive to your area, you're driving around all day trying to sell policies. You drive back home, and by the time you get home, it's dark and you're ready to go to sleep. You haven't cooked a lunch for the next day. You don't have time for any of that. So I found myself, whenever I ran face to face, buying a lot of fast food. And not only is this costly on your wallet, but it's costly on your health. And you want to be sharp between the eyes when you're driving around talking to people all day. But you know, if you eat out maybe once a day, working five days a week, that's an extra $250 a month that you are now spending on food. And this is assuming fast food prices. If you're trying to be healthy and eating out, this number is going to be higher.

Okay, so now our four grand.

Has now, oops, grab this paper towel. Our four grand has now gone down.

Under 3K. We'll say that you're driving an SUV.

And we've also got to take away food.

So we got 0 here, 0 here.

This is 6, this is 3, this is 2. Ha ha.

There we go. So you're now left with $2,600 from 30 after you take out food and gas. Now, let's say, you know, you also have maintenance on your car. We're not even going to account for that here because you're already left with 2,600 bucks. You can't even afford to fix your car at this point. E and O, insurance, taxes. What if you're running the leads where you have to give out a gift card every time you talk to somebody? Gets expensive, right? So this is how you make $2,600 when you write 30. Makes no sense. This isn't profitable. You get a few more chargebacks than 20% and you're done. You're out of the business. This makes good agents fall out, and it makes bad agents go broke. So what is the solution? How can you make 10 times more with writing the same amount of business. Well, I'm going to show you right here. So let's take that same 30k and AP.

Right right up here. 30k in apartment. Now let's take the same $600 per policy. You need 50 policies, 500 leads. This time we're going to go in a different direction with the leads. So instead of going direct mail, we're going to get 500 self generated Facebook leads.

Okay. Now depending on the amount of states that you're running or where you're licensed, you can expect to get these for about $4 a piece. $4 a lead down from 40. Right. That's huge. $4 a lead. Okay, 500 times 4. This one's easy. It is 2 grand.

Same chargeback percentage. We're left with 24. 24 minus 2.

Is 22.

22 grand. Okay. That's what we're left over with. 22 grand versus 2,600. Here's the thing with this. Just from cutting our lead cost, we could still run face to face and make so much more, but we could cut our cost even more. We can take out food, we can take out gas, we can take out all the windshield time and spend that calling people and, and you know, if we have enough leads coming in and we're setting enough appointments, we can talk to somebody every single 15 minutes and just close all day long. So let's say we're not going to run the field this time. We're going to sit at home or wherever you want. You could be sitting on a beach in Florida and do all these appointments just over the phone. We're going to do telesales. So you know, for our CRM we're going to be spending about 80 bucks a month.

80 bucks a month. I know, real pricey. So 22 grand minus 80 bucks a month, you got 21,920.

That is our bottom line. That is pure profit right there. So you can either make $2,600 in our first example.

With more work, probably more time in the field, a lot more headache, or you can make 21,920. I don't know about you, but I can tell you which one I'm picking. Alright, so now that we've established that the most ideal, the most efficient, the most profitable way to do this business is to self generate your own leads and do tell sales on those leads, that's the most ideal way. Unfortunately, not every situation is ideal. You know, obviously. Right, here's the thing. Let's say you went out and bought thousands of dollars worth of direct mail leads and you're still waiting for them to come back. And you're just now seeing this video. You're already, you know your bank account is empty. You can't go out and start generating your own leads. You got to run what you got. So here we're going to give you six ways to cut your cost and maximize every single lead if you're running direct mail face to face. And then we're also going to give you six ways that you could do that with telsales. So I'm going to start with cutting your costs face to face because with a ton of experience running direct mail face to face, we got some tips and tricks for you. So the first thing that I'm going to cover is preset appointments. This is critical when you are running face to face. Call in advance. Door knocking is super expensive because the way that you need to view a lead is not only what you pay for it, it's what you pay to reach it. It's what you pay to talk to them. If I'm driving out to somebody's house who lives 100 miles away from me, the cost of the lead is not $40, it's $40 plus whatever it took me to get to them. Okay, so calling ahead, if you already are going out to an area and you have preset people to see, you're not going to be spending as much time driving around. You're going to be spending more time talking to people and more time closing. So preset appointments is number one. Number two is meal prep. Remember how I was talking about the most sneaky expense that comes up on insurance agents? It is food meal prep. Good for your body, good for your wallet.

What I recommend you to do is let's say that you're going to be running Monday through Saturday, just for example, so it's easy. So on Sunday night, I would pre make meals. I mean, you can literally just do lunch if you want to grab breakfast on the way or you know, cook breakfast at home, whatever you want to do. Pre make lunch for three days. So we got Monday, Tuesday and Wednesday. On Sunday, I'm cooking for all three of those days. On Wednesday night, I'm cooking for Thursday, Friday and Saturday. So I only have to cook two times a week, not six. So much easier. Saves me a ton of time. I wouldn't recommend pre making your meals more than three days in advance unless you're freezing them. Freezing does take away the taste. So that's why I do, you know, break it up two times a week. So meal prep is number two. This is gonna save you a lot of money.

This is a big one right here. It's also just gonna make you healthier overall, which, you know, you're gonna feel better, you're gonna sell better, you're gonna make more. Number three is to use a routing software. Use a routing software. And so this is especially critical when you're door knocking because we're not in the 1980s or 1990s or shoot, I don't even know when they didn't have GPS's. We've had those for quite a while. But basically there's no reason to grab a stack of leads, drive out to your area and then just look at different addresses and try to drive, you know, try to drive to them. Makes no sense. So what you're going to want to do is add all of your leads, all of the names and all of the addresses into what is called a routing software. And it's going to map out the most efficient way for you to hit all of those doors. So you're going to save gas and save time. A really good routing software that I've used in the past is called Route 4 Me. It actually lets you take a photo if you're getting printouts of your direct mail leads.

And just snap them and it will automatically upload them so you can do that really quick and efficiently. So Route for me is a big, big tool to use. I'm not sponsored by them or anything, but check them out on the App store. Number four is to ask for referrals. This is the best lead source that you could possibly get. Facebook leads are great, but they don't hold a candle to referrals. The reason why is whenever somebody gives you a referral, they are putting their stamp of approval on you as an insurance agent. Their friends, their family trust them and are therefore going to take their advice. So a key distinction here with a referral. A referral is not, hey, you know Billy Bob down the street? I think he might need insurance. That that's not a referral or yeah, yeah, I think you should talk to my brother. And then you just leave. That's not a referral. A referral is a name and a point of contact so that you can sell them. I don't care if they tell you, yeah, I got five people I need you to talk to. They don't give you a name or a number you didn't get. A referral doesn't Matter. So asking for referrals, this is a good way to turn one lead into three. Okay? You're going to be tripling each lead. If every lead that you get that you, you know, even if you don't sell them, if you're able to get two or three referrals out of it, you are on the right track. Number five is to work neighbors and take advantage of no leads. Okay, now the neighbors, I'm going to touch on that first and then I'm going to touch on no leads. Because neighbors is a little bit easier to explain and less broad. But, you know, when you're going out and door knocking, let's say you see somebody sitting out on their front porch, go talk to them. Hey, I was looking for Ms. Jones, but it doesn't look like she's home. She had sent in a card about the final expense program here in, you know, God knows where. You have five minutes. Has anyone talked to you about this kind of stuff? You know, just go straight into your pitch, but relate it back to them and, you know, you can knock on the neighbor's lead. Neighbors, doors. A good thing to do if you're going to do this is carrying around either gift cards or lottery tickets because it's super easy to get into a house when you have a lead that has someone's handwriting on it. But if they're the neighbor, you might want a little bit extra, you know, kind of like a bride to get in. Just like a good way to gain entry into the home is to have gift cards or lottery tickets. So that is the neighbor's side of it. No leads. This is probably the most broad thing that you could possibly get. A no lead is just anybody that you can talk to who did not send in a lead. That simple. So an example of a no lead, when I was running face to face, I knocked on a door from a lead that was from like 2018. Granted, this was 2021, or maybe it was 2017. Four or five years old. The lead was. So I knock on the door, talk to him. Hey, I'm looking for Margaret, whatever her name was. I think that actually was her name. And it was an apartment complex, so. So turnover super high there. Margaret didn't live there. I don't even know if she was still living. But I talked to a lady who was about in her 20s, still went into the pitch, still just told her what it was about, and she happened to want to buy life insurance on not only herself but also her husband, who was like maybe six or seven years older than me. Now I'm 20. I'm not looking into buying life insurance anytime soon. But both of them had kids and had I not even asked, I wouldn't have gotten that policy. But most of the time, you know, when you're in the grind of running final expense, you don't think to talk to younger people, but a lot of them are still interested. So that is an example of no leads. No leads could be someone you meet at a wedding, someone you meet at the grocery store, somebody that you know rear ends you in traffic. Hey, you know, that sucks what happened here. But, you know, I sell final expense, whatever, right? Just tell everybody that you do what you do and you will find more business. So that is number five. Number six.

The best way to cut costs and save money when you are running face to face with direct mail is to not run face to face. Number six is to just do telesales. Stop being afraid of the phone. You can sell just as good with your voice. You just have to practice. That's it. The costs that it takes to do face to face are so high, especially nowadays with gas. You know, depending on where you live, it could absolutely make no sense. In some areas of the country, telesales is still better, but you can make it work. In others, there's. There's just no reason. So switch over to doing telesales. We can help you do this. We have a whole CRM set up to coach you through all the steps and, you know, help you have a seamless transition. But definitely look into doing telesales if you are running direct mail leads face to face.

So now this next part here I'm going to talk about. If you are buying direct mail leads but are already, you know, have already transitioned over to doing telesales, here are six ways that you can cut costs and maximize every single lead. All right, so number one, here we have looking for cross selling opportunities. Okay. And what you'll realize whenever you start talking to the demographic that we sell to for a while is that they don't only need one thing. A lot of times people will wait until they're in their mid-60s to get insurance. What do they also qualify for when they're in their mid-60s? If you're 65, you qualify for Medicare. Even some people younger, if they have Medicaid or have some kind of disability, right? So look for cross sell opportunities. That's Medicare. If you run into a house that has some money, that's an annuity opportunity. Other health products like hospital indemnity Cancer plans, all kinds of stuff. Right? And typically you want to lead with what they sent the, you know, the actual lead in for. But if you are doing your due diligence, asking good questions and you know, going through a survey, you're going to find a lot of cross selling opportunities and this is just going to increase the amount of money that you can get per lead that you buy. And that's what we're trying to do. Number two is to ask about other family members. Okay.

Most people do not live alone. That is a fact. Most people do not live alone. Most people live with other people in the household. So when you go and talk to Ms. Jones, ask about her husband. Oh, does your spouse already have insurance or do you, were you looking to get him covered as well? Do your grandkids already have coverage? Because there's some super low rates that they can lock in on a children's whole life policy and you could pay like 20 bucks a month for the rest of their life for 50,000 in coverage. It's an easy sell. Okay, so number two is to ask about family members.

Life insurance is a very emotional purchase.

And oftentimes people are willing to make that purchase on other members of their family.

Okay. On the first policy that I ever sold, it was not, it was, the only lead that was sent in was for the husband, but he got insurance on himself, his wife and his four year old granddaughter. Yes, four year old granddaughter. Ask about other family members. Number three is to do your due diligence when checking on other policies that they have. So a lot of times you'll go into a house and somebody is looking at adding on coverage. And a mistake that a lot of insurance agents make is they'll go straight into talking about adding on coverage. Now typically you want to go into what they're looking for and then loop back to what they already have. So you know, let's say you get them set up with a policy. Sometimes people are a little bit touchy about talking about what they have currently. So. So policies that they already are paying on. But you're going to want to ask about these because a lot of times there's going to be replacement opportunities. Let's say somebody has four $5,000 policies and they're looking to add on five grand more. Why wouldn't I just, you know, replace all the other ones and get them a 20 if it makes sense. And you're always going to want to check to see if it makes sense because if it doesn't, don't replace it because Your name is your brand and your honesty is your reputation. So. So you don't want to screw with that. Right. But checking on other policies, you're going to find a lot of replacement opportunities. So look for replacements.

Is number three.

Number four. Number four is to add riders onto your policies. This is accidental death rider, grandchild rider, any other rider that you can think of to boost the premium and add more value. So this is going to boost premium.

And add value. I've gone into houses. This is not a specific example with a rider, but as far as V is really screwed up as far as people viewing their insurance policy as more valuable. I've gone into houses where somebody has, I think it's a Lincoln Heritage policy where they had a free funeral planning guide. That's it. Their agent gave them a funeral planning guide along with their insurance policy and they were scared to replace it for a cheaper policy because they thought they would lose the discounts they were going to get at the funeral home. Yes, adding riders, if you die, you're going to get double. Your family's going to get double. If you die in a car accident or any kind of accident like that, your policy is also going to give your grandkids coverage as well as that's value that's less replaceable. Number five is to make sure that you are consistently following up.

You are consistently following up.

And not leaving leads in the dust. Okay? And what I mean by this is two things. One, if you call a lead five times and they don't answer, the lead is not dead. Keep the lead, put it in your pipeline and nurture it over time. It usually takes five to 12 contacts, not calls, before you sell somebody. So if you go and give somebody a quote and they don't buy on the first time, it can be very frustrating. But that doesn't mean that they're not going to buy. A lot of people will BS you and tell you that they actually are interested. But there are a good percentage of the population who actually are and are just trying to do their due diligence. So when you give some a quote, don't just throw the lead away. If they don't buy on the first time, make sure to follow up with them and have a system for following up as well as a system for contacting and nurturing leads that you are not able to get on the phone. And this is all stuff that we can offer within our CRM link down below if you want to learn more about that. But number five is to make sure that you are following up not only with prospects that you have given a quote, but with leads that you have paid for that you cannot get in contact with. There's going to be times where you call a lead. You know, let's say you call them 21 times in June and then you call them two times in July and they pick up on the second rank. Just depends. Some people shut their phone off for months, some people, you know, God knows what they got going on. Right? And number six is to use simpler applications. This is especially critical for over the phone.

Because the more steps that you have for somebody to go through, the more chances that they have to fall off. So by using simpler applications, I don't mean to, you know, if the, if the company makes so much sense for somebody because it's by far the cheapest rate that they can get, go with it. But if it's a two or three dollar difference or something super minor, go with the simpler application. The client's going to get less frustrated, you're going to get less frustrated and you're going to close more deals. Carriers that offer voice signature are always a good option. Some people will struggle with doing the email signature and going back and forth with that. So if you can just do something quick over the phone, you know, they say, yes, this is, you know, Julian, yes, I certify that. Right, that's quick, that's easy, and causes for less frustration and more policies written. So that's going to wrap up everything. For the video, we touched on why insurance agents make no money even when they write business, as well as how you can make ten times more simply by switching over to telesales and doing your own lead gen. And then we also touched on six ways for you to cut your cost if you're running direct mail leads face to face and then six more ways on how to do that if you're running telesales. So be sure to click the like button if you found value in this video. Click subscribe to get more content like this from us and comment down below what you want to see next. We'll see you in the next one.