Selling Insurance Can Make You A Millionaire... ONLY If You Do This.

So I hate to be the bearer of bad news, but you have just been totally, brutally, absolutely lied to and misled by every single person in this industry. If you're trying to make money in the insurance industry by buying leads and dialing all day and selling final expense or mortgage protection or something like that, and just like magically you think you're gonna wake up one day and all of a sudden be rich, it's just not gonna happen. And so what I want to do in this video is break down the three, three fundamental shifts that you have to have to go from an agent who's just grinding your face against the wall, smashing your head against the pavement, trying to get something to stick and something to work, to ultimately being a business owner. Just print money in this industry. Because I'll tell you, those people 100% exist because I've worked with them and consulted with them and I know them personally, right? These people are making crazy, crazy money in this, in the industry. But it's because they made these three shifts mentally. So without any further ado, I want to dive in. I'm going to break this down on the whiteboard so that you can go from an agent who's having to grind your face off just to make sales to a business owner that owns a real asset that can provide for you and your family ultimately, you know, give you the life of your dreams. I don't know what that is for you. Maybe you just want to sit at home and eat popcorn all day, or maybe you want to travel the world and have a family. Doesn't matter. Whatever it is for you, I don't care. I just want to help you do it. So let's jump in. Alright, so in this video we're going to be talking about some big boy business stuff. I'm going to be mapping this out on the whiteboard for you guys. And fundamentally, right, every single business owner that I know thinks in this way. Okay, so three things. First, one, this is actually a math equation. I know, fun, Cool. This math equation goes like this. CAC.

To.

Ltv. Okay, so I'll explain what that means in just a second. But essentially this is a ratio, right? For those of you guys that did not pay attention in math many, many moons ago, ratio is just one number compared to another. It's essentially like a fraction, right? But instead of it being like this, it's usually like this, right? This would be a ratio. And so essentially what this ratio tells you, again, I'll explain what it is in just a second is the Health of your business. Right? So every single business owner in insurance, outside of insurance, they look at this and this is the thing that they study with, like, a fine tooth comb. This is like their entire focus. And so if you're watching this video and you're like, what on earth did Tim just draw on this whiteboard? Like, that's. That's the problem. That's. That's why you need to stick around and pay attention to this video, because we're gonna fix that for you. So, CAC to ltv, what does this actually mean? Well, what this stands for is. Is the cost to acquire a customer to the lifetime value of a customer. Right. So what does this tell you? Well, if you spend $1 to acquire a customer and each customer pays you $3, what's your cacti? LTV? It's 1 to 3, meaning for every dollar you put in, you get $3 out. Not bad, right? If I told you, here's a machine, you put a dollar in, you get three bucks out, you put all the damn dollars you have. Right? I would hope so. So, CAC to ltv, right? That's this right here. Now, obviously, when we're talking about insurance, these are going to be bigger numbers. So usually cost to acquire a customer for, let's just say final expense, for example, it's going to be under 300, but let's just say, let's say like 250, for example. So let's say you're paying 250 bucks per deal that you close, right? So if you're buying leads from vendor, maybe you're closing 1 in 10 of the leads that you buy. If you're generating your own leads, you're probably getting them for a lower cost. You know, maybe this. This CAC is a little bit lower. But let's say you're paying 250 now on average, with final expense, you're probably going to be making about 900 bucks in commission per deal, right? Cool. Amazing. Meaning if we do 900 divided by 250, so that's like a 3.6, right? So you're basically turning $1 into 3.6 dollars. Cool. Obviously, you got to. You got to factor in chargebacks, which is going to lower this number down. Right? Now, this is just kind of an example to show you guys what this looks like. $250, I make 903.6. Now, here's the problem. Everybody without. Without consciously doing it all, all of you guys, all the agents are only solely focused on this right here, right? Everyone just Wants to get the cheapest, like, you know, filthiest cheap leads that they possibly can and then just sell on that, right? Everyone's just trying to get this as low as humanly possible. But ultimately the problem is this number has a cap on how low you can get it, right? Now what do you think the cap is? How low can you possibly get the cost to acquire a customer? What's the lowest you can humanly get it? Zero. Right? But even this is impossible. You're not gonna get a zero cost to acquire a customer unless you're not even spending money on leads and you're just doing referrals. That's not even scalable, right? So the lowest you can possibly get this is zero. So everyone spends all of their time just saying like, how can I get the cheapest, lowest possible leads that I humanly can possibly find? They'll look anywhere and everywhere. You know, they'll buy 75 year old leads just to, just to get the lowest cost to try to decrease their cac, right? But in all reality, this is a losing battle because essentially what happens over time, you've probably seen this just in the time you've been in the insurance industry, is what happens to the cost per lead.

It slowly rises over time, right? I went to CVS this morning to buy some coffee. It was $20 for like a container of coffee. You know how much that would have been like 10 years ago? Eight bucks. So like everything goes up. So your cost to acquire a customer, your, the overall lead cost, what it costs to generate a leads, a lead, is always rising. So what happens is if you're always just fighting to move this side of the equation down, you're essentially going to get priced out of the market at a certain point. And I'll show you guys an example in just a sec. But basically, so we talked about cac, now let's talk about ltv, right? LTV is the lifetime value of a customer. So in the example I just showed you guys, it was 900 bucks. So everyone's always focusing on the CAC, like how can I get the cost as low as possible? But what you really want to focus on is how can I increase the lifetime value of each individual customer and sale that I make, right? Because again, let me show you guys this example. So let's say you make 900 bucks per deal, right? This is going to be a. Let me actually redraw this. So if you make 900 bucks per deal, this is how much you make, right? Let's say this is 900.

Let's say right now your cost to acquire a customer is lower, but over time, this is going to rise and rise and rise and rise. And guess what happens at this point? At this point, you're literally paying $900 to acquire a customer, which means you are losing money, you are now not profitable. And this entire time that the cost goes up, you're basically just getting squeezed. Like your margin is getting lower and lower and lower and lower and lower and lower. And this is where you get all these like, all these guys that, you know, they've been in the industry for a while and they're just complaining like, oh, the glory days. It used to be way better. And that's just because they couldn't learn how to adapt and get better and ultimately make, make their business stronger to adapt as costs rise, which is what I'm going to teach you guys to do. So if you put all your emphasis on cac, like trying to get the lowest cost leads, trying to get conversions for the lowest possible amount, it's a losing battle because costs ultimately rise and you end up just making less money, right? It's like if you're focusing on budgeting and saving money on coffee, instead of putting your emphasis on making more money, you end up making less, right? So ltv, what are some like. Actually, let me give you guys a different example. So who can pay more to acquire a customer? An annuity agent or a final expense agent? The answer is the annuity agent. Because if the annuity agent is getting $5,000.

On average of a commission per deal, they close. And the final expense agent is getting $900. Well, if they want to get a 3X, this person can only pay $300 per sale. That's all they can afford. And this person can pay a lot more, right? Whatever. 5000 is divided by three.

1600. Right? This person can make 1600. So the annuity agent is always. They have, their business just has better economics. They can out compete the final expense agent, right? So what I want to show you guys how to do essentially go from, oh, I can only pay this per sale and ultimately like I'm gonna get squeezed out to increasing the value per customer. And this works no matter what you're selling. You're selling final expense, you're selling annuities, you're selling anything, doesn't matter. What you need to do is there's a few ways that you can increase the ltv. One is cross sells.

Referrals. You'd have to ignore my terrible drawing. Cross sells referrals upsells, renewals.

Right? All these different ways, referrals, renewals. These are like the four main ways cross sells. Referrals, upsells, and renewals. So basically what this means is like when you get a client, instead of just selling them one product, now you sell them other products. Because, like, think about this. Let's say that same final expense agent that's making $900 commission also sells Medicare to their clients. And they also find, you know, let's say they find one annuity out of every 15 sales they make. That starts to stack up. And then they also are building their book of business and renewals with Medicare as they're selling final expense. And then they're also calling back their existing clients and getting referrals. And then they're also calling back their existing clients and tacking on extra coverage. Right? Now, instead of the LTV of a customer being 900 bucks, well, now it could be 1500 bucks, 2000 bucks. Which means if I'm paying $300 to get 2000 bucks per client, I'm literally printing money, right? Like in that example, if we do 202,000 divided by 300, you're getting a 6x return on money. There is no singular investment in the world that is legal that you can consistently, like, you can consistently get a 6x return on your money, right? Which brings me to my next point, which is when you're finding, when you get the 6x, you need to dump more money in, right? So that's cac to ltv. Let's talk about the second thing. When you find a good cost to acquire a customer to lifetime value ratio, you need to spend more. Okay? You need to spend more. We just brought on a coach for our marketing program where basically we generate leads for agents, we do all the marketing for them, and then we even place like expert coaches to essentially like help them grow their sales. So this guy in particular, this guy's an IUL agent who sold $100,000 in one single month in IUL, right? Not business, that like, he wrote it and then it charged back, like actually wrote business, like solid business that stuck. $100,000, right. And so that's just one of the coaches that you guys get access to when you join our program. Not, not to be a pitch fest for the program, but I mean, it's really freaking good. And if you want quality leads, that's the place to be. Anyway.

This guy, we were talking on a, on a coaching call the other day, and most agents, when they come into Our program, they're usually spending about 80 bucks a day. Right? $80 a day. Cool. And you may be saying, wow, that sounds like a lot. It's not. And I'm going to show you why. So if I spend $80 a day, let's say there's 30 days in a month, 80 times 30. And when I say 80 a day, I'm meaning on leads. Right? They're spending $80 a day on leads, which basically we run ads for them on Facebook. So their budget is 80 bucks a day that they run the ads on Facebook. If you have questions about that, let me know. What is 80 bucks a day? Well, 80 bucks a day is $2,400 a month.

On leads. That's all. You're spending 2,400 bucks a month on leads. Okay, now again, what is a good cost to acquire a customer to LTV ratio? Well, if it's anything above a 2, you're doubling your money. If it's a 3, you're tripling every dollar that you put in. If it's a four or five, like throw the frickin kitchen sink at that thing and like scale, right? So 80 bucks a day is 2,400. So even if, even if you were five, Xing your money, if you 5x2400 times five is only $12,000.

Right? So if you're getting a 5x return on your money spending $80 a day, you're only riding 12k in AP. Now, is anybody here watching this? Are you happy with $12,000 in annual premium per month? The answer is yes. You need to raise your goals because that is not a lot at all. That's nothing. So if you're spending 80 bucks a day and you're getting a 5x dude, why not just spend 300 bucks a day? And now you may be saying 300 bucks a day, that's $9,000 a month. Like, yeah, you're right. But if you do 9,000 times five now instead, instead of doing $12,000 in AP, now you're doing $45,000, right? You're doing $45,000 in AP, which is a lot more money in your pocket. And so like, the shift that you have to have is like, so many of you guys are. And I mean this in the best way possible. I'm not trying to be condescending, but you need to get the point. Some of you guys are so worried about paying more for leads than you are on your rent and your other expenses. That holds you back from making more money. And it actually costs you money because you have a limited mindset around spending more money on marketing. Right? Your leads are what gets you money. So spend like hell on the leads. Spend a ton of money. I spend $4,000 a day on marketing as of the time of filming this video. And I'm spending more and scaling, right? Like that's 120 grand a month. That's insane. Okay, so like.

Don'T let your limited mindset hold you back. I'll give you guys an example. Okay, so I'll give you three situations. Number, number one is, let's say you spend 1k on marketing and you do 10k in sales. Okay, cool. Number two, you spend, let's say 17k on marketing and you do 50k in sales. Okay. Number three is you spend 50k on marketing. Oh my God. 50k in a month. That's insane. And you do a 100k in sales. All right, now in these three situations, this is a 10 to 1.

This is a 3 to 1, and this is a 2 to 1. So which of these situations are you taking? You taking the 10 to 1, the 3 to 1 or the 2 to 1? I'm taking the 2 to 1 all freaking day long because guess how much I'm making 50k here.

Here I'm making 9k.

Then here I'm making. What is that, 23k? No, 33k here I'm making 33k. Just pick. Which one do you want? I'm taking this all day long. Right? But so many of you guys get caught up on like, how can I get the 10 to 1? How can I get the 50 to 1? Like, yeah, that's cool at a small level. But like, when you spend more, if it's profitable, just keep spinning into it and increasing the LTV on the back end. So that's the biggest thing, right? You guys just, you get so caught up in like, ah, I want to, I want to spend a thousand dollars on marketing and do 50k in AP. It's like, yeah, that's a great idea. But it's just like, it's not realistic. Right. You know, it'd be cool if an angel would come down from heaven and give me a back massage right now. Right? But I'm not going to stop taking action and wait for that to happen because it probably won't happen. Right? So focus on the real. Focus on realist, like realistic numbers and, and when you find something that's profitable, scale it like crazy and put more money in. Now to go back to my point, the guy that wrote $100,000 a month, guess how much he spent on marketing that month? $15,000. Now some of you guys watching this video actually have the same skill set or maybe even better than this particular guy. But you're too scared to spend $15,000 in a month, so you'll never do 100 grand. And so hopefully this video puts that in perspective and helps you make that mental shift. Now the last, last one I'm going to talk about is ultimately you need to separate your finances. All right?

A lot of you guys, you pay for your leads out of the same bank account that you pay your rent. And that is like that is the worst possible thing that you could do. Alright, what you need to do is basically this is kind of the structure that you want to have and this is like, I mean I'm going pretty in depth here in this video. So if you guys are getting value from this, please leave a like and if you want to work with us in a further capacity and get more consulting like this and be able to show up to like live coaching calls where you can ask me questions and work with our coaches. And on top of that, have us generate all of your leads for you that are high quality and pre book on your calendar. I'm basically making this into a pitch. But if you want all of that, there's gonna be a link down below in the description. Just click on that. You can book a demo call with our team and you know, we'll help you make more money in the insurance industry. Lot more money. This is just a little, a little taste of the stuff that we do. So anyway, what you need to do is essentially you need to have your business account and then you need to have a personal account. And I'm gonna show you guys like how to structure this in just a sec biz.

Personal. All right, just gonna do purse. So essentially what happens is whenever you get commissions from, from insurance carriers they're. Unless you're like captive and you're getting paid by your IMO, you're going to get a 1099 from all of the insurance companies. Now what I personally like really recommend doing is just having a LLC that is licensed and the business is what gets paid. Because that's what I do personally, I find that that works a lot better. So your 1099 gets issued and your money from the commission. Right. I'm just going to remove 1099. Your commission gets paid into your business bank account. Right. This is like money alchemy type of stuff. This is what all the top agents and agency owners do. So their commission goes into the business. What comes out of the business is lead expenses, right? Leads softwares, right?

You start working with our team, you would pay us out of your business account, right? Wink, wink.

So I'll just put am.

We're basically a growth partner for insurance agents and agency owners. So that comes out of the business. And then essentially what happens is you also want to have this little like side bank account. Actually move this over here. So you also. What I highly recommend doing is because in insurance we have this little thing called chargebacks, in case you haven't realized. You also want to have like a side bank account right here. I would use a high yield savings account. So I'm gonna say h.

Y high yield savings account. Now what you're gonna do is you need to figure out whatever your chargeback percentage is. So let's say 70% of your business stays on the books. You're gonna put 30% of all your commissions into this high yield savings account. And then, you know, you can wait six months to a year, and then afterwards you can access this money. But this essentially just becomes like a. It becomes like a savings account for your business, right? So essentially, like whenever you sell a policy, you're essentially getting a loan from the insurance companies. It's a no interest loan. And so if you take that no interest loan and then you put that into a high yield savings account, you're essentially earning interest on money that you don't even own yet, which is amazing. So I recommend doing that. This is this. What I've found is this makes it much more. You feel a lot more secure when you have this because when you get a charge back, you just take it out of the, the chargeback reserve account. So we just call this reserve account, right? You essentially set up your own reserve account. And what's really cool is it starts to get pretty, pretty big. Like ours is in the multi, multi, multi five figures just from setting it aside into a reserve account. And it just builds and builds and builds. And then if you get hit with the chargeback, you're not then all of a sudden screwed. You just take it out of the zerv account. So that's the point. So commission comes in, you pay for your expenses here. This is all tax deductible. So when you go to do your taxes at the end of the year, you can write all this stuff off. And then what you need to do is to pay yourself.

Okay? So you need, when you pay yourself, you're gonna pay yourself out of the business account and essentially give yourself, like, a monthly salary kind of thing that goes directly into your personal account. And then from your personal account, this is where you're gonna do, like, your living expenses, essentially, right? This is where you do everything here. Okay? And what this allows you to do, and the reason I'm talking about, like, the way to structure your bank account is because most people just do everything through here. And then what happens is, like, their personal expenses get too high one month, or maybe the business loses money and they have no idea what's going on. But with this structure, I can now see, hey, is my business consistently making money and paying my personal expenses, or is my business sick? Right? It's ill. It's not performing the function that it's supposed to do, which is continuing to survive and funding my personal expenses. And in that case, I need to do a deep dive. Maybe I need to hire AAM to come in and help me fix that, or I need to just do a deep dive and figure out, like, why is my business not making as much money as it should and. And fix that. So that is ultimately continuing to function. So, ladies and gents, those are the three things you need to know to stop being a broke agent who's smashing your face against the wall trying to squeeze money out of dead leads, and instead turning into a business owner that's printing money like so many people do in the insurance industry. Take care. See you guys soon.