NAFIC Heritage Archive

My Promise

By Bill Klein, FIC

Originally Published in FIC Perspective • May-June Issue, 2006

As I had promised in our first issue of "FIC Perspective", I will share with you my most effective tool in selling life insurance today.

But in order to do that, I must begin from when I started in the business back in 1980 with Catholic Knights. I was assigned to an area that hadn’t had an active agent for sometime, nor a manager. I was wise enough to start getting educated and therefore began my FIC courses and attended LUTC classes in hopes of learning what this business was all about.

I immediately started contacting members in my area who had policies with Catholic Knights to see if I could be of service. The key word here was “Service”. Not having had service for sometime, I found myself doing a lot of service work.

By doing service work I started meeting people, and within a short time I was asked to attend Branch functions and meet people as a group. I’ll never forget my first function, 11/15/80, a Thanksgiving Day celebration, when I was asked to say a few words. Realizing that most of the people in attendance represented the older generation, I talked on the value of purchasing a Catholic Knights annuity. In my first year of business, I sold in excess of $1 million in annuity premium.

Now let’s see, I have the opportunity to attend a Branch function, meet people on a favorable basis and give a short presentation of what Catholic Knights and I can do for them. It’s amazing that more fraternal agents don’t come to realize the great opportunity they have - a ready made target market with a built in seminar setting.

Now for the sales idea! I was effective over the years in selling non-qualified tax deferred annuities as well as IRA annuities. I have read statistics that anywhere from 65% to 75% of tax deferred annuities are never touched. They eventually are transferred to a spouse or paid to other named beneficiaries at time of death.

In any case, we are now looking at an accumulation vehicle with a significant gain. It is not unusual to see a 150% gain in an annuity that will represent additional income to be reported by a beneficiary.

Also, by now it is not unusual for many members to say they have no intention of using this money and have all intentions of passing it onto the kids. With that in mind, I will suggest to my members, one of two concepts:

In the above, I mentioned what I do with non-qualified annuities, but the same concept can be used with Qualified annuities. The obvious difference being any withdrawals will be 100% taxable.

But think of the advantages:

1. A taxable account can become non-taxable
2. Members have no choice and must make RMD (Required Minimum Distribution by 70 ½)
3. With the life insurance in place, a spouse as the beneficiary can convert a regular IRA into a Roth IRA, that not only is tax free to her, but to her beneficiaries no matter what further growth might occur.