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Principles of Agency Building 9th Edition May 12,2009

Principles of Agency Building 9th Edition May 12,2009. By: Roberto H. Bruce , MS, CLU, ChFC, LUTCF Cavaliers Insurance Marketing. Rights Reserved. Agency Building Opportunity. Rights Reserved. Strong Company Unique Products Ground floor Agency compensation. Rights Reserved. Train.

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Principles of Agency Building 9th Edition May 12,2009

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  1. Principles of Agency Building9th Edition May 12,2009 By:Roberto H. Bruce, MS, CLU, ChFC, LUTCFCavaliers Insurance Marketing Rights Reserved

  2. Agency Building Opportunity Rights Reserved • Strong Company • Unique Products • Ground floor • Agency compensation

  3. Rights Reserved Train Recruit The Ultimate of Selling is Agency Building Sell

  4. Term – Insurance For A Specified Period $ Rights Reserved CCOI $ T T age T1 T2 1 Flexible Premium2 Adjustable Death Benefit3 Current Interest Rate4 Guaranteed Interest Rate UL

  5. Premiums Rights Reserved YR 1— $5,000— $4,000 $ 2—10,000 — 5,000-9,0003—15,000 — 7,000-16,0004—20,000 — 5—25,000 — 6—30,000 —7—35,000 — Net Level 7 Pay Test Tamra 88 eg. $5,000 M.E.C Annuity Single eg. $25,000 Guide Defra 85 Level eg. $2,000 Target Minimum Premiums

  6. TRA’ 86 Rights Reserved PREM InterestIncome PREM PREM PREM Interest Income FIFO LIFO INSURANCE ANNUITY 59 ½ - 10% Penalty

  7. Life Insurance Tests • Guide Premium • Corridor – Age 95 Rights Reserved

  8. Options Rights Reserved $ 100,000 Amount At Risk OPT ALevel Face Amount Savings T t1 95 $ 100,000 OPT B Increasing Face Amt or Face Amt + Savings Amount At Risk Savings T t1

  9. CCOI+ Policy Fee+ PREM Charge+ Charge / $1,000 TCOI = Policy Costs Rights Reserved PREM – TCOI = Policy Fund Cash Accumulation Value Policy Fund – SURR Charge = Cash Surrender Value Cash Value

  10. Hierarchy of Life Plans Rights Reserved • Whole Life • Universal Life • Term

  11. Rights Reserved Parties To A Contract • Owner • Insured • Beneficiary Three - Gift Tax One - Estate Tax Two – Recommended Disclaimer, if not taken

  12. Waiver Of Premium Rights Reserved • In case of disability • Always recommend • Disclaimer, if not taken

  13. Beneficiary(ies) Rights Reserved • Primary • Contingent / Secondary • Per Capita • Per Stirpes

  14. Product Spectrum Rights Reserved Life DI CI LTC GT 10T 15T 20T 25T 30T T95 UL WL ParANICOAssurity Assurity Assurity Assurity Sagicor AFANICO Assurity SagicorLBL AF AssurityLBL AFANICO AssuritySagicor LBL AF AFANICOSagicorLBL AF ANICOLBLAssurity Non-Par Simplified Issue Big Cases LBL/ANICO Small Cases  ANICO/AF/Assurity/Sagicor Preferred/Big Cases  LBL/ANICO Standard & Below  ANICO/AF/Assurity/Sagicor Assurity AF Sagicor

  15. Annuity Rights Reserved 1 or more premiums (accumulation) 1 or more payments (distribution) Tax-Deferred 59 ½ 10% Penalty Ordinary income Capital gains 1 – Single premium Immediate – SPIA Deferred - SPDA 1 or more - Flexible premium FPA/FPDA FIX – General Account VARIABLE – Separate Account QUALIFIED NON - QUALIFIED IRA (Front)-70 1/2DEDUCTIBLE NON-DEDUCTIBLE ROTH-IRA (Back) DIRECT TRANSFER / ROLLOVER / CONVERSION 1035 Exchange TRADITIONAL IRA / ROTH-IRA / SEP-IRA / SIMPLE IRA INDEX / TREASURY LINKED / MYG/MVA

  16. Annuity Ideal Cases Rights Reserved • AFA(FPA $25/mo - $10,000/yr) • Sagicor/Assurity(SPDA $2,000) • ANICO(SPDA $4,000Q/$5,000NQ) • LBL(SPDA $10,000) • LBL(FPA $3,000Q/$10,000NQ)

  17. Plan Distributions – When to? Rights Reserved • Die, Disabled, or severance from employment • Plan terminates, no successor plan • 59 ½ • Financial hardship* *Cannot rollover to IRA

  18. Early Distribution Penalty(Plan, IRA, Annuity) Rights Reserved • 10% additional tax on distributions under age 59 ½ • In addition to any regular income tax on the amount

  19. Penalty Free Plan Early Distributions Rights Reserved • Death or Disability • Distributions over life expectancy on termination of employment • Service separation after age 55 • Qualified domestic relations order • Medical expenses over 7 ½ % of AGI • Distribution election by March 1, 1986 • Dividends on employer securities • IRS levy of plan • Qualified reservist distributions

  20. IRA Rollover Rights Reserved • Distribution from one qualified plan • Contribution to IRA within 60 days

  21. Types of IRA Rollover Rights Reserved • Direct - qualified plan to IRA, no 20% tax withholding • Indirect - qualified plan to individual to IRA, with 20% tax withholding

  22. IRA Rollover Exceptions Rights Reserved • Series of substantial equal payments based on life expectancy, or 10 or more years period certain • Required minimum distribution (RMD) • Corrective distribution • Loan treated as distribution • Hardship distribution • Dividends on employer securities • Cost of life insurance coverage • Distribution to beneficiaries

  23. Penalty Free IRA Early Distributions Rights Reserved • Unreimbursed medical expenses over 7 ½ % of AGI • Not more than cost of medical insurance • Disabled • Beneficiary of deceased IRA owner • Distribution in form of annuity • Not more than qualified higher education expenses • Used to build, rebuild first home $10,000 or less • IRS levy of qualified plan • Qualified reservist distributions

  24. Required Minimum Distributions(RMDs) Rights Reserved • Minimum amount to withdraw annually starting with year at age 70 ½ , or if later, year retires (except 5% business owners) • Amount not withdrawn taxed at 50%

  25. Rights Reserved Placement Ratio • Issued over submitted apps • Pre-qualify prospect • Concept selling • Trial app / no initial premium for borderline cases • Initial payment w/ app • More apps, e.g., Juvenile plans • Case follow-up

  26. Rights Reserved Persistency Ratio • Active over issued policies • Modal payment hierarchy • Annual, 7 Pay, or Single • Monthly bank draft • Semi-annual • Quarterly • Monthly direct billing • Client contact/review • Improve placement ratio

  27. Goal Setting Rights Reserved • $$$$ • Sale/Network • Appointment • 1. Calls ——————— 3 min NO NameCompanyPurposeAppt. $TimeNeed T1 T2

  28. Goal Setting $250,000 – ESD/SGA$100,000 – MDRT $50,000 – Convention $_______ A.P. Goal÷$_______ A.P./Sale Sales/Year x_______ Appt/SaleAppts/Year÷52 Wks 100,000 Rights Reserved 1,000 ___ min/call ___ calls/appt ___ hrs/appt ___ appt/sale 3 20 100 2 2 2 200 1,000 $_____ Annual Prem (A.P.)/Sale 4 Appts/Wk x_______Calls/Appt 20 80 Calls/Wk x 2 Hrs/Appt x 3(min/call)/60(min/hr) 8 Appt Hrs/Wk 4 Call Hrs/Wk + 12 Hrs/Wk Total

  29. Aalliance Management Expectation/Commitment(Calendar Year) Rights Reserved Rights Reserved

  30. Agency Building Blocks Rights Reserved 1) Recruit - Producer, Recruiter 2) LEG 3) Magnificent “Seven” 4) Rule of “Three” 5) Principle of the understudy 6) Bottom/Top Approach 7) Recruit-Train-Sale Cycle 8) Teamwork/Involvement 9) Lead from the front 10) Quality vs. Quantity – Collect/Select 11) Generalization-Specialization Cycle 12) Simplify - KISS 13) Sowing/Reaping - Stout-Hearted 14) Set the example 15) Go forth and multiply 16) Numbers game - +/-, Attrition, Prime, Progression 17) Curves- Straight line, Pulse, Supply, Ravine / Death-defying, Crash-landing, Sine, Square, Cubic 18) Anarchy a) Absence of Rulesb) Rules are impossible to implementc) Nobody is implementing the rulesd) Rules are being violated with impunity 19) Five Pillars - Professionalism, Persistency, Perseverance, Production, Proficiency 20) Management Cycle - Planning, Organizing, Staffing, Directing, Controlling 21) Goal Setting 22) 7 C’s of Success - Commitment, Competence, Concentration, Consistency, Creativity, Control, Conduct 23) Maximin = Minimax

  31. Rights Reserved Recruit • A recruit is not a recruit without a recruit • A recruit is both a producer and a recruiter

  32. Rights Reserved LEG A leg is not an effective leg without another leg

  33. Rights Reserved Magnificent “Seven” • Tested to be the most efficient • Seven members of a squad • Seven days in a week • Less-not enough, inefficient More-Too much to handle

  34. Rights Reserved Rule of Three Out of the seven, select your best three

  35. Rights Reserved Principle of the Understudy Out of your best three, select your understudy that can duplicate or replace you

  36. Rights Reserved Bottom/Top Approach • Service the bottom • Inform all at the top

  37. Rights Reserved Financial Independence RECRUIT SELL Marketing Structure Professional Development TRAIN Cycle of Success

  38. Rights Reserved Teamwork/Involvement • No man is an island • The whole is more than the sum of its parts • Congregation

  39. Rights Reserved Set The Example Lead from the front in sales, recruiting, and training

  40. Rights Reserved Quality vs. Quantity Collect and collect; and then select

  41. Rights Reserved Generalization/Specialization Cycle

  42. Rights Reserved Simplify K I S S Keep It Simple and Sincere

  43. Rights Reserved Sowing/Reaping • What you sow you reap a thousand times • Stout hearted men

  44. Rights Reserved Go Forth and Multiply • The ultimate of selling is in agency building • If you don’t talk about recruiting, it will never happen

  45. Rights Reserved Numbers Game +/- Attrition Prime Progression Arithmetic Geometric

  46. $ $ Rights Reserved $ $ $ $ $ $ Pulse Straight Line Supply Sine Ravine/Death Defying Cubic Crash Landing y Square $ y y y y y y y y Curves

  47. Rights Reserved Why Anarchy? • Absence of Rules • Rules are impossible to implement • Nobody is implementing the rules • Rules are being violated with impunity

  48. Rights Reserved Five Pillars Professionalism Persistency Perseverance Production Proficiency

  49. Rights Reserved Management Cycle Planning Organizing Staffing Directing Controlling Always go back to planning every time there is a hitch

  50. Rights Reserved Book of Success Front Cover: Goal Setting Body:7 C’s of Success Commitment Creativity Competence Control Concentration Conduct Consistency Back Cover:Maximin=Minimax • Maximize profit, subject to minimum utilization of your own resources • Minimize cost, subject to maximum utilization of other people’s resources • Should be balanced

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