Do you know what the future will bring?

Question_PuzzleI find that my membership in NAIFA, the National Association of Insurance and Final Advisors, can not only advance our causes politically, but can also expose me to great learning opportunities. That happened to me recently when my local NAIFA chapter brought in a famous top of the table agent, Van Mueller, for a presentation on how he sells. It was the best sales presentation I ever heard.

Van is an extremely skilled presenter, but his approach is very simple. He engages the prospect by asking a series of questions, rather than by presenting a product. In doing so, he gets the prospect to admit that he or she needs to change their “strategy” in order to have protection in the future.

Van’s main hypothesis is that we don’t know what the future holds for us, especially economically. He cites our history of major economic upheavals every fifteen or twenty years. He quotes economists who predict periods of uncertainty and economic crises. He creates uncertainty and then proposes relatively safe strategies to deal with this uncertainty. By questioning what the future will be, he can show that a change in the prospect’s strategy can protect him or her and even in many cases take advantage of future volatility

The central argument here concerns the dilemma that our government faces. The government is taking in far less money than it is spending. It is propping up our economy by printing money and authorizing increases in debt. It is allowing heavy bank investment in risky derivatives which directly led to the severe recession of 2007.

Van says that no one knows for sure whether another economic crisis will occur, including him, President Obama, Ben Bernanke, George Romney, Janet Yellen, etc. He asks the prospect, “Do you know what the future will bring?” He cites that Ben Bernanke has 80% of his assets invested in insurance company annuities despite the fact that he headed all US banking. The he says, “Let me ask you a question. Why would Bernanke be doing this? He must believe that an investment with an insurance company is safer than an investment in a bank.”

Then he asks his main four questions. He sets up each question by saying, “Let me ask you a question.” He doesn’t want to tell the prospect…he wants the prospect to come up with the logical answers to his questions which lead to the prospect’s desire to change a strategy to deal with a problem or concern. The first question is, “Do you think that the government will raise taxes in the future, yes or no?” He almost always gets a yes answer. The second question is, “Do you think that the government will lower benefits, yes or no?” He almost always gets a no answer.

Then he says, “Because you think that the government won’t raise taxes or lower benefits, will the government have to continue to print money as it did with TARP and quantitative easing, and will this in time create severe inflation? Inflation is the stealth tax. What will you do ten years from now if we have 7% inflation and the value of your assets becomes half of what it is now? Does your present strategy deal with this problem?” The answer usually is, “I didn’t think of that.”

Finally, the fourth questions is, “These factors will create increasing volatility. There will be ups and downs, and a lot of downs. If I could show you a strategy that would protect you from all this volatility at no cost or obligation, would you be willing to consider it?” The answer is, “Sure.”

If the prospect has come to these agreements in his or her own words, the sale has already been made. Then Van does a brief fact finder and quickly proposes a strategy which will keep the prospect safe from all this future volatility.

This sales approach makes a great deal of sense to me. It can be used with long term care insurance as well as with other financial products. I suggest that you practice it and see if it works for you.