“And Here’s How I Sold That BIG CASE” – Part 2

Top Producers Share the Secrets Behind Their Hard Won Cases

THE LORE OF THE INSURANCE business is strewn with tales about big insurance cases that fizzled. But some professionals have a far more compelling story to tell: how they landed a really big case despite client uncertainty, complex needs and wants, and very long timelines. Following are examples from advisors who have successfully landed big cases in life insurance, annuities or estate planning. These stories are rich with detail about working with high-net-worth clientele. They show clients who don’t want to plan, others who object and quibble, and still others who don’t want to spend a dime, not even on themselves. They showcase advisors who overcame hurdles with patience, perseverance and sensitivity to each client’s unique circumstances, needs and emotions. The strategies vary from case to case, but most share a few common threads. The big case experts work with, and through, other professionals in the community who serve high-net-worth clients; listen to what the client wants and what the client’s other advisors are saying and then address the underlying need; don’t pander to the clients; do educate the clients; and work on the case for a long time, sometimes as long as a year or more. Each advisor agrees that big cases are complex. It is their job to pull the pieces together into an orderly and effective solution.

Sometimes a big case starts out with rejection. But with patience, consulting with the client’s advisors and creative solutions, the “no” turns into “yes.” That’s what happened to Marc Silverman. As the president of Silverman Financial and a 26-year MDRT member, Marc recalls that his first encounter with the ex-wife of a famous sports figure was less than positive. The woman had a $7.2 million variable annuity (VA) with a death benefit valued at roughly $12.2 million at the time. Her investment banker believed the VA might not be in the woman’s best interests, so he asked Silverman to see her. The banker is in Silverman’s professional network, so Silverman decided to take the referral. “I could see that she didn’t need the annuity,” he recalls. She would have been better off surrendering it and placing the funds—after deductions for taxes and income in respect of a decedent (IRD)— with the investment bank. The woman didn’t want to do that, however. Silverman explained, “She wanted to keep the annuity because she wanted the $12.2 million death benefit to be available to pay for care for her son—who was in a wheelchair—in the event of her death.” The initial no was not the end of the story, however. Over the next several months, Silverman says he developed a plan that would meet her need more effectively. First, he showed his client that the actual funds available to heirs would amount to only $5.1 million, not the $12.2 million she was anticipating, if she were to die right then. The lower amount would result from deductions from policy proceeds for taxes and IRD. Next, he showed the woman that if the VA death benefit grew at 6 percent a year and, she were to die at the end of her natural life expectancy in 18.6 years, the heirs would get only $8.1 million from the VA, even though the death benefit would have risen to roughly $21.3 million by that time. Again, deductions for taxes and IRD would have taken the rest. Then, he proposed an idea: “If you drop the $7.2 million VA today, you will receive $6.4 million after taxes. You can take that to your investment bank to invest in tax-free bonds for you. Assuming the bonds earn at least 5 percent on the $6.4 million, you will have $320,000 a year. After gifting the premium to your son to purchase insurance (that will be out of your estate) and after deducting a gift tax of 30 percent a year, the amount you’d have left would be $234,000 a year.” He proposed using the $234,000 a year to buy a guaranteed universal life policy on the woman that had a $14 million face amount. The woman still resisted but asked her CPA to look the proposal over at a meeting among the three of them. By coincidence, the CPA was a friend of Silverman’s. Even so, it looked as if the deal would not go through. “Then, just before leaving, I did a Columbo,” Silverman says. “I said, ‘By the way, you might want to look this over.’” He handed the CPA one sheet of paper that outlined the plan in simple terms. “The CPA was convinced, and he sold her on it,” says Silverman. After seven months, the case was closed. Lessons learned? “People must know you, like you and trust you, or there is no sale,” says Silverman. “It may take six or seven months or maybe even a year. But be patient. Remember, the cases are complex, and the clients are going to spend a lot of money, so they need time.” Also, cases move faster if you get the client’s advisors involved as soon as possible, Silverman says. Finally, “network yourself very well in places like charitable organizations and country clubs,” he says. “Your network is a source of good referrals.”


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