CHAPTER

THREE

The Delivery Interview

You have made the appointment to deliver the policy, and now it is time to keep that
appointment. Before you see A. Buyer, let’s do some reviewing and preparing of our
attitude.

Think back to the time of the sale. What kind of person is A. Buyer? What
“language” does he or she speak? Remember, just as in the sales interview, you want to
talk in readily understood terms. You are not going to educate; instead you are going to
deliver the goods that will solve a problem – making sure that the client understands what
was bought and why.

A policy is not just a piece of paper; it is a valuable document. Handle it as such.

What about your attitude? When the sale was made, it was certainly a great
occasion for you. Let’s make it a great occasion for your new policyowner. Besides this may
be an even greater occasion for you. Remember the principle: “Behind every sale is a
market more valuable than the sale itself.”

An Organized Procedure

Just as in the case of the selling interview, it is wise to have an organized procedure
in the delivery interview. There are eight steps in “buttoning up” the case. Many agents
keep an outline of these steps in front of them during the delivery interview. Use of an
outline makes certain that the right ideas are presented in the right sequence.

You will find two additional benefits as a result of this procedure. First, your
interview will take less time, and second, you will find yourself making the call with
increased confidence and enthusiasm.

Here is the eight-step delivery interview:

1. Extend congratulations.
2. Explain each item on the policy delivery card or policy summary sheet. Make certain
that the need for the policy is resold at this point.
3. Explain the policy provisions marked for explanation when you prepared the policy for
delivery. (Get the money here if it was not collected when the application was completed.)
4. Complete the fact-finding questionnaire – partially completed from the application.
5. Glide into the next sale:
a. Review a sample program or explain your personal insurance program.
b. Show suggested allocation of the client’s insurance.
c. Get a commitment on what need or needs the client feels to be most pressing, by the use
of two questions:

(1) “If you were going to buy, which one of these needs you would want taken care of?”
(2) “Why?”
d. Ask the prospect to buy today – he or she may not be able to qualify tomorrow.
6. Sell the value of your services.
7. Get new prospects. Use the questions prepared from an analysis of the application
attached to the last page of the policy.
8. Congratulate the new policyowner again as you are leaving.

There are a number of instances where the eight – step formula will be modified and
perhaps changed – for example, the delivery of a policy or policies in an estate-planning
case, a business insurance case, or the delivery of a programmed case. The procedure is
fundamentally the same in every case. First, reestablish the problem – the need for the
policy. Second, show how the policy solves the need. In almost every case, the last two steps
would be sell the value of your service and to get prospects.

1. Extend Congratulations
There are two reasons for congratulating the client. Not everyone plans ahead for
the future. If everyone did, the market would be almost saturated in a short time, and you
know from your own experience that you seldom talk to a prospect who has found the
solution to all needs in this respect. Your new policyowner has taken a step in the right
direction – so congratulate him or her on doing so.

Second, not everyone can purchase insurance – regardless of their financial position.
Many people think that it is not much of an accomplishment to qualify for insurance.
However, this is the one piece of property that money alone can’t buy, for the insured must
be a good risk physically, morally, and financially.

2. Explain the Policy Delivery Card or Policy Summary Sheet.

Remember that the reason for preparing this form was twofold: (1) to give a “track
to run on” during the delivery interview, and (2) to leave the insured with an explanation,
in simple terms, of what the policy will do.

As you know, any one policy will lend itself to the solution of several different needs.
Hence, the form that you have prepared, highlighting the benefits of the policy, may not
lend itself specifically to this particular interview. When reviewing the form, you will, of
course, want to relate the form to the particular sale.

On what basis was the contract purchased? Was it a last-expense fund, an

emergency fund, a dependency income, a readjustment fund, or some other need? An
ordinary life policy, for example, will lend itself to almost any need because of its flexibility.
In going over your “policy brief,” you will therefore want to highlight the benefits of the
policy in relation to the need for which the policy was purchased.
 At this point, you have reestablished the need for the purchase of the policy and
have shown the client that you have delivered the goods for the solution to the problem.
This is the first mission of the delivery call-showing the new policyowner what was bought
and why it was bought.

3. Explain the Policy Provisions

Your new policyowner may ask you, “If this policy summary that you have
prepared for me really explains the benefits of the policy, why do you have to have a
contract with so many pages and tables in it?” This is a logical question and you should be
ready with a good answer.

The policy and the application constitute the entire contract between the
policyowner and company. During the lifetime of the contract, many questions may arise
with regard to the benefits provided by a policy, and the answers are in the contract itself.
What happens, for example, if the mode of premium payment is changed …the premium is
late in getting to the company ….the policy lapses and needs to be reinstated? How can the
beneficiary be changed? The policy brief indicates that there are some guaranteed values in
the contract. The question is, where are they found? If a loan is made on a policy, what rate
of interest is charged? If the policy is worth money during the lifetime of the insured, can it
be assigned? Are there dividends on the policy and if so, how can they be used?

These are just a few of the questions that will naturally arise in connection with the
policy, and the answers to each are found in the contract itself. The language in an
insurance policy may seem confusing to the new policyowner. Here is an opportunity for
you to perform a real service and at the same time to establish additional prestige for
yourself by explaining the provisions in the contract in language that the client can readily
understand.

Many agents explain briefly all of the policy provisions. They give five reasons for
doing this:
1 . It may never have been done before.
2 . It is an opportunity to dramatize the policy benefits.
3 . It builds prestige and is an opportunity to display your knowledge.
4 . It convinces the policyowner that you are sincere in your desire to be of service.
5 . It helps improve persistency.
As far as the client is concerned, the explanation of the policy should answer four
questions:
1 . What happens if I die?
2 . What happens if I live?
3 . What happens if I stop paying premiums?
4 . What do I pay?

What happens if I die? The face of the policy will state, in effect, that the company
will pay the face amount of the policy to the beneficiary upon receipt of due proof of the
death of the insured, subject to the terms and the conditions of the policy. To most people,
this means that if the policy is in full force and effect at the time of death, a lump sum will
be payable to the beneficiary. Few people are aware that a contract is much more flexible.

Your main objective when explaining death benefits should be to illustrate the
flexibility of the contract and to explain how the various settlement options can be used to
solve the need for which the policy was purchased. You can get really excited about these
provisions and what they mean to your policyowner. These are unique provisions. The
company is obligated to guarantee interest rates and payments are made.

If the new policy is not part of a program that you have already prepared for your
policyowner, you can indicate at this point why you should program his or her insurance.
What about present policies? How much will they provide in the form of family income?
For how long?

What happens if I live? Don’t fail to stress the living benefits of the contract.
Impress on the buyer the fact that a life insurance policy has two beneficiaries, the
beneficiary named in the contract and the insured. Get your clients to view life insurance
not purely as death insurance, but to view it in accordance with the name that we have
given it, namely, life insurance.

Be specific in showing your policyowner how the policy proceeds can be used in the
event that retirement age is reached. For example, you can show the amount of
accumulated cash value at age 60 or 65. Illustrate how the settlement options can also be
used to provide income for the insured at retirement.

Whether explaining living benefits or death benefits, it is well to keep in mind and
perhaps explain to your client that the life insurance contract is not the property being
bought – it is merely the deed to the property. He or she is guaranteeing money for future
delivery. The benefits of life insurance are not intangible. There is nothing intangible about
money that answers a very real and pressing need. The confusion comes as a result of the
fact that the funds are for future delivery and the assumption that it is the life insurance
contract, the policy that is being bought. The policy merely passes title to property: It is not
the property itself.

What happens if I stop paying premiums? It is generally accepted as being a good

delivery technique to thoroughly explain the non forfeiture provisions. At first glance, this
section of the policy may look confusing to your policyowner. He or she may have a mental
barrier at this point because of a lack of understanding of exactly how life insurance works.
You can be of tremendous help at this time.

Let’s look at the word “nonforefeiture.” When we speak of “forefeiting” something,

we mean that we have to give it up. The word “nonforefeiture” simply means that these are
values that you do not give up. The wording of this nonforefeiture section is also explicit in
stating that the cash or loan values and paid-up insurance values should be multiplied by
the face amount of the policy to determine the values for this particular contract at any
given time. In the case of the extended term insurance provision, the length of time that
coverage is provided under this provision is the same regardless of the face amount; but the
amount extended depends on the face amount of the policy. This, of course, should be fully
explained to your policyowner.

The cash or loan value is a guaranteed refund in case the “property is sold.” The
extended term insurance provision may be looked upon as a “guaranteed option” for a
certain number of years during which time the policyowner may reinstate the title to the
“property” to its full value (provided, of course, that he or she qualify), or in the event that
the insured dies, the “property” will be sold at a guaranteed price and the cash paid to the
beneficiary.

The section pertaining to the paid-up insurance may be looked upon as title to a
certain percent of the property. For example, let’s assume that the contract is an
endowment at age 65, issued at age 35. If the policy is continued in force for 10 years, for
example, it means that the insured has paid for approximately one third of the title of the
property. If you will examine the paid-up endowment insurance column of such a contract,
you will find that the paid-up value at the end of 10 years is approximately one third the
face amounts.

A word of caution. You want your policyowner to know as much as possible about
what was purchased, but you can easily fall into a trap at this point and find yourself doing
more of a job of educating than is necessary, especially so if you become technical.
Remember, you are still selling. Keeping your language simple and using terms that the
buyer can understand will enhance your prestige.

What do I pay? Discussing the premium payment provisions gives you an

opportunity to stress the importance to the policyowner of making premium payment on or
before the due date. This keeps the grace period unused, with the advantages that it will
definitely be available when some unexpected and unavoidable emergency arises
preventing premium payment on the due date. Explain that if the policyowner forms the
habit of paying premiums during the grace period, he or she has practically nullified the
importance of the provision, because if an emergency arises at such a time, the policyowner
will not have the period of time provided by the grace period for arranging to meet the
premium.

Many policyowners abuse the grace period by using it in a manner that in practice
changes the renewal date of the policy to one month later than named in the contract. Too
frequently, we fear, this attitude on the part of the policyowner is due to the failure of the
agent to explain to the policyowner the result of constant use of the grace provision. Its
primary purpose is to provide a valuable safeguard for the protection of the policyowner in
the event of an oversight or of an unexpected lack of funds with which to pay the premium.
Keep the “days of grace” in reserve for a real emergency, which is the actual intent of the
grace provision of the policy.
 A study of the two-year persistency record of 7, 026 ordinary policies in the United
States points out that over 80 percent of lapses occur on policies in force one year or less.
This is true whether it is a monthly, quarterly, semiannual, or annual premium.

If the time is taken is taken to make sure that the policyowner thoroughly
understands the billing system and the proper use of the grace period, a positive step will
have been taken to prevent lapsation.

If you have not done so before, now is the time to show the cash build-up involved
by paying the premium on an annual basis. Many agents when delivering “C.O.D.” policies
save this point for the final one to be discussed. If when completing the application the
applicant wants to pay the premium monthly, quarterly, or semiannually, the agent shows
the exact savings to be made by paying annually, and then uses the “fatal choice” question
to lead into the request for the premium. For example, “Would you prefer to take
advantage of this cash build – up and make your deposit less frequently, or shall we leave it
the way it is set up here in the policy?” Regardless of the answer, you can infer consent and
then ask the policyowner to write a check or give you the money while you are preparing
the receipt. While your company may not require your giving a receipt for C.O.D. business
because the policy acts as a receipt for the premium, it is a good technique to introduce a
physical action on your part by completing a personal receipt, thereby indicating that you
assume that the policyowner is going to pay now.

4. Complete Fact-Finding Questionnaire

In the predelivery procedure, you partially completed your fact-finding
questionnaire. Now is the time to gather all of the facts concerning your policyowner. If you
are to do the best job in solving all of a client’s needs, you must have all of the facts. You
will be in a much stronger position as you glide into the next sale.

5. Glide into Next Sale

This is the best opportunity that you will ever have for a discussion of your client’s
insurance needs. The client is relaxed and doesn’t dream that you are about to start
technique. If you haven’t done much programming in the past, this is the place to start.
The pressure is off and you already have established some prestige with your client. It is
not difficult to secure any additional facts that you might need.

Show your policyowner a sample program, your own personal program, or a list of
common insurance needs. Explain briefly the problem behind these various packages.
Show what needs are now covered by the client’s insurance program. Come to the delivery
interview prepared to make some definite recommendations as to how the client’s present
program should be arranged. This not only makes available an additional service to the
policyowner, but it enables you to glide smoothly to the next sale. After showing the
policyowner the next two or three needs to be filled, ask this question: “Assuming that you
were going to buy more insurance today, which one of these problems that we have
discussed would you consider to be the most pressing?” Ask why this is the most pressing
need. It is amazing how many policyowners will actually sell themselves.
 The next step is to get agreement as to “when” this next purchase should be made.
Most agents using this technique feel that they must suggest that the client buy the
additional coverage needed today. They feel that these are a definite obligation to give their
client the opportunity of protecting his or her insurability. There is certainly nothing to
lose by pressing to see whether the policyowner is ready now.

Here is another effective idea. One outstanding agent gives this idea as being
responsible for much of his success:

“After I had been in the business for a short time, I came to the conclusion that if an
agent could have several hundred policyowners who would buy insurance regularly, not
necessarily in large amounts but on some regularly predetermined scheduled basis, any
production problem that I might have would be pretty well solved. So now when I sell a
young married couple, for example, I get them to agree to a simple plan - that they will put
one quarter of every pay raise into life insurance.

“They readily agree that this is a reasonable basis for planning and that I have a
real reason for coming back to see them each and every year. So far, it is working well.”

This is certainly a very profitable concept to sell your policyowners. If you like the
idea, why not prepare a reminder to use this idea along with the other papers that you
prepare for your next policy delivery? It is still the same old problem, the problem of
setting up a mechanical reminder.

6. Sell the Value of your Services

There is just one more sale to make before you complete the delivery interview,
offer congratulations, and make your exit-and this is a very important sale. There is one
factor that can make your policy a better policy, a better buy, than what can be found
elsewhere. It is the one factor that makes your policy unique. The one additional ingredient
that you must sell is your personal service. Tell your policyowner that three is one
additional benefit as a result of buying this policy, a benefit that is not to be found in the
contract itself. And that benefit is your services. Put yourself on the spot. Obligate yourself
to service your clients. Tell your clients that at least once a year, you will call on them to
carefully go over their insurance programs. Many successful agents set the exact date for
this service call before leaving the interview. Normally this call is set for a week or two
before the policyowner’s age change. Adopting this system not only gives your policyowner
the services that he or she deserves, but you will be highly paid for offering this service if
you will but follow through.

You can perform a real service for your policyowner at this point. What about the
policyowner’s existing policies? Are the beneficiary designations correct? Underwriting
rules of companies have changed over the years, and it may be that if the client has a policy
requiring an extra premium, it can be reduced or eliminated. Perhaps the existing
contracts have riders that can now be eliminated. The return on your time invested in
giving such service can be tremendous!
7. Get Prospects
You will remember that as a part of the preparation for this call, it was
recommended that you prepare a list of prospecting questions to ask the new policyowner.
Now is the time to use this list of questions. You have made your sale. Your former
prospect is now a policyowner. It’s the grand finale to your efforts. But this delivery call
must also be a curtain-raiser to new sales. Because you have made the type of delivery that
we have been discussing, your new policyowner is enthusiastic about life insurance. Now, in
the midst of self-congratulations, he or she should be willing to tell you of friends and
acquaintances who should have the opportunity to be equally wise and foresighted.

Now is the time to “strike while the iron’s hot.” The policyowner’s spouse may have
an insurance need; the children may be subjects for juvenile or educational policies.
Brothers and sisters of the policyowner are excellent names about which to make inquiries.
Inquire about business associates or those in a similar line of work. Don’t restrict your
interest to members of the policyowner’s own firm. For example, if the person is a
contractor, you might say, “Who are the five best architects in town? The five best
bricklayers? Painters most in demand?” How about neighbors? Get the exact addresses of
several well-kept homes in the neighborhood. Check the street directory for the names of
the owners. Qualify these names when delivering the policy and you are on your way to
making the “endless chain” theory a reality.

How did you secure your new policyowner’s name? If it was a referred lead, you are
in an especially strong position at this time. You may want to ask for additional prospects
in the following manner:

“It has been my pleasure to be of service to you in acquiring this plan. Before I
leave, I would like to ask for your help and advice on something.
“In my business I work with people, advising and helping them plan financial
security programs like the one that you have just stared. I am sure that you know some
other people who would have a need for this service. I would like you to think a minute
before you answer because I do not want select clientele such as you. That is why our
mutual friend referred me to you originally.”

At this point you will want to adapt your questions to the market in which you are
working. *
There are many effective methods of obtaining prospects when delivering the policy.
The important factors are to decide what method you will use and to have a standard
procedure of placing a mechanical reminder with the policy that you are delivering to
prevent an oversight of this very important matter. Remember the potential market behind
the sale is more valuable than the sale itself.

8. Congratulate the Insured

Don’t forget to repeat your congratulations when you leave. The policyowner has
made wise purchase, you are glad to be of service, and you appreciate the policyowner’s
help in with some new prospects. If you have made a define date to see the policyowner
again, include a reminder in your remarks.
 SUMMARY

Caution: Are you ready to follow through? Don’t make the preparation necessary
for the delivery call. Don’t spend an hour or so carefully explaining the new policy and a
recommended program. Don’t sell your services – unless you are going to resolve to follow
through and actually fulfill all of your promises. Undoubtedly, your client has had life
insurance agents give “lip service” to these ideas before, only to be forgotten by them
within a short period of time. Your policyowner will only be fully convinced of your
sincerity by seeing you in action over the years. You are now obligated. You are now on the
spot. But meeting this obligation will be a very rewarding task. You will find that your
work is more fun when you are getting repeat business from satisfied clients. Your renewal
commissions will be larger as a result of a higher persistency rate, and finally, you will find
that prospecting is no longer a serious problem.