Placing AOTA’s is a skill every life insurance agent needs to master.
AOTA = Approved Other Than Applied For.
In other words, your client’s premiums are more expensive than you quoted them. This is a tough situation to overcome and going into that phone call unprepared can leave you with a big fat $0 in commissions.
The more AOTA’s you can place, the more money you’ll make.
Here are 4 tips to help you place more business when the outcome wasn’t as expected.
Tip #1: Look at alternative companies before calling your client.
Always look at the reason they were approved other than applied for. Take that information and shop it to other life insurance companies before you call them. Often times you’ll be able to get them a better from another life insurance company who has more lenient underwriting guidelines for that specific risk.
Being able to tell your client you searched all the top rated carriers after getting the less than favorable results, builds a very good rapport. You went the extra mile without being asked and now they know all their options.
If you find a company that will offer a lower rate and your client wants to pursue it, then you just need signatures on the new application. With EZlife, we order the APS in house which means if you wanted to apply to the new company, all your client has to do is e-sign a new application and we submit it with the APS and medical exam. You’ll typically get the new offer within 2 weeks. Super easy for your client.
Tip #2: Write down alternative death benefit and term length premiums.
When you make the call to present the offer, always have alternatives within the budget they applied for. Adjust their death benefit and/or term length to bring it within their budget. Have these options written down and provide them with those options.
Also, have your quoter ready with their information pre-filled with the new health class. It’s likely that you’ll be running rates on the fly if they want to adjust the term length and/or premium.
Tip #3: Remind them the reason why they’re buying the insurance.
Always remind them of the reason they’re purchasing this insurance. Don’t let the disappointment of a higher premium kill the sale. If you provide the alternatives and they still tell you it’s just too expensive, you need to call them out. Empathize with them, but remind them of why they are buying coverage in the first place. For example:
“I know this offer isn’t what we expected, but you can work on your <cholesterol> and re-apply for better rates when you’re within normal levels. We both know the most important thing is to protect your family…so my recommendation is to take a lower term length while you work on your health issues. Hopefully you won’t have to pay this rate too long.”
Tip #4: Take a Positive Approach
The biggest mistake agents make is having a disappointed or defeated attitude when presenting the rates. You want to empathize with your client, but at the same time let them know this is the best they can qualify for at this point in time.
In the beginning of the call, let them know you got them approved for life insurance, but need to discuss some details with them. Don’t tell them the offer at the beginning of the call. Instead, give them the health information that “rated” the policy higher than expected and ask them for more information about the reason they were rated. You want to make this conversational before you drop the bomb on them. For example: “The labs came back with elevated a1c levels, have you ever been treated for diabetes?”
This way you’re conversing with them and breaking the ice before telling them the damage. Then tell them “the good news is the life insurance company approved your application with this NEW information, but at a higher rate. Based on the new information, this is actually a very FAIR offer.” THEN you give them the health class and new premium.
It’s all about taking a positive approach and making sure you get them talking before laying it on them.
Bottom Line. Be prepared, be positive and manage their reaction. Your client will be disappointed, but as a professional it’s your job to get them passed the shock of a higher price and focused on the reasons they’re purchasing the life insurance. If you’re able to do this, you’ll place a lot more cases and more importantly, protect more families.
The AOTA is by far the most difficult part of this process for both client, and agent. When done correctly, you are in effect upselling every AOTA case by way or premium and commissions. This is the make or break of an agent’s career in my opinion. AOTA’s are inevitable—plan accordingly.
I would like to share my 3 step approach—which is for LARGER AOTA’s (not preferred to standard plus cases):
1. Reach out to the client as soon as you receive the approval notice. The call goes like this; “Mr. Client, the insurance company has approved your application but I am not 100% satisfied with it. It looks like they are concerned with “impairment X.” I haven’t run the premium differences yet but due to the health rating they gave, I am in the process of shopping your case as we speak. I sent your file out to 8 other carriers and am awaiting responses. This should take a few days.” Do NOT give a premium.
2. Then 1-2 days later; “Mr. Client, I have offers back from 3 of the 8 carriers, and they are no better than Company A. I have my fingers crossed for a better offer from one of these other carriers and will get back with you as soon as I have word.” Again, do NOT give a premium.
3. Call on the 3rd or 4th day: “Mr. Client, I have exhausted all efforts and most of the carriers were in line with Company A, while a couple of them were higher priced. At this point, I am satisfied with the health rating having done the legwork and just need your input on which policy amount or term to place. You can work on “impairment X” this next 12 months and we can try reapplying next year for better pricing if available. Let’s go over some options.”
Do the things that you say you are doing, and do right by your client. If a better carrier presents itself, move on it. I have found this approach to sit well with clients, and really eases the shock and disappointment of a rate increase. The client will truly view you as their advocate—which you should be if you are an independent agent.
Part of not having to deal with AOTA’s is a good front end health prescreening—perhaps a blog post on that Mr. Root?!