Pros and Cons of Buying Life Insurance Leads

Fran Majidi July 7, 2022
buying life insurance leads

There are pros and cons to buying life insurance leads. Obviously, paying for any cost that is not a guaranteed return on investment is stressful for any insurance agent, but if this cost is bringing in a commission you might not otherwise have, it goes from being a cost to being an investment in your income. Ideally, you want to write more than just final expense insurance.

The few agents who are succeeding without buying life insurance leads have a leads generating website (or websites) making their phones ring all day. More often than not, the bigger insurance agencies are the only ones surviving without buying any leads at all, but even they end up buying leads to diversify their sources.

The following are some pros and cons to buying life insurance from leads generation companies like SmartFinancial. Remember that we’re always here to help you grow your business, and our life insurance leads are the best in the industry: 877.328.7750.

Pros of Buying Life Insurance Leads

Generating life insurance leads is tough. Buying them from a third party like SmartFinancial makes sense because unlike an employer who feeds you leads, they do not take a commission in the transaction. It’s a fixed fee for just leads, whether you close the deal or not. People who complain about the prices for these leads never had an employer take a cut of his commission on a life sale, which is not an easy close by any stretch of the imagination.

Buying life insurance leads from an ad-tech company like SmartFinancial is also helpful because we use technology to target specific ages and incomes of clients. As for prospects who give inaccurate information, a good third-party leads company will have a generous credit policy in place to replace those leads with more accurate ones.

When you need income and don’t have the money to build a lead generation website of your own, you will have the opportunity to close some deals by buying leads. Now, life insurance leads take time so don’t expect all leads to be a) guaranteed and b) fast and easy to close. Buying exclusive life insurance leads is a pro because other agents are not contacting the prospect, unless (s)he contacted more than one leads generation company to compare quotes. Even still, they’d be getting only a few calls versus several a day. This always helps close, despite the competition, and prospects won’t be overwhelmed with calls.

Shared leads are cheaper than exclusive leads and may fit your budget more easily. With these kinds of leads, however, you need to act fast and engage the prospect right away before the other agents start calling. Even if you act as fast as humanly possible, you may not be the first person to reach out to this prospect so really work on a winning introduction. Bring some energy and urgency to the game, and your chances of engaging that client are much higher. High-risk leads are high-risk leads. While insurance companies limit the number of life insurance policies they write on high-risk clients, they don’t do it with a slam of the door. They do it with high premiums, which some prospects will be willing to pay. These types of leads take a long time to close because premiums run so high, but when they do you have a bigger commission on these, not to mention far less competition over these clients. If you buy high-risk leads in bulk, you may be paying as little as $10-$12 a lead. Close one of these out of a bunch and you’ve got a strong ROI.

Helpful Tips on Life Insurance Leads:

Aside from buying life insurance leads from SmartFinancial, you can try direct mail, which is the most subtle way to sell life insurance. Sure, there are agents who literally go around knocking on doors like they did in the past, but these agents are far and few between. These kinds of policies have lower close ratios than auto insurance, which is why life insurance agents often turn to financial advising or they sell other lines of insurance.

Cons of Buying Life Insurance Leads

Life insurance leads are notoriously tricky because people give false information before feeling out a live agent who eventually gets the truth out of them. Life leads tend to give agents the most trouble (compared with, say, auto insurance). This is through no fault of the leads generation company. This is because most people find out how expensive life insurance becomes the older you are and they panic. Sometimes (too often, rather), they think they can somehow get insured without showing proof of age. Once they do find there’s no way around it, they often decline coverage because it’s simply unaffordable. So, if you’re a life insurance agent our advice to you is that you move forward with your expectations in the right place. It’s not so much that the leads are bad; it’s simply humans learning how life insurance works a little too late and acting desperately. You may need to weed out a large percentage of bogus leads to get the good ones, but it’s still easier, less time consuming and less expensive than going door-to-door and paying a marketing agency to generate organic traffic for your website.

If you are considering buying shared life insurance leads, other agents will be competing with you for the sale on each lead. Not only will you need to price more competitively, you’ll be one of many, many calls to a prospect, who may be annoyed or refuses to answer the phone knowing it’s yet another agent. Even when you buy the best exclusive leads from a company like SmartFinancial, there’s no guarantee that the prospect didn’t fill out a form elsewhere. They may be exclusive in that the lead generation company didn’t share it with other agents, but the prospect may be on other unknown shared lists after filling out multiple forms in the initial phase of their search.

Life insurance leads can be expensive but they’ve become a necessary evil in today’s market, especially for agents who do not market themselves properly online to Millennial shoppers. If you’re not generating insurance leads on your own, this may be the only way to go.

Where Are the Insurance Shoppers?

Most people are shopping life insurance online. If you’re dead-set against buying the best organic leads from lead generation companies like SmartFinancial, then you’ve got to invest in having a robust Internet presence. No, that doesn’t mean putting up a website and calling it a day. It’s hard work generating traffic to your pages. It’ll require an investment in either an agency or your own time (unless you hire someone to blog, manage social media and create ads for you). Whether you buy life insurance leads or you generate leads yourself, you'll have to spend some money!

Buy life insurance leads from SmartFinancial, a lead generation company that does not overpromise and has account managers dedicated to helping you make the most of exclusive leads, shared leads and live transfer calls.