We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the October 2020 edition. We're sharing the full introduction, and 2 of the 7 monthly sales ideas. If you like what you read, we encourage you to click here and become a subscriber.
Reprinted with the author's permission.
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October 2020 – 7 Ideas and Views Newsletter by Van Mueller
THE SOCRATIC METHOD
The Greek philosopher Socrates was famous for not answering questions in a direct manner. “I know that I know nothing,” he would say. Instead, he said that the other person already knew the answer to the questions. Socrates only drew out what was already in the other person’s mind.
There are many ways to define the Socratic Method:
- A form of cooperative argumentative dialogue between individuals based on asking and answering questions to stimulate critical thinking and to draw out ideas and underlying presuppositions.
- A style of teaching in which the teacher (YOU) imparts no information but asks a sequence of questions, which help the pupil eventually come to the desired knowledge through answering.
- A method of inquiry and instruction consisting of a series of questions with the object of eliciting a clear and consistent expression of something implicitly known by all rational beings.
Using the Socratic method of asking questions, we can inspire our customers to go through a process of discovering their needs, wants, and dreams. Asking questions is a way to help our customers organize their thinking about what actions would be appropriate for them to have their own personal vision of financial and retirement success.
We can inspire our customers to go through a process of discovering their needs, wants, and dreams.
Many of you ask how I get so many appointments and how is it possible to make sales so quickly in my appointments. It is because I ask so many questions. I have worked on (and continue to work on) asking questions that prospects and customers want the answers to, and that helps them figure out the answers for themselves. I am no Socrates, but I truly believe that I don’t know anything and that the only opinion that matters is the opinion of my customer.
Many people in our industry are still trying to impress people by telling people things, even though we already know that isn’t engaging and doesn’t inspire people to take action. Let’s be honest, it is hard enough for most insurance agent and financial professionals to be engaging in person. That means they will be even less engaging on the telephone or various forms of social media. Don’t you think you would be more engaging in person (as well as on the phone and on social media) if you were asking interesting questions? It is transformative. You can literally change your career for the better in a short amount of time with a great list of questions and enough practice to make asking those questions conversational.
Here are the six types of questions Socrates posed:
1. Clarifying Concepts
2. Probing Assumptions
3. Probing Rationale, Reason and Evidence
4. Questioning Viewpoints and Perspectives
5. Probing Implications and Consequences
6. Questioning the Questions
All of these types of questions are pertinent to the skills we teach in this newsletter and will help us all become better at our primary responsibility: to inspire prospects and customers to take action. If you are just out there selling products, you are already at a disadvantage.
I would recommend that everyone reading this newsletter should write down ten or twenty of your favorite questions. The questions could be questions you have a real interest in, or they could be questions you get the most favorable responses to. Once you have them written down, ask your prospects and customers if you can read them to them. Explain that the questions are so important that you don’t want to forget to ask the one that might end up being the most important to your prospect or customer and their family or their business. Ask them if it would be okay to write down their answers to these questions, so you can be reminded of them every time we talk. Show that your only concern is making sure that your customer is being served.
I would recommend that everyone reading this newsletter should write down ten or twenty of your favorite questions.
The better you get at asking questions the more engaging you become. The more questions you ask, the more engaged people around you become. I know it sounds simple. And honestly, it is! Learning to use the Socratic Method in your sales career will make it fun and very profitable. I would get started as soon as you finish reading this newsletter. Here is one way to start:
WHAT ARE THE MAIN CRISES AMERCANS WILL FACE THIS DECADE?
Our world, our country and our industry changed forever six months ago. We must prepare our customers for a whole new set of circumstances. We must use our creativity to uncover and solve the new challenges that our customers will face. These four crises will have serious economic consequences. If these crises are not considered and planned for, then families, businesses, retirements even everyday life will have serious repercussions for the American people.
Remember: there truly is no bad news, and there truly is no good news. There is only news. When our customers plan and strategize, they can turn every challenge into an opportunity. But Americans who don’t plan will be seriously harmed financially by these crises.
1. COVID-19 Crisis
This pandemic will have medical and economic impact for years to come. Whether we have a vaccine or not, we will be dealing with the fallout from this for a long time. So much has changed. Do you think businesses, restaurants, bars, movie theaters, schools, churches, etc. will all have different business models? Could these changes affect our prospects and customers, and result in entirely different challenges and responsibilities? That is our opportunity to serve.
Do you think businesses, restaurants, bars, movie theaters, schools, churches, etc. will all have different business models?
2. Economic Crisis
Many Americans believe that COVID-19 caused the economic crisis, but the economic crisis was already in play. The only difference is that what normally would have taken three to five years to happen has been compressed into less than twelve months. Our government has reduced interest rates to almost zero (which, by the way, after inflation are actually negative interest rates). We have printed trillions and trillions of dollars. Most businesses have much more debt than they can reasonably handle, and they are only able to get away with it because of the nonexistent interest rates. With the COVID-19 crisis putting increasing pressure on the economy, the danger is increased exponentially. We must find out from our customers how much risk they are willing to accept, and when do they believe they should abandon that risk for more certainty.
You could ask every prospect and customer hundreds of questions about these first two crises.
3. Social Crisis
The social crisis will change how we run our cities. It will change our policing. It will change our government. Most importantly, it will change our industry. There will be huge economic costs associated with this crisis. These costs include police protection for protestors and costs associated with protests that turn violent and cause property damage and physical damage to people. There will be additional pressure on our court systems. This all costs money that we do not have. These occurrences will probably take money away from other things that must be paid for. I am not dictating whether we should do or not do these things. I am asking where will the money come from? Who will pay? What benefits or services will be sacrificed?
I am not dictating whether we should do or not do these things. I am asking where will the money come from? Who will pay? What benefits or services will be sacrificed?
4. Climate Crisis
This is the biggest crisis of all. The climate crisis dwarfs the other crises. We haven’t even begun to pay for the costs that will be required to adapt to climate change. This is not political; it no longer matters whether it is manmade or a natural occurring phenomenon. Add up the costs:
- Thirteen western states with hundreds of fires that are not under control. Millions of acres in California destroyed by fire with no end in sight. Thousands of homes destroyed.
- Houston, the fourth largest city in the U.S., floods every time it rains, because the city is at sea level. Rising sea levels are causing lower New York city and Miami Beach to flood every time they have a serious rainfall.
- The gulf coast and Atlantic coast are subject to ever-increasing and more powerful hurricanes than ever before, which cause huge amounts of damage.
- This is before we talk about the effects of air pollution and water pollution.
- All of these things endanger the food supply.
I am not being an alarmist. These things are occurring, and we will find solutions for them. This is not the end of the world. They will, however, cost money. Where will all these entities get the needed money? Won’t they try to get that money from our customers?
We must ask about these crises so we can inspire our prospects and customers to understand that without planning, governments and people who didn’t plan will come and take our money. Wouldn’t that be an amazing discussion? Wouldn’t that inspire prospects and customers to search for solutions and strategies? Don’t we have ways to help with that? Wouldn’t that be an easier, and much less adversarial conversation? Please ask powerful questions about these crises!
Here is the last question before we start the sales ideas: IF YOUR CASH VALUE LIFE INSURANCE MADE ZERO GAINS FOR TEN TO FIFTEEN YEARS WOULD YOU STILL BE ABLE TO SELL IT?
If your cash value life insurance made zero gains for ten to fifteen years, would you still be able to sell it?
Why do I ask that? Because the Federal Reserve has told us that they will keep interest rates near zero even if we begin to have higher inflation. I am including articles in the sales ides that verify that. Most people and analysts believe that stock market will have low returns or even no returns for the next ten years. A repeat of 2000 to 2010. Many analysts believe the S&P 500 will have its worst decade ever.
If this is true, will we be able to use cash value life insurance and annuities to help our customers achieve financial and retirement success? You BET we can!
Our industry sells the only three things that Americans will require to achieve that financial and retirement success even under the circumstances I described:
- Guaranteed Income That Cannot Be Outlived. Ask your customers this question. “What if there was a way that even if you ran out of money you would never run out of income? Would you want to know about something like that considering the economic circumstances Americans currently find themselves in? Do you want to be rich or do you want to guarantee you will never be poor?” Getting rich requires risk. A more certain income stream that is guaranteed to never run out reduces the risk dramatically.
- Mortality Credits. We are the only industry who can use mortality credits to benefit our customers in a zero-interest rate environment. Let me explain: Annuity guarantees are based off of mortality tables, which estimate the life expectancy of people at every age. The mortality tables changed this year. This will affect annuity rates, consumers and insurance companies. Since some people die sooner than the mortality tables predict and some die later, insurance companies are able to hedge their risk with mortality credits. Mortality credits are created when people die sooner than expected and don’t receive as many income payments as they would have if they had lived to their full life expectancy. That money goes into a pool that will then pay lifetime income to those people who live longer than their life expectancy. That is how a straight life annuity can still pay $5,000-$6,000 per year of income on a $100,000 investment in a zero-interest rate environment.
- Leverage. Cash value life insurance is pennies that buy dollars, or one dollar doing the work of many dollars. Internally, cash value life insurance has little or no volatility. The values of the cash value life insurance can be used to take advantage of higher volatility outside of the policy with dramatically reduced risk because you don’t have to lose money first. This is the greatest time ever to sell cash value life insurance and annuities!
Here are two examples before we start the sales ideas.
1. Customer has $30,000 in savings essentially making nothing. Use it to buy a single premium life policy for $50,000 to $70,000 based on age and sex and health. The policy will have approximately the same returns as the savings account. If you don’t want to sell a MEC, pay $3,000 per year for ten years. Pay the first year and buy a 9-year period certain annuity that pays $3,000 per year. Now, you have a fully funded life policy with access to the cash value income tax free.
2. Customer has $200,000 in a CD currently making 0.20% ($400 per year). Take $100,000 and buy a straight life annuity, which will pay a 65-year-old around $6,000 per year guaranteed for life. If they die after one payment, the insurance company keeps the money. So, I take the other $100,000 and buy a $200,000 face amount policy. If the customer only gets one payment of $6,000 from the annuity, the life insurance still pays $200,000 to the family, income tax free. If the customer lives for 30 years, they get back $180,000 for the $100,000 they put in the annuity, in a zero-interest rate environment. The life insurance policy grows untouched for 30 years. Let’s say the face amount grows to $300,000. The customer gave you $200,000 you gave them back $480,000 essentially income tax free, again in a zero-interest rate environment. Even if that was all there was, then the customer should get started right now. But that’s not all there is. My program doesn’t have to go through probate if I name beneficiaries. My program is not only incontestable, it is private. My program can be controlled from the grave. My program has creditor and predator protection and my program has Medicaid versatility. I can convert the lump sum cash value into an income stream, so it doesn’t have to be spent down to qualify for Medicare. I ask every customer whether they know anything else in the world that can do what I just described. They don’t. It is our time.
I ask every customer whether they know anything else in the world that can do what I just described. They don’t. It is our time.
Learn the Socrates Method of selling and become everything you desired when you came into the business. Now, let’s get started this this month’s sales ideas.
Idea #2: What Is a Fixed Index Annuity and How Does it Work?
I jokingly make bets with agents all the time about fixed index annuities. There are very few agents in America who truly understand all the moving parts of a fixed index annuity, and that includes me. That is why I am including these two wonderful articles provided by Forbes magazine that explain what a fixed index annuity is and how it works. In one of these articles, Wade Pfau really helps us to understand how the interest is credited. If used correctly, these vehicles should be able to take advantage of the volatility in the markets to help build a better safe money return without increased risk. I believe you will find these two articles very beneficial.
Title: What Is An Index Annuity?
https://www.forbes.com/ (Forbes, September 21, 2020)
https://www.forbes.com/advisor/investing/what-is-index-annuity/#:~:text=editor-,Advisor,500%20or%20the%20Nasdaq%20100
Title: Fixed Index Annuities – Interest Crediting Explained
https://www.forbes.com/ (Forbes, September 17, 2020)
https://www.forbes.com/sites/wadepfau/2020/09/17/fixed-index-annuities-interest-crediting-explained/#61442bb7765f
Idea #3: Who Pays the Income Taxes?
Out of 152.9 million tax returns, 83.7 million showed adjusted gross incomes of less than $50,000. They paid 5.1 percent of all taxes.
If you change the adjusted gross income to $100,000, the number of returns increases to 123 million. That is 80 percent of all the returns. Those 123 million returns paid only 18.9 percent of all the taxes. Income earners between $100,000 and $500,000 paid 42.9 percent of all the taxes. That is 17 percent of all the taxpayers.
Americans with incomes over $500,000 paid the other 38.2 percent of the taxes. That is 3.7 million people. That means that 29.9 million Americans pay 81.1 percent of all the taxes. Fewer and fewer Americans are paying more and more of the taxes. And here’s the punchline: The Government Needs More Money. They have no choice but to come after those 29.9 million Americans. Show them that they need to do some serious tax planning now.
Title: In the U.S., a Small Minority Still Pay a Large Majority of Income Taxes
https://www.forbes.com/ (Forbes, August 31, 2020)
https://www.forbes.com/sites/zengernews/2020/08/31/in-the-us-a-small-minority-still-pay-a-large-majority-of-income-taxes/#2f887a984bde
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