Classic Questions And Classy Comebacks From Tom Hegna

You might think you are in sales, but Tom Hegna wants you to know that you are actually in the words business.

Hegna, a well-known speaker on retirement issues and author of books such as Paychecks And Playchecks, plans to focus on words in his presentation, “Handling Objections And Asking Powerful Questions,” on Wednesday at NAIFA’s 2020 Purpose + Performance virtual conference.

“This is really a word business, a language business, a questions business and a stories business,” Hegna said. “It's really not a knowledge business anymore because you give me an iPad, the internet, and 15 minutes, I can figure out anything I need to figure out.”

Why are questions important?

“They show you respect their opinions. And they'll respect your opinions,” he said. “It crystallizes their thinking and gets to the key issues faster.”

Questions also help set a baseline of understanding. For example, if an agent is going to speak to a prospect or client about annuities, it would behoove that agent to know that person’s opinion about them. The answer will help shape the presentation.

The same goes for life insurance. Does the person know the difference between term and cash value life insurance? Does the person think insurance fits into their overall plan?

Scouting Out The Objections

The answers help the agent prepare for objections.

“You have to prep them,” Hegna said. “You have to talk about tax-free income and retirement. You have to talk about other things, such as bond alternative. You can't just go right in your presentation. If they hate what you're going to talk about, there's some prep work you've got to do.”

Once agents become familiar with the objections and answers, they can answer the objection in the presentation, rather than have them linger in the mind of the client.

These are some classic Hegna objections and responses.

Annuities Have High Fees

Questions help tease out the objections before they become roadblocks. For example, a common objection is that annuities carry high fees, Hegna said.

“If that's the case, you don't start presenting your annuity yet,” Hegna said. “You have to go, "Why do you think that? May I ask why?’ You dig a little deeper and find out more of what they know. ‘Well, I see this Ken Fisher, as he says, annuities are terrible.’”

That is the cue to ask what kind of annuities Fisher was talking about, leading to a discussion about the different annuities on the market.

"Well, most annuities don't even have fees,” Hegna said. “Single premium, immediate annuity, not a fee product. Deferred income annuity, not a fee product. Fixed annuity, not a fee product. Fixed investment, not a fee product. It's really only variable annuities and some riders that have fees. And so that would come before you make your presentation on how great your annuity is.”

Annuities Are Only Good For Guaranteed Income

“I have 11 annuities. And yes I want income in retirement, but you know what I don’t want to do? I don’t want to lose my money!” Hegna said. “The broker can’t do that. The broker can’t guarantee I won’t lose my money.”

Long Surrender Period And Stiff Penalties

“There are annuities that don’t have surrender penalties, but those annuities pay very, very low guaranteed rates, just like a money market fund. To get a better guaranteed rate, you have to go into a product with a surrender charge.”

Annuities Will Cost More For Heirs

The objection is that annuities don’t allow for a step-up in basis and heirs pay income tax on earnings. But even though other products or investments allow a step-up, rarely are those investments kept over a long period. Usually they are sold and replaced, erasing any unrealized gain that the step-up in basis would cover.

“If you buy Walmart and hold it until you die, then yes, you get a step-up in basis. But most people aren’t buying Walmart and holding it until they die,” Hegna said. “And the purpose of annuities is to help you while you are alive. The purpose of life insurance is to go to your kids.”

The Mortality Expense Fee Can Be As High As 2% Annually

“That is a variable annuity,” Hegna said, adding that fixed annuities don't carry that fee. “Remember, the reason why you want a variable annuity is to make as much as you can make, but you don’t want to lose what you already have got. A mutual fund is going to have lower fees. An ETF is going to have lower fees. But you are retaining market risk. The second thing you can do is get a CD or money market fund. You’re not going to have market risk but you’re going to get paid 1% or less. The third thing you can do is transfer the downside market risk to the insurance company for a fee.”

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected] 

 

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