It Was “Too Expensive” Until They Lost $100 Million!

On my fourteenth follow-up, the insurance broker said, "It’s too expensive, the client has decided that the premium on the Failure to Survive quote was too expensive and that they were going to get as much Term Life as possible".

He was right. My $100 Million Failure to Survive quote was not competitively priced compared to the smaller Term Life quotes, and financially for the business it made sense to proceed with the Term Life.

I wasn’t deterred. This was the biggest quote of my career and I was going to pull out all the stops.

By proceeding with the Term Life solution the insurance broker had a massive undertaking. Most U.S. life insurance companies utilize the same handful of reinsurers to limit risk on large cases. Often times, the reinsurers run out of capacity forcing each company to limit their coverage to small limits, ranging from $250,000 to $5 million.

I knew it was going to take multiple applications, multiple exams, and various financial documentation all of which would have taken months to complete. Also we had a very motivated buyer, as this coverage was required by a bank as collateral against a massive corporate finance agreement.

With time on my side, I worked hard with Lloyd’s to get a more aggressive quote. Two weeks of work later, I succeeded in getting a much better rate and scheduled a call with the insurance broker. He stopped me in the middle of my pitch and I can still hear his words today: "There was an accident this morning. The helicopter carrying Mr. "client" went down and everyone onboard was killed."

The insurance broker also said that they only had around $10 Million in force. To make matters worse, the news of the accident caused the company’s stock price to drop more than 15%. It took years for the company to financially recover from the loss of the CEO.

I was devastated and I felt like a failure. Investing months of work and hours of negotiations with underwriters, I felt personally connected to the client. Although I never met Mr. "client", I still mourned his loss. Over the coming weeks I replayed the events in my head to see what I could have done better to get the coverage in place, but none of them seemed feasible.

I regularly refer back to this case to share my experience with new clients and to stress the importance of insurance. It doesn’t matter if it’s $100,000 or $100 Million, without proper insurance the ones we leave behind will struggle without the proper financial plan. As insurance professionals, our job is to make sure that our clients have the best financial protection possible.