How to Sell Life Insurance in a Bank or Credit Union

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Think about that. Let’s say your program today generates $5 million in annual revenue. Can you imagine $1 million of the revenue coming from life insurance? We would probably all be happy if we could get our program to do $100-200 thousand dollars a year! It begs the question, “why was Cal Fed so successful with their life insurance program and why hasn’t anyone duplicated it in the last 24 years?”

 Well, it certainly isn’t for lack of trying. I have personally attempted to repeat the structure several times. But the things that made the Cal Fed program so great are the things that have kept it from being repeated.

It all starts with leadership.

 Cal Fed Investments was fortunate to have a great leader in President Deborah Bernot. She knew what needed to be done to get our life insurance sales up to expectations and she sold the retail bank leadership on the required structure and money that needed to be invested in a successful program.

The first step was making a commitment to getting the right leader for the program. The hiring of Greg Vacca as the insurance sales leader was critical and the foundation for our success. Greg brought many years of life insurance sales to the insurance leadership role and he had a vision; a vision that each of our financial advisor sales regions had to have a dedicated life insurance specialist to achieve a best-in-class level of life insurance revenue.

 Greg realized that financial advisors didn’t want to do the things necessary to sell life insurance. They didn’t want to learn enough about life insurance to be an expert, so they avoided it. They didn’t like the fact that a turned down application could ruin a successful investment relationship. And they didn’t want to introduce something that could make them look uninformed. So, they either ended up selling a cheap term policy or avoiding the topic all together.

Fast forward to today and while advisors have become better at uncovering life insurance opportunities with the focus on financial planning, they still avoid a full-blown insurance needs analysis and potentially selling a more complicated life insurance solution. They want an expert to come in and do the heavy lifting for them and still get paid the full commission.

 This is exactly the program Greg Vacca implemented. Each of the eight regions received their own dedicated Life Insurance Specialist. To sweeten the deal, there was no competition when it came to commissions. The insurance specialist was paid a salary plus an override on the business closed. The financial advisor got paid the full commission on the sale. This comp structure alone fostered a spirit of cooperation and teamwork.

 So, how did it play out? The specialists coached the advisors how to uncover opportunities. Once an opportunity came to fore, the advisor had a choice. He/she could keep the specialist at arm’s length and go the distance alone with the sale or bring in the specialist from the beginning as part of his/her team.

Either way, both were paid the same comp they would have received otherwise. Another motivating factor was that the commission on the insurance products sold often rivaled that of an annuity, so the advisor justified handling the paperwork for the sale. 

 Having the specialists as part of their advisor team also contributed a key value add and that was their ability to generate leads. Cal Fed sold a lot of long-term care insurance. This was the era of MoneyGuard and we sold a ton of it. The specialists were great at hosting long-term care, wealth transfer and estate planning seminars to generate leads for the advisors.

 Yes, the program was expensive with eight life insurance specialists. But, with between 14% and 18% of the broker dealer revenue coming from life insurance sales, the program was profitable. There were some months where life and long-term care revenue exceeded revenue from mutual fund sales. So why hasn't this structure and approach to selling life insurance caught on? Most broker dealers have a team in a central location who will talk to you over the phone or in some cases come out to see you personally if the deal is big enough. But there is nothing like having a dedicated person just for your team whose livelihood depends on the success of your team.

 As with Cal Fed, it takes a leap of faith and a belief that you can and will generate the life insurance revenue to break even in a reasonable amount of time. You can’t base the decision on achieving a margin goal just like you shouldn’t when it comes to hiring financial advisors. The revenue will come with the hiring of the right people. Cal Fed made the right bet.

 Admittedly I was spoiled by being a part of Cal Fed Investments early in my career. The bar was set high and I have been chasing it ever since. Frustrating? Yes, but oh so worth the effort and the results. I am grateful.

A Personal Perspective: Lessons Learned

Over my 40 years of recruiting financial advisors, I have experienced both hiring and recruiting. Typically, I found myself hiring when under pressure, selecting who seemed like the best candidate at the moment. For example, when I joined Citibank in 2002, my previous territory was dismantled, and I had just 90 days to hire 25 financial advisors. With support from an outside recruiting agency, I still ended up hiring many unsuitable candidates. Although a few hires turned out well, relying on luck is not a sustainable strategy. These mistakes taught me valuable lessons, inspiring me to develop a Recruiting Playbook based on both my hiring errors and recruiting successes. Even with a dedicated team searching for candidates, certain critical tasks could not be delegated. This distinction between hiring and recruiting is key.

Start with the End in Mind

 For years, I have used The Ideal Candidate Worksheet, which I’ll explain how to obtain at the end of this article. This tool highlights my Top 3 Must Haves—non-negotiable criteria that every candidate must meet. If an applicant lacks any of these, it’s an automatic rejection. Understanding your program, its culture, and the people your new hire will work with is essential. Consider what skills, traits, and backgrounds you require.

Additionally, there are the “Want-to-Haves.” These are not deal breakers but are desirable attributes such as education, industry experience, earnings history, coachability, and work ethic. These preferences may vary depending on the candidate’s future role and location. You may also have a list of “Other” qualities needed for a specific recruiting assignment.

 Without an Ideal Candidate Worksheet, you risk accepting nearly anyone. Even experienced professionals cannot rely on the “I’ll know him/her when I see him/her” approach. Having made my share of hiring mistakes, I recommend coming to the assignment with a clear vision of your ideal candidate and refusing to compromise. During times when I had to hire under pressure—such as when working with a credit union executive—the Ideal Candidate Worksheet provided the evidence to educate colleagues on why this process differed from hiring a teller.

The Top 5 Recruiting Mistakes and How to Avoid Them

1.    Going against your “gut” feeling

 It is common to ignore or second-guess intuition. Your “gut” is your subconscious experience evaluating the candidate. Sometimes it signals a need for rejection; other times, it suggests gathering more information before making a decision. Trust your instincts.

 2.    Hiring under pressure

 The phrase, “If you don’t know where you are going you will end up anywhere,” applies to hiring financial advisors. If you lack a clear vision of the candidate you want, you will end up hiring just anyone. It’s crucial to define your “Ideal FA” for every opening and communicate this with your partners to manage expectations. Referring to these specifications helps resist pressure to fill positions quickly and ensures you do not settle for an inferior candidate.

 3.    Not verifying “Trailing 12”

Financial advisor candidates are salespeople, and some may exaggerate their production history to appear more attractive. Avoid assumptions and always verify their performance claims. If a candidate cannot provide proof of production, it is a red flag. Be mindful of state labor laws—you may not require proof, but you can request it.

 4.    Not having an ideal candidate profile

This mistake relates to hiring under pressure. Without an ideal profile, you are likely to settle for less. As the recruiting process drags on, better candidates become harder to find if you lack a clear profile. The consequences of a bad hire include wasted time, money, and damage to your reputation.

 5.    Poor interviewing techniques

Even mediocre candidates can present themselves favorably. If you don’t “peel the onion,” you won’t uncover the qualities you need in an ideal candidate. Candidates often say what they think you want to hear. Asking for examples and deeper explanations exposes the true qualities behind the surface. Always “peel the onion.”

Conclusion: Consistency and Credibility

Reflecting on your recruiting efforts, consider how many of these mistakes you have made. Most can be avoided by starting with the end in mind. Clearly define your ideal candidate, write it down, stay consistent, and never compromise. Ultimately, your credibility depends on it.