1. Principles of Agency Building 9th Edition May 12,2009
By: Roberto H. Bruce, MS, CLU, ChFC, LUTCF Cavaliers Insurance Marketing
Rights Reserved

2. Agency Building Opportunity
Rights Reserved
Strong Company
Unique Products
Ground floor
Agency compensation

3. The Ultimate of Selling is Agency Building
Rights Reserved
Train
Recruit
The Ultimate of Selling is Agency Building
Sell

4. Term – Insurance For A Specified Period$
Rights Reserved
CCOI $ T
T age T1 T2
1 Flexible Premium 2 Adjustable Death Benefit 3 Current Interest Rate 4 Guaranteed Interest Rate UL

5. Premiums $ M.E.C Net Level 7 Pay Test Tamra 88 Guide Defra 85 Target
Rights Reserved
YR 1— $5,000— $4,000 $
2—10,000 — 5,000-9,000 3—15,000 — 7,000-16,000 4—20,000 — 5—25,000 — 6—30,000 — 7—35,000 —
Net Level
7 Pay Test
Tamra 88
eg. $5,000
M.E.C
Annuity
Single
eg. $25,000
Guide
Defra 85
Level
eg. $2,000
Target
Minimum
Premiums

6. TRA’ 86 INSURANCE ANNUITY 59 ½ - 10% Penalty FIFO LIFO PREM
Rights Reserved
PREM
Interest Income
PREM
PREM
PREM
Interest Income
FIFO
LIFO
INSURANCE
ANNUITY
59 ½ - 10% Penalty

7. Life Insurance Tests
Guide Premium
Corridor – Age 95
Rights Reserved

8. OPT B Increasing Face Amt or Face Amt + Savings
Options
Rights Reserved $
100,000
Amount At Risk
OPT A Level Face Amount
Savings T t1 95 $
100,000
OPT B Increasing Face Amt or Face Amt + Savings
Amount At Risk
Savings T t1

9. Policy Costs CCOI + Policy Fee + PREM Charge + Charge / $1,000 TCOI =
Rights Reserved
CCOI + Policy Fee + PREM Charge + Charge / $1,000
TCOI =
PREM – TCOI = Policy Fund
Cash Accumulation Value
Policy Fund – SURR Charge = Cash Surrender Value
Cash Value

10. Hierarchy of Life Plans
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Whole Life
Universal Life
Term

11. Parties To A Contract Owner Insured Beneficiary Three - Gift Tax
Rights Reserved
Parties To A Contract
Owner
Insured
Beneficiary
Three - Gift Tax
One - Estate Tax
Two – Recommended
Disclaimer, if not taken

12. Waiver Of Premium In case of disability Always recommend
Rights Reserved
In case of disability
Always recommend
Disclaimer, if not taken

13. Beneficiary(ies) Primary Contingent / Secondary Per Capita Per Stirpes
Rights Reserved
Primary
Contingent / Secondary
Per Capita
Per Stirpes

14. Product Spectrum Big Cases  LBL/ANICO
Rights Reserved
Life DI CI
LTC GT
10T
15T
20T
25T
30T GL UL WL
Assurity
Assurity
Assurity
AssuritySagicor
Par ANICO Assurity
ANICO Assurity Sagicor LBL
Assurity LBL
AF ANICO Assurity Sagicor LBL AF
AF ANICO Sagicor LBL
ANICO Assurity
ANICO LBL Assurity Sagicor
Non-Par
Simplified Issue
Big Cases  LBL/ANICO
Small Cases  ANICO/AF/Assurity/Sagicor
Preferred/Big Cases  LBL/ANICO
Standard & Below  ANICO/AF/Assurity/Sagicor
Assurity
Sagicor

15. Annuity 1 or more premiums (accumulation)
Rights Reserved
1 or more premiums (accumulation)
1 or more payments (distribution)
Tax-Deferred 59 ½ % Penalty
Ordinary income
Capital gains
1 – Single premium Immediate – SPIA Deferred - SPDA
1 or more - Flexible premium FPA/FPDA
FIX – General Account
VARIABLE – Separate Account
QUALIFIED
NON - QUALIFIED
IRA (Front)-70 1/2 DEDUCTIBLE NON-DEDUCTIBLE
ROTH-IRA (Back)
DIRECT TRANSFER / ROLLOVER / CONVERSION
1035 Exchange
TRADITIONAL IRA / ROTH-IRA / SEP-IRA / SIMPLE IRA
INDEX / TREASURY LINKED / MYG/MVA

16. Annuity Ideal Cases LBL (FPA $100Q/mo; $10,000NQ)
Rights Reserved
LBL (FPA $100Q/mo; $10,000NQ)
Sagicor/Assurity (SPDA $2,000)
ANICO (SPDA $4,000Q; $5,000NQ)
LBL (SPDA $10,000)
LBL (FPA $3,000Q; $10,000NQ)

17. Plan Distributions – When to?
Rights Reserved
Die, Disabled, or severance from employment
Plan terminates, no successor plan
59 ½
Financial hardship*
*Cannot rollover to IRA

18. Early Distribution Penalty (Plan, IRA, Annuity)
Rights Reserved
10% additional tax on distributions under age 59 ½
In addition to any regular income tax on the amount

19. Penalty Free Plan Early Distributions
Rights Reserved
Death or Disability
Distributions over life expectancy on termination of employment
Service separation after age 55
Qualified domestic relations order
Medical expenses over 7 ½ % of AGI
Distribution election by March 1, 1986
Dividends on employer securities
IRS levy of plan
Qualified reservist distributions

20. IRA Rollover Distribution from one qualified plan
Rights Reserved
Distribution from one qualified plan
Contribution to IRA within 60 days

21. Types of IRA Rollover
Rights Reserved
Direct - qualified plan to IRA, no 20% tax withholding
Indirect - qualified plan to individual to IRA, with 20% tax withholding

22. IRA Rollover Exceptions
Rights Reserved
Series of substantial equal payments based on life expectancy, or 10 or more years period certain
Required minimum distribution (RMD)
Corrective distribution
Loan treated as distribution
Hardship distribution
Dividends on employer securities
Cost of life insurance coverage
Distribution to beneficiaries

23. Penalty Free IRA Early Distributions
Rights Reserved
Unreimbursed medical expenses over 7 ½ % of AGI
Not more than cost of medical insurance
Disabled
Beneficiary of deceased IRA owner
Distribution in form of annuity
Not more than qualified higher education expenses
Used to build, rebuild first home $10,000 or less
IRS levy of qualified plan
Qualified reservist distributions

24. Required Minimum Distributions (RMDs)
Rights Reserved
Minimum amount to withdraw annually starting with year at age 70 ½ , or if later, year retires (except 5% business owners)
Amount not withdrawn taxed at 50%

25. Issued over submitted apps
Rights Reserved
Placement Ratio
Issued over submitted apps
Pre-qualify prospect
Concept selling
Trial app / no initial premium for borderline cases
Initial payment w/ app
More apps, e.g., Juvenile plans
Case follow-up

26. Persistency Ratio Active over issued policies Modal payment hierarchy
Rights Reserved
Persistency Ratio
Active over issued policies
Modal payment hierarchy
Annual, 7 Pay, or Single
Monthly bank draft
Semi-annual
Quarterly
Monthly direct billing
Client contact/review
Improve placement ratio

27. NO Goal Setting $$$$ Sale/Network Appointment 1. Calls ——————— 3 min
Rights Reserved
$$$$
Sale/Network
Appointment
1. Calls ——————— 3 min NO
Name Company Purpose Appt.
$ Time Need T1 T2

28. Goal Setting
$250,000 – ESD/SGA $100,000 – MDRT $50,000 – Convention
$_______ A.P. Goal ÷$_______ A.P./Sale Sales/Year x_______ Appt/Sale Appts/Year ÷52 Wks
100,000
Rights Reserved
1,000 3
___ min/call
___ calls/appt
___ hrs/appt
___ appt/sale 20
100 2 2 2
200
1,000
$_____ Annual Prem (A.P.)/Sale 4
Appts/Wk
x_______ Calls/Appt 20 80
Calls/Wk x 2
Hrs/Appt
x 3(min/call)/60(min/hr) 8
Appt Hrs/Wk 4
Call Hrs/Wk + 12
Hrs/Wk Total

29. Aalliance Management Expectation/Commitment (Calendar Year) ESD ASM DM
Rights Reserved
Rights Reserved
ESD
ASM DM UM
How?
1) Recruit One (1) Agent Per Month Agents/QTR Agents/YR
Maintain 10 Producing Agents
Maintain 6 Producing Agents
Maintain 2 Producing Agents
1) Mergers / Acquisitions
2) Advertising 3) Agency Office 4) Seminars 5) Business phone/ pager / 800# / Fax 6) Laptop Computer 7) Partnering 8) Recruiting presentation 9) Annuity / high premium selling 10) Weekly reports 11) Monitor agents 12) Awards / Incentives 13) Referrals / Phone Book / Associations 14) Education (CLU, CFP, LUTCF, ChFC) 15) Concentration 16) Delegation 17) Mailers / Leads 18) Convention 19) Goal Setting
6 Agents Per YR
4 Agents Per YR
2 Agents Per YR
2) Participate in Regional Seminars
Yes
3) Conduct Agency Seminars
Yes for ESD-Aspirants
Participate
4) Provide Agency Sales and Training Support
5) $250,000 Paid Target Premiums/YR
$100,000 Paid Target Premiums/YR
$60,000 Paid Target Premiums/YR
$36,000 Paid Target Premiums/YR
6) $500,000 Total Premiums
$250,000 Total Premiums
$100,000 Total Premiums
$60,000 Total Premiums
7) Quarterly Progress Review With RD
With Immediate Manager
8) Annual Review with RD

30. Agency Building Blocks
Rights Reserved
1) Recruit - Producer, Recruiter
2) LEG
3) Magnificent “Seven”
4) Rule of “Three”
5) Principle of the understudy
6) Bottom/Top Approach
7) Recruit-Train-Sale Cycle
8) Teamwork/Involvement
9) Lead from the front
10) Quality vs. Quantity – Collect/Select
11) Generalization-Specialization Cycle
12) Simplify - KISS
13) Sowing/Reaping - Stout-Hearted
14) Set the example
15) Go forth and multiply
16) Numbers game - +/-, Attrition, Prime, Progression
17) Curves- Straight line, Pulse, Supply, Ravine / Death-defying, Crash-landing, Sine, Square, Cubic
18) Anarchy
a) Absence of Rules b) Rules are impossible to implement c) Nobody is implementing the rules d) Rules are being violated with impunity
19) Five Pillars - Professionalism, Persistency, Perseverance, Production, Proficiency
20) Management Cycle - Planning, Organizing, Staffing, Directing, Controlling
21) Goal Setting
22) 7 C’s of Success - Commitment, Competence, Concentration, Consistency, Creativity, Control, Conduct
23) Maximin = Minimax

31. Recruit A recruit is not a recruit without a recruit
Rights Reserved
Recruit
A recruit is not a recruit without a recruit
A recruit is both a producer and a recruiter

32. A leg is not an effective leg without another leg
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LEG
A leg is not an effective leg without another leg

33. Magnificent “Seven” Tested to be the most efficient
Rights Reserved
Magnificent “Seven”
Tested to be the most efficient
Seven members of a squad
Seven days in a week
Less-not enough, inefficient
More-Too much to handle

34. Out of the seven, select your best three
Rights Reserved
Rule of Three
Out of the seven, select your best three

35. Principle of the Understudy
Out of your best three, select your understudy that can duplicate or replace you
Rights Reserved

36. Service the bottom Inform all at the top Bottom/Top Approach
Rights Reserved
Service the bottom
Inform all at the top

37. Cycle of Success RECRUIT Marketing Structure Professional Development
Rights Reserved
RECRUIT
Marketing
Structure
Professional
Development
Financial
Independence
TRAIN
SELL

38. Teamwork/Involvement
Rights Reserved
No man is an island
The whole is more than the sum of its parts
Congregation

39. Lead from the front in sales, recruiting, and training
Rights Reserved
Set The Example
Lead from the front in sales, recruiting, and training

40. Collect and collect; and then select
Quality vs. Quantity
Rights Reserved
Collect and collect; and then select

41. Generalization/Specialization Cycle
Rights Reserved

42. Keep It Simple and Sincere
Rights Reserved
Simplify
K I S S
Keep It Simple and Sincere

43. Sowing/Reaping What you sow you reap a thousand times
Rights Reserved
Sowing/Reaping
What you sow you reap a thousand times
Stout hearted men

44. The ultimate of selling is in agency building
Rights Reserved
Go Forth and Multiply
The ultimate of selling is in agency building
If you don’t talk about recruiting, it will never happen

45. Numbers Game +/- Attrition Prime Progression Arithmetic Geometric
Rights Reserved
Numbers Game
+/-
Attrition
Prime
Progression
Arithmetic
Geometric

46. Curves Straight Line Square $ Pulse Supply Sine Ravine/Death Defying
Rights Reserved
Straight Line $ y
Cubic $ y
Supply $ y
Sine $ y
Pulse $ y
Ravine/Death Defying $ y
Square $ y
Crash Landing $ y

47. Why Anarchy? Absence of Rules Rules are impossible to implement
Rights Reserved
Why Anarchy?
Absence of Rules
Rules are impossible to implement
Nobody is implementing the rules
Rules are being violated with impunity

48. Five Pillars Professionalism Persistency Perseverance Production
Rights Reserved
Five Pillars
Professionalism
Persistency
Perseverance
Production
Proficiency

49. Management Cycle Planning Organizing Staffing Directing Controlling
Rights Reserved
Management Cycle
Planning
Organizing
Staffing
Directing
Controlling
Always go back to planning
every time there is a hitch

50. Book of Success Front Cover: Goal Setting Body: 7 C’s of Success
Rights Reserved
Book of Success
Front Cover: Goal Setting
Body: 7 C’s of Success
Commitment Creativity
Competence Control
Concentration Conduct
Consistency
Back Cover: Maximin=Minimax
Maximize profit, subject to minimum utilization of your own resources
Minimize cost, subject to maximum utilization of other people’s resources
Should be balanced