The life insurance industry is crowded with over 911,400 licensed life insurance agents, agencies, and brokerages in the United States of America. The average cost to acquire a client using life insurance lead generation has skyrocketed to $900 per client. While insurance profit margins have plummeted to an average of 2% to 3% in the life insurance industry.

Get the answers to your insurance company marketing questions in this article to find out the reasons why the cost of generating life insurance leads has skyrocketed, how to lower the cost of life insurance leads, and how to increase your life insurance profit margins and get to the next level!

There are two issues with generating insurance leads online. 

1. The cost of life insurance leads online is astronomically high!
2. The ROI of Buying Life Insurance Leads needs to be higher, to say the least.

Why Exclusive Life Insurance Leads are Often Not Really Exclusive?

The challenge when you buy “exclusive life insurance” leads is that they rarely are sold exclusively, even if an insurance lead generation company says they only sell an exclusive insurance lead. Secondly, suppose you buy a real, exclusive insurance lead. In that case, you have to know how to work that insurance lead and follow up over time to make that insurance lead worth the cost. Proving that life insurance leads are exclusive is nearly impossible. Think about it: how can you prove the leads are exclusive?

Yes, there are insurance live transfer leads, but who is to say these leads have yet to be contacted by other insurance agents tens of times already. For insurance lead generation companies, it is far too easy for them to get away with selling “exclusive” leads that are not really an exclusive insurance lead and making more money from their leads. This is not to say that all lead-generating companies participate in this shady practice of reselling leads as an “exclusive” lead. Even when you purchase a real, exclusive lead unless you have an airtight marketing and sales lead strategy, insurance sales funnel, and lead follow-up system, a teeny weeny percentage of those leads will convert. This brings us to one of the biggest roadblocks when you buy life insurance leads.

What is the ROI When You Buy Life Insurance Leads?

The ROI of purchasing leads in the life insurance industry could be much better! Our team ran an investigative research study on 20 of the biggest leads providers in the insurance lead industry. The average cost per lead for all types of insurance is $28.81 per lead. Life insurance sales have a slightly lower insurance leads cost of $25.44 per lead. The average commission for selling life insurance is $15.60 per month for the first year of a sold policy and roughly $1.69 per month for renewals. Understanding these facts, let’s explore the ROI of purchasing insurance leads for your business. 

• To close one client at an 8% close rate, you would need to purchase 12 insurance leads at $305.28.

• To break even on a customer acquisition cost of $305.28, you would have to wait 6.8 years per client.

If you know that you have to spend $305.28 to acquire a client, you will only make $187.20 in commissions in the first year.

The only way purchasing leads makes sense is if you have an airtight marketing and sales strategy, sales funnel, follow-up system, and patience. Even then, why spend so much money on a lead? You could be generating marketing leads for $0 by building your own marketing lead generation system, especially for an established insurance agency, brokerage, or company that needs to get to the next level. Scaling by purchasing leads becomes expensive and challenging, slamming your profit margins to malnourished levels. Cold calling and building a sales team will only grow your agency so far; when you need to get to the next level, you need to lower costs, increase profit margins, and scale the company with more highly qualified marketing leads.

To get to the next level, you need a proven lead generation system that lowers your costs, increases your profit margins, and provides qualified leads that enable you to scale easily. 

The Best Lead Generation Strategy for Insurance Leads

90% of potential lead clients we speak with have yet to invest in their marketing and sales lead strategy. Your marketing and sales lead strategy is the foundation for your insurance business. Suppose you need a stronger marketing and sales lead strategy. In that case, you are building your insurance business on mud, and scaling will be nearly impossible.

You need to create your marketing and sales lead strategy. Hence, you know exactly whom to sell your products or services to, how to reach them, make them an offer they cannot refuse, and position your offer as the ideal solution from the competition. 

You could use a proven marketing and sales lead strategy that results in new revenue for your business. That’s because you need to understand your business goals, ideal customer, and products or services, so you know exactly how to reach your customers and make them an offer they cannot refuse. 

With a clear view of your marketing and sales lead strategy, you can see the best marketing and sales lead avenues to reach your ideal customers.

You need to choose marketing and sales avenues where your costs go down over time and your ROI increases. Insurance lead generation using paid advertising only drives your costs up over time and your ROI down over time. Since the biggest insurance companies in the industry can afford to lose money to put you out of business and take your market. Here is how much the largest insurance companies in the world spend on Google Ads each year:

1. State Farm spends $43.7 million on Google Ads lead generation each year for leads.

    

2. Progressive spends $43.1 million on Google Ads lead generation each year for leads.
3. Quicken Loans spends $21.1 million on Google Ads lead generation yearly for leads.
4. eHealthInsurance spends $20.6 million on Google Ads lead generation yearly for leads.

The cost of insurance for paid advertising is only increasing year after year. Here is a breakdown of the average increase in the cost of insurance-paid advertising yearly. 

• The cost of advertising insurance on Facebook owned by Meta increases by 61% yearly.

• Tiktok insurance ads increase 185% yearly on average.

• Instagram insurance ads increase 23% yearly on average.

• Google insurance ads increase by 14% yearly for search insurance ads and 75% yearly for programmatic display insurance ads. 

• On average, it costs $301.60 to acquire one insurance client from Facebook Social Media Ads.

• On average, it costs $160 to acquire one insurance client from Instagram Social Media Ads.
  

• On average, it costs $160 to acquire one insurance client from TikTok Ads.

SEO, or Search Engine Optimization, is one of the only organic marketing channels that deliver leads and clients for as close to $0 as possible over time. Unlike paid advertising, your costs for generating leads and clients increase over time. When you invest in SEO, your costs for generating leads and clients only go down over time! After one year of investing in SEO, your cost of acquiring new clients is $116 per client, and after two years, it goes down to $0 on average. SEO leads convert more than paid advertising leads because they are inbound leads, not outbound leads. 

SEO leads convert 14.6% compared to only 1.7% for outbound advertising leads like social media ads. 

Is This Worth It If You are New to Life Insurance Sales?

For agents that are new to the insurance industry, most of you are probably strapped for cash. For agents new to the insurance industry, you should start by creating a strong marketing and sales strategy, even if you are anxious to start selling. New agents need to invest in outbound insurance leads generation to start growing their sales pipeline.

Once new agents have a sales pipeline, at the very least, these agents should set up their marketing Google Business Profile and invest in local SEO marketing so you can generate higher quality inbound marketing leads and clients for free that don’t take up all your time. Lastly, new agents must have a strong sales funnel and follow-up strategy to nurture leads so they become clients over time. Investing in your sales funnel and follow-up can increase your lifetime revenue per people by upselling other services like health insurance. 

Whether you are a financial advisor or a new agent, following this strategy will lead you to sell more services in your company today. Even new agents and advisors giving financial advice could sell more of their service using this strategy for their company.

What are Leads in Life Insurance?

A life insurance lead in the life financial industry is someone who has expressed interest in your insurance services. They may have given you personal information like their name, phone number, email, or more.

How Do Insurance Companies Generate Leads?

Insurance companies use various marketing tactics to generate new business work, including cold calling, referrals, strategic partnerships, social media advertising, SEO, and more ways.

How Much Does It Cost to Buy Life Insurance Leads?

Based on our investigative research study on the 20 largest lead providers selling insurance lead services, the average pricing is $25.44 per lead.

How to Self-Generate Life Insurance Leads?

The best way to build your own insurance lead pipeline is to invest in your marketing and sales strategy, marketing channels that deliver at the lowest cost, and create a fantastic sales funnel and follow-up strategy that increases your ROI over time. Social media ads only drive your costs up over time. Investing in SEO drives your costs down over time while increasing your profit margins so you can scale. New agents and established agencies can increase their ROI using SEO.