How Financial Advisors Can Buy Leads for Life Insurance Clients

Financial advisors who buy life insurance leads gain access to a pool of prospects actively searching for coverage, streamlining the process of connecting with potential clients. Leads are typically available through providers offering options such as exclusive contacts, shared lists or real-time inquiries. By purchasing leads tailored to specific demographics or coverage preferences, advisors can focus their efforts on converting prospects into loyal clients.

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Why Buy Life Insurance Leads?

Advisors often buy leads to avoid the time-consuming process of finding qualified prospects themselves.

Companies and marketplaces that sell life insurance leads have a ready-made pool of potential customers who are interested in purchasing an insurance policy. These are people (and businesses) who have already answered some basic questions about their life insurance needs and gotten quotes from multiple carriers.

Advisors and life insurance agents who purchase these leads have an opportunity to connect with someone who’s already in the buying mindset. Your task is simply to guide them toward the right type of life insurance policy for their needs. That’s helpful, since one common challenge in selling life insurance is addressing objections from hesitant clients.

Insurance lead generation services can save you time since you don’t have to do any prospecting directly. You can create a target profile for the types of insurance shoppers you want to attract, and the lead generation company does the rest. That’s a significant advantage if you’d like to free up time for other business tasks.

You can get leads delivered to you in real time and decide which ones to follow up on. And you can decide how many leads you’d like to receive, based on your maximum budget for purchasing them.

Where (and How) to Buy Life Insurance Leads

If you’re interested in buying life insurance leads for your advisory business, you’ve got plenty of options to choose from. Online lead generation platforms can vary widely in structure, cost, and quality.

For example, some marketplaces may sell shared leads while others sell exclusive ones. Shared leads can be sent to multiple advisors, which can mean more competition for you. The upside, however, is that you’ll typically pay less per lead when they’re shared.

Exclusive leads will cost you more, but they can yield a valuable benefit. Rather than being distributed to multiple advisors or insurance agents, these leads are specially chosen for you based on the criteria you select. Only you receive these leads, which may improve your chances of converting them into clients.

When considering which lead generation company to use, it helps to set your filters first. For example, do you want to target clients based on a specific type of life insurance need or age demographic? Or does your ideal client base consist of high-net-worth investors? The more you can tailor this profile the better, as it can make it easier for a lead generation service to only send you leads that align with your business services.

Comparing Life Insurance Lead Generation Services

Next, take a look at how the service works. Here are 10 helpful questions to ask when comparing life insurance lead generation marketplaces:

Does the company only generate leads for life insurance, or does it offer other types of leads as well?
How much will you pay per lead?
Are fees applied at a flat rate or are they tiered? For example, is there a discounted rate for leads that are more than 30, 60 or 90 days old?
Are there any upfront fees or other fees to know about?
What is the minimum and maximum budget you’re allowed to set for buying life insurance leads?
How quickly can you expect leads to be delivered?
Does the marketplace provide any tools to assist with follow-up? For example, will you have access to custom email templates or lead-tracking tools?
Is there a minimum contract required and if so, what’s the duration?
How responsive is customer service if you have questions or need help managing your account?
Do you offer a refund policy for leads that you’re unable to contact?

Asking other advisors or insurance agents which lead generation service they use can potentially help you identify marketplaces you might want to work with. Don’t be surprised, however, if they prefer to keep this information to themselves if they’ve found a winning company to work with.

Are There Any Drawbacks to Buying Life Insurance Leads?

A financial advisor discussing life insurance options with clients.

Making any type of investment in your business carries a certain degree of risk and buying life insurance leads is no different.

The biggest risk is that the amount of money you put into buying leads exceeds the amount of sales revenue you’re able to generate. If you’re buying life insurance leads but none of those leads convert, or a smaller-than-expected number do, you could end up with a negative return on your investment.

A good life insurance lead marketplace will have a refund policy in place that allows you to get back some of what you spend if they’re sending leads that have incorrect information or that are otherwise not contactable. But that’s not always guaranteed.

Setting some baseline numbers for ROI and/or conversions can give you a framework for gauging whether any lead generation service you’re investing in is worth it. For example, you might set a target of converting 15%-20% of all leads that come your way or generating three to five times the amount you spend per lead in commissions over the duration of each policy you sell.

These are effective goals because they’re concrete and measurable. You can periodically review your metrics to see how well you’re doing and whether you need to either adjust your goals or consider buying leads from another company to increase conversions.

Measuring Your Success

When buying life insurance leads, success hinges on understanding the quality and conversion potential of these referrals. High-quality leads are typically those generated from reliable sources, containing accurate, up-to-date information about individuals actively seeking life insurance solutions.

To ensure that your lead buying strategy is effective, consider evaluating these four performance indicators (KPIs):

Conversion rate: This measures the percentage of leads that become clients. A high conversion rate indicates that your approach is effective.
Cost per acquisition (CPA): Lowering your total cost of acquiring a new client, including the cost of leads and any additional marketing expenses, can improve your return on investment.
Lead quality score: Assess the quality of leads based on factors such as their responsiveness and likelihood to purchase. This can help you identify the most valuable qualified lead sources.
Customer lifetime value (CLV): Estimate the total revenue you can expect from a client over the course of your relationship. This can help you understand the long-term value of your leads.

Compliance Considerations When Buying Life Insurance Leads

Financial advisors must follow strict compliance guidelines when buying and using life insurance leads.

First, ensure that all leads comply with Do Not Call (DNC) registry rules and the Telephone Consumer Protection Act (TCPA). Violating these rules can result in hefty fines, especially when contacting consumers without prior consent.

Additionally, advisors should verify that any personal information collected through lead providers is handled in accordance with data privacy regulations—such as secure data storage and proper disclosure practices.

It’s also important to confirm that the lead generation company is transparent about how it sources and qualifies its leads. Advisors affiliated with broker-dealers or RIAs may need to seek approval before using third-party lead vendors. Maintaining accurate records of lead interactions and consent can help protect against regulatory scrutiny.

Always consult your firm’s compliance team or legal counsel before implementing any lead-buying strategy.

Buying General Leads

Aside from specifically buying life insurance leads, you can also consider purchasing leads in need of a general financial advisor. While they may not immediately be in the market for a life insurance policy, they could eventually need life insurance down the road. By providing these potential clients with quality service, whether it be asset management, financial planning or consulting, they may consider you later on when they’re looking for life insurance.

And if you’re interested in purchasing leads, consider SmartAsset’s Advisor Marketing Platform (AMP), a subscription-based lead generation and marketing solution for fiduciary advisors. You can add clients at your desired pace, targeting up to 540 referrals per year, and automatically connect with verified leads over the phone using AMP’s live connections feature.

Furthermore, the service enables you to automate your marketing and outreach efforts, creating personalized email and text campaigns that are automatically sent to leads.

Alternatives to Buying Life Insurance Leads

If you don’t have the budget to buy life insurance leads or you’re concerned about not making money on your investment, there are other ways to attract clients to your business. Some strategies you could try are:

Lead aggregators: Lead aggregators don’t generate leads themselves; instead, they buy them from other outlets. This can be a more cost-effective way to gain access to a large list of leads, though keep in mind these lists are likely shared among other advisors.
Cold calling: Cold calling could be an effective way to gain new insurance clients if you have a solid pitch. You may not have to spend money, only your time, but keep in mind that if the people you’re contacting aren’t ready to buy you may end up with a lower conversion rate than you’d like.
Referrals: One of the best ways to attract new clients is to leverage the ones you already have. Letting your clients know that you’d be happy to talk to any friends or family members who have questions about life insurance is a simple but highly effective way to generate leads.
Website and social media: Having a website is more or less a requirement for advisors who want to get noticed online. Combining a website with social media content can help you increase your search visibility and attract prospects who are interested in and ready to buy life insurance products.
Email and direct mail marketing: Email can be one of the most powerful marketing tools when done correctly. You can segment your list and tailor your messages to speak to the pain points of investors who are trying to figure out what kind of life insurance they need. Adding in direct mail marketing can expand your reach even further, potentially driving more conversions.

Testing out different strategies can help you determine what works and what doesn’t for your business. And if you’re considering lead generation services, look for one that has earned a reputation for delivering outstanding results and top-tier service to advisors.

Bottom Line

A financial advisor meeting with two life insurance leads.

Whether you should buy life insurance leads can depend on what you’re trying to accomplish for your business. The quality of the lead generation marketplace you’re using can directly affect your results. Estimating how much you’re willing to budget for lead generation services and your projected ROI can make it easier to decide if it’s the right move to pursue.

Tips for Growing Your Advisory Business

SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Developing a marketing plan yourself can save money if you’re not paying an agency’s fees. Having a financial advisor marketing plan template to follow can make it easier to develop a strategy that aligns with your firm’s needs and goals.