Naturally, the parties of any proposed agreement should always consult with their attorneys and tax advisors before anything is finalized.

Here's a hypothetical example: Using life insurance to fund all or a portion of the business valuation, a typical $500,000 whole life policy on a preferred male age 50, nonsmoker, in New York should cost about $12,000 annually. The approximate projection of cash value on a guaranteed basis in 15 years would be more than $140,000 and could be substantially greater on a nonguaranteed basis with dividends used to purchase paid-up additional insurance.

The producer's first-year commission could be in the 55% range, or higher with overrides. Assuming two individuals of the same age, the commissions in the first year could be well over $12,000. The many valuablebenefits permanent life insurance can provide is beyond the scope of this column, but the more you look at what this planning can achieve, the more comfortable and convinced you will become. With appropriate legal and tax advice, proceeds paid out from a life insurance policy can often provide very favorable tax advantages.

Related: Go outside to grow your agency's business

With some creativity, the contingencies for other events such as disability, retirement, early withdrawal and an emergency fund can also be incorporated into the agreement.

The potential new sales and revenue opportunity using the old “Stand-By” are almost unlimited. You:

• Helped your client protect his or her future financial security with contractual guarantees.

• Met a new qualified prospect (your client's other end of the “Stand-By” who potentially can become your client); after all, his or her insurance broker did not come up with this idea — you did.

• Can use the “Stand-By” yourself with other agency owners, often those you know well, who may not have the possibility for establishing a buy-sell succession plan internally or with family.

In previous articles I talked about multi-line and cross-selling opportunities, and that 80% of your new sales will come from existing clients. This is a clear example of what you can do to create more sales and revenue opportunities.

Start right now. Go through your client base and pick out six or so to start with. Over the years we did this in our agency with trade contractors, dentists, machine shops and others. The possibilities are endless. If you are life-licensed, your general agent will be glad to help design the right plan. If you are not licensed, partner with someone who is—and then get your license. Remember: You are in the insurance business. You sell insurance to protect assets. Don't limit yourself to selling only P&C or only life insurance.

Barry Seigerman is an independent broker/producer. Contact him at [email protected].

Related: Take an 'inside' look at your sales process