I’ve been creating annuity leads since 2010. Over those 16 years, I’ve talked with more than 10,000 agents and advisors, and about 3,000 of them have bought leads from us. I’ve watched a lot of people make good decisions about lead companies, and I’ve watched a lot of people get burned.
One thing agents tell us all the time is that they appreciate how much we share about how our program works. Most of the companies we compete with tell you very little about their process. That’s a big reason I’m writing articles like this one. The more you understand about how leads are made, the better your decisions will be, whether you end up buying from us or from somebody else.
So here are the biggest mistakes I see agents make when they choose a lead company. I was asked to narrow it down to seven. I couldn’t do it. These all matter.
In This Article
- Mistake #1: Choosing on Price Instead of Process
- Mistake #2: Not Knowing What the Ad Said
- Mistake #3: Buying “Appointments” Without Knowing What That Means
- Mistake #4: Putting Too Much Weight on “Phone Verified”
- Mistake #5: Buying Cheap Overflow Leads
- Mistake #6: Using a Company That Dabbles in Annuities
- Mistake #7: Prepaying or Locking Into a Long Contract
- Mistake #8: Being the Guinea Pig for a Startup
- Mistake #9: Testing Too Fast or With Too Few Leads
- Mistake #10: Believing “John D.” Testimonials and Marketing Hype
- Mistake #11: Ignoring How Many Agents Share Your Territory
- Mistake #12: Seeing an Easy Refund Policy as a Plus
- How I’d Shop for Leads If I Were You
Mistake #1: Choosing on Price Instead of Process
Price matters. I’m not going to pretend it doesn’t. But a lot of agents focus on the price of the lead and not on the process the person went through to become a lead. Those are two very different things.
When I started the business in 2010, our leads sold for $35. Those were co-registration leads, and they were nothing close to what our program looked like even two years later. Since then, our price has gone to $79, $99, $125, $150, $200, $250, and now $300. Every time we raised the price, we also changed the process behind the scenes, the way we create, scrub and deliver the leads. A $35 lead and a $300 lead are not the same product with a different sticker. One is a name and a phone number. The other is a person who has gone through a real process, been reviewed by real people, and been thrown out if something didn’t add up.
So what’s the difference between buying a name and phone number and buying a real opportunity? A real opportunity is someone with real intent. If you sell annuities, that means two things.
First, they have to be interested in annuities. They’re open-minded about them. That’s step one.
Second, they have to be qualified. They need to have the money, and they need to be suitable to actually buy an annuity. Someone who’s interested but has no money is no good. And someone who has money but isn’t interested is no good either.
The best way we’ve found to get both is to make people go through a series of steps where they have to provide a lot of information. The more work they have to do, and the more information they have to give, the better the lead quality will be, regardless of the source.
Where’s the line on price?
I’ve seen claims that you can create your own annuity leads on Facebook for $35. It’s ridiculous. You can’t create a high-quality lead for $35. I don’t care who it is.
Let me give you an idea of what it actually costs. We run lean. I have four employees. All of us work from home, so there’s no office, no extra overhead. I’ve done everything I can to keep our core expenses at a bare minimum. But when you add up our staff, our software, our Annuity Rate Watch account, and the other core expenses, our overhead is probably $60 to $70 per lead.
That doesn’t include media, which is by far our biggest expense. If our advertising cost was zero, we’d still have to sell our leads for over $100. And in 2026, advertising is not free. The cost to create leads goes up every year, because the cost of everything goes up every year.
Most of the companies we compete with charge $400 to $500 per lead. We’re at $300, and we haven’t raised our price in years. At some point we’ll have to.
So when I see leads offered for under $200 or $250, I think the odds of an agent being disappointed are extremely high. I won’t say it’s impossible to have a good experience. I’ll say it’s very improbable, based on what I know things cost. At that price, a company can’t afford to scrub the leads. It just can’t. Some companies have sold non-exclusive leads for around $250, sold to three or four agents at the same time. Keep that in mind. For the most part, none of the reputable companies that actually scrub their leads are under $250.
The question to ask: What does a consumer have to do to become one of your leads? How many questions do they answer, and does a person review the lead before it’s sent?
Mistake #2: Not Knowing What the Ad Said
This is the mistake almost nobody thinks about, and it might be the most important one on this list.
Every lead started with an ad. Whatever that ad said decides who responded, what they expect when you call, and how easy they’re going to be to close. If you don’t know what the consumer was promised, you don’t really know what you’re buying.
The word “annuity”
Here’s something most lead companies won’t tell you. A lot of them don’t use the word “annuity” anywhere in their marketing, but they still sell the result to you as an annuity lead.
In my experience, you can increase the response to a campaign 5 to 10 times just by taking the word “annuity” out. The reason is simple. A lot of people absolutely hate annuities. It doesn’t matter what you tell them or what you show them. To them, “annuity” is a four-letter word, and they’re not going to change their mind.
Annuities are like politics. People are on one side or the other, and good luck changing their minds if they aren’t open-minded. Most people aren’t, especially today.
So when a company uses the word “annuity” in a positive way in its advertising, it’s attracting people who are already open to annuities. That’s worth a lot.
There’s another reason it matters. To respond to an annuity ad, people usually have to know what an annuity is. In my experience, the people who respond to annuity ads are typically in the top 30% of the country in income, net worth, and education. They’re more likely to have money.
Take the word “annuity” out, and who responds? The other 70%, which, frankly, has very little money. According to the Federal Reserve, the median net worth of an American household is about $193,000. Think about that. Half the households in the country are worth less than that, and that number includes their homes. The money they actually have available to invest is a lot less. With today’s suitability rules, you can’t even get many of these people approved for an annuity. Carriers have tightened suitability a lot compared to 20 years ago.
Believe me, I wish everyone had money. Our job would be a hell of a lot easier. But the reality is we’re trying to create leads from the top 20% to 30% of the population, and only from the people in that group who are open to annuities. When you take the word “annuity” out of the ads, you attract the wrong people. None of the marketing companies are going to tell you that. But that’s what we’ve experienced.
The test that proved it
About nine or ten years ago, two FMOs came to me. Between them, they probably worked with a thousand agents, and they wanted to endorse a lead program to both of their FMO communities. They promised me hundreds of agents who would buy the leads if I could get a single premium whole life lead program up and running. So I built one and tested it on the radio.
The product was single premium whole life. It was an insurance policy, not an annuity. That’s why I positioned it in the campaign as a “safe money alternative,” for people who wanted a safer place to invest, and built the commercial around the product’s features. The ad didn’t say “life insurance,” and it didn’t say “annuity.”
We ran it in about eight markets across the Midwest, on 8 to 10 radio stations, including WGN in Chicago, right alongside our regular annuity campaign. On a given station, we’d run 20 or 30 commercials, half of them our annuity ad and half the safe money ad. Our annuity ad was very specific: it was for people who wanted information on the best annuities in the market.
Some stations pulled in 10 times more leads on the safe money message than on our annuity message.
Then we found out what those leads were worth.
At the time, one of our clients was a $15 million a year producer. Today he does $40 to $50 million a year. His team was converting one out of three of our annuity leads. One out of three, all day long. And that was 10 years ago, when our leads weren’t scrubbed as much and were harder to close. My guess is that one in three back then would be more like one in two today.
We sent his group 200 of the safe money leads from that two-week radio campaign. They closed none of them. Zero for 200.
To be fair, this wasn’t a perfect experiment. The two campaigns were selling different products, and these agents knew annuities a lot better than they knew life insurance. You could knock them for not really being a life insurance shop. Fair enough. But think about it: the same team, working leads from the same radio stations in the same weeks, closed one out of every three leads from our annuity campaign and zero out of 200 from the safe money campaign.
It wasn’t just him. We had an agent in South Carolina who ran the same test on a smaller scale: the same amount of money on the same radio station, an even split. He got about 35 leads from the safe money campaign and three from our annuity campaign. He closed one of the three annuity leads. He closed none of the 35 safe money leads. Zero for 35 on one campaign, one for three on the other.
Those weren’t the only two. In total, about 20 of our active annuity lead clients bought the safe money leads too. One or two of them preferred the safe money leads, because they liked the extra activity. The other 18 preferred our annuity leads. That’s why I didn’t continue the program. Eighteen out of 20 agents preferred what we were already doing.
The message decides who responds and how easy those people are to close. Most agents don’t want to fill up their calendar. They want to fill up their pocketbook with closed business. If your calendar is full of people who hate annuities or aren’t open to them, you can talk to them all day long, but you’re going to be spinning your wheels.
“Most agents don’t want to fill up their calendar. They want to fill up their pocketbook.”
One of the things our clients tell us they like about our program is that they don’t get many leads, but they close more of them, and the return on their time is better. Most agents don’t want 20 leads a week to call. They’d rather get two or three that are real opportunities. Some lead companies are built for that and some aren’t. Your job is to figure out which path a company has gone down.
Don’t make the agent unsell the ad
The promise in the ad matters for another reason. Most people who become annuity leads are not stupid. If you promise them something unrealistic, they’re going to remember it.
You’ve probably seen the ads: “Earn 12% guaranteed.” With rates where they are, you can’t earn 12% guaranteed. It doesn’t exist. Some of these ads have been running for years, and I’m amazed they haven’t been shut down. I’m a CFP® professional, and I’ve been insurance licensed since 1998. I know these products better than a lot of the marketing companies advertising them. Some of those companies don’t have any ethics about what they say. They’ll say whatever it takes to create the lead. I’m not willing to do that.
What we’ve seen is that some parts of the country are more forgiving than others. In the Midwest and in rural markets, people tend to be easier to work with, and a good salesperson can sometimes smooth over what a misleading ad promised. Even 16 years ago, when our leads were nowhere near as good as they are now, we had agents succeeding in those markets.
But in the areas with more money and more education, like New York City, New Jersey, Connecticut, Chicago, San Francisco and Florida, people are less forgiving. They remember what they were promised, and they expect to get it.
That’s the real test of a lead program. The question isn’t whether it works in Kansas. It’s whether it works in New York, New Jersey, Chicago and San Francisco, the markets that are naturally the hardest.
When a lead company makes big promises to create a lead, the agent who calls that lead has to unsell the advertising. That’s the worst position an agent can be in. The consumer isn’t going to be happy, because they aren’t going to get what they were promised. And the agent paid good money for a lead who’s less interested than they should be, and harder to deal with because of it.
“When a lead company makes big promises to create a lead, the agent who calls that lead has to unsell the advertising.”
This whole industry runs on trust. How do you build trust with someone when the relationship starts with a lie? You don’t.
That’s why we built our consumer offer around something agents can actually deliver. We promise consumers a comparison report on the best annuities in the market, and we designed that offer around what Annuity Rate Watch can produce, so any client of ours can deliver it. If agents can’t deliver on what consumers were promised, why should the consumer trust the process? They won’t.
David Ogilvy, one of the most famous advertising men who ever lived, said, “The consumer isn’t a moron; she is your wife.” I’ve always thought about my business the same way. You don’t lie to your spouse, not if you want a long, good relationship. We try to be honest with our clients and with the consumers we market to, because we want to build trust with both.
Leads who already own an annuity
One more thing about who responds. About 40% to 45% of our leads already own an annuity, and some agents worry about that. They shouldn’t.
The hardest sale to make is to someone who has never bought an annuity. The easiest sale to make is to someone who has already bought ten. They’ve been through the process. They’re comfortable with it. You don’t have to convince them, unsell them, or change what they believe. That’s another reason the message matters: an honest annuity ad attracts people who already know what annuities are.
The question to ask: Can I see the ad and the page the consumer responded to? Does it use the word “annuity”? And what exactly was the consumer promised?
Mistake #3: Buying “Appointments” Without Knowing What That Means
A lot of companies sell annuity appointments now. Before you buy one, find out exactly what the company means by “appointment.”
Here’s an example from our own history. When we ran radio and TV, consumers called into a call center and answered a series of 11 questions. They were told an annuity specialist would call them, and they were asked if they had a preferred time of day for that call. Some marketing companies would call that an appointment.
I don’t. A preferred time for a phone call is a callback window, not an appointment. To me, an appointment means the consumer has agreed to meet with a specific advisor, at a specific time, for a specific purpose, whether that’s at their kitchen table, in an office, or on Zoom. From what I’ve been told, a lot of the appointments being sold today aren’t very solid. The stick rate, meaning the share that actually happen, is very low.
The bigger point is that you need to see past the marketing angle a lead company is using on you. Look at what you’re actually buying, not at the label. And remember what I said about the word “annuity”: most of the companies selling annuity appointments don’t use that word anywhere in the campaigns that book them.
The question to ask: Did the consumer agree to a specific day and time, a format, and a named advisor? And what percentage of your appointments actually happen?
Mistake #4: Putting Too Much Weight on “Phone Verified”
A lot of lead companies brag that their leads are phone verified. Phone verification is helpful. It means the person answered. But agents overvalue it, and they undervalue two things that matter more: how many questions the consumer had to answer, and what the ad said.
I know what some of these verification calls look like, because I’ve tested them. My assistants and I have become leads with several companies that sell annuity leads, just to see what happens. Some of them get the person on the phone for about 30 seconds. They verify the name, ask a question, and their whole goal seems to be getting the person off the phone as quickly as possible. That’s not a company doing a lot of work, in my opinion. But they can say the lead was phone verified.
Here’s a little trick we use when we test. I have an app on my phone called TextFree. When I need to give someone a phone number but don’t want to give out my real one, I give them that number, because it doesn’t actually ring. By the way, apps and services like that are exactly the kinds of things our team looks for when we scrub our leads.
Those tests taught us something else too, about the agents on the other end. Every time we’ve done this, most agents called once. That’s it. No follow-up after that. We’ve only done it a handful of times, so it’s a small sample. But one time one of my assistants booked an appointment with an agent and then called to reschedule. The agent started cursing him out on the phone. It was completely unprofessional.
The point is that trust is built just as much by the ad someone sees before they become a lead as by anything that happens afterward. A 30-second verification call doesn’t build trust. It just confirms the phone works.
“Trust is built just as much by the ad someone sees before they become a lead as by anything that happens afterward.”
The question to ask: What happens on your verification call? How long does it last, and what does the consumer get asked?
Mistake #5: Buying Cheap Overflow Leads
A few years ago, I talked with an agent who was buying from one of our competitors. That company sells its regular leads for $400. The leads it can’t reach, or that don’t qualify, it sells for $100.
This agent spent about $50,000 on those $100 leads. He didn’t close a single one.
That shocked me, because he was a very good producer, doing more than $10 million a year in premium. He was really, really upset, and I didn’t know what to tell him.
There’s a reason those leads were in that bin. We’ve never sold our junk leads, the ones that turn out to be insurance agents, financial advisors, disconnected phone numbers, or are just obviously bad, because I didn’t want to deal with the problems. Leads like that are going to be too hard for any agent to close.
Think about why a lead ends up in the reject pile in the first place. Some have a phone number from an internet calling service like Magic Jack. Those phones don’t really ring, so the odds of reaching the person are very low. You could still email them, knock on their door, or mail them a package, so they aren’t completely worthless. But they’re much harder to make work than a fully vetted lead. Others turn out to be insurance agents or financial advisors, and those are worth little to nothing. So is a 93-year-old. And someone with only $10,000 to invest is worth a lot less than a real prospect. That’s the pile those $100 leads come from.
What a company that sells everything is really selling you
That’s also why you should worry about any company that sells nearly every response it gets.
We know that in any batch of responses, a certain percentage are going to be insurance agents. A certain percentage will be over 83, over 85, or over 90. A certain percentage will have bad phone numbers, or investment amounts that are too low. Some will give fake information. Some will have a spouse who works in the industry. Some will give information that’s just not accurate. These are all reasons we scrub leads.
If a company is selling every lead it generates, it’s selling you all of those too. Ask how many leads a company throws away. If the answer is “almost none,” the leads aren’t that good.
The question to ask: Was this lead rejected or set aside by your regular program? Why? And how many of your responses do you throw away?
Mistake #6: Using a Company That Dabbles in Annuities
There are lead companies that do many things and dabble in annuities on the side. That’s not who I’d choose.
I’d look for a company that specializes in annuity leads only, whether that’s us or somebody else. A company that focuses on one thing is typically going to be a much better provider than one that tries to do everything.
The question to ask: Do you only create annuity leads, or is this one of many things you sell?
Mistake #7: Prepaying or Locking Into a Long Contract
A lot of lead programs now want agents to prepay for a block of leads, or to commit to three to six months of spending up front.
I think that’s nonsense. If a company had real confidence in its program, it wouldn’t need to do that.
We’ve never had a long-term contract. Our clients have always been billed weekly, after we send the leads. That means an agent can receive two or three leads from us before they’ve paid for any of them. There are other companies that charge per lead, but they charge the credit card on file in advance, before they send each lead. I don’t know of any other company that bills the way we do. We do it because I have confidence in what we do. If I didn’t, I’d want to lock people into three to six months too.
The question to ask: Do I have to prepay or sign a contract? When exactly am I billed?
Mistake #8: Being the Guinea Pig for a Startup
I don’t think it’s a good idea to work with lead companies that are brand new. Why would you want to be the guinea pig for their program or their ideas?
Building a lead program that works takes years of testing, mistakes, and adjustments. I know, because I made a lot of those mistakes myself. Let someone else pay for a new company’s learning curve.
When you’re looking at any company, pay attention to how they treat you before you buy. One of my favorite sayings is that how a person does one thing is how they do everything. If a company half-asses its website, half-asses its communication, and half-asses its follow-up with you, what makes you think whatever else they’re doing is going to be any good?
Do they get back to you promptly? Do they act professional? Do they seem like they’ve been doing this for a while? How thorough a company is in how it deals with you is a good sign of whether you should trust it.
The question to ask: How long have you been creating annuity leads, and how long have your clients stayed with you?
Mistake #9: Testing Too Fast or With Too Few Leads
When you test a new annuity lead company, be prepared to test 12 to 20 leads over a period of time, maybe three or four months.
A lot of agents want to test things quickly and blow their whole budget in a couple of weeks. That doesn’t give you a real test. There are stretches that are unusually good and stretches that are unusually bad, for both the number of leads and their quality, because lead quality moves with everything else going on in the world. If the stock market drops 15% tomorrow, trust me, annuity leads will be easier to close that week than if nothing happened. If you spend your entire test budget during a bad two weeks, you’ll walk away with the wrong answer.
Choose a company that lets you work at a pace you’re comfortable with, and commit to trying it for a while. If someone wanted to try our program with 15 leads, I’d tell them to spread those over two to three months. You won’t get a pile of leads at once, you’ll be able to work each one properly, and you’ll get a more accurate test. I think it also improves the odds of a good experience at the start.
The question to ask: Can I set my own pace, so I can spread my first 12 to 20 leads over a few months?
Is it the leads, or is it you?
Say you work 15 leads and nothing closes. How do you know whether the problem is the leads or how you worked them?
Look at the whole process like an assembly line in a factory, and find where it’s getting stuck. How many of the leads did you actually talk to? How many did you meet with in person? How many proposals did you make? What was your close rate on those proposals?
The numbers will show you the weak link. Then change your follow-up process to fix that link. (We’ve written a full guide on this: Working Our Annuity Leads.)
Mistake #10: Believing “John D.” Testimonials and Marketing Hype
A lot of what lead companies put out is, for lack of a better word, full of it. It’s major marketing hype.
The testimonials always crack me up. “I made a hundred grand in 30 days with your program. It changed my life. — John D.” That’s all a bunch of BS. It’s not verifiable, and it doesn’t make me trust anybody.
When we put up our testimonials, we added real names, real cities, audio recordings, and the actual letters, so people can see they’re real. That’s what you should look for. Ask yourself whether a company’s testimonials look authentic and real to you. If they don’t, they probably aren’t.
The question to ask: Are these testimonials from real people I can identify, with full names and cities? Is there a recording or a letter behind them?
Mistake #11: Ignoring How Many Agents Share Your Territory
Even when every lead goes to only one agent, it matters how many other agents a company has in your area.
There’s a limit to how many leads a company can create in one market. Say a company can produce 12 leads a month in your area. If it signs up five agents there, nobody gets enough leads to move the needle. Every new agent dilutes the lead flow for everyone else.
We try to keep only a few agents in each market. In smaller rural areas, we keep even fewer. In big cities like Chicago, New York, or Dallas, we can take on more agents, because we know we can create more leads there. Some companies protect territories completely, with one agent per area. We’ve never done that, but we do limit each market to a few people, based on how many leads we can create there.
Ask any company to estimate how many leads you can expect in your area. They should be able to tell you. And be realistic about your territory, because it directly affects how many leads you’ll get. To produce decent lead flow, we typically need to reach two to five million people with our advertising. If you want 10 leads a month, you usually need several million people in your territory.
For what it’s worth, we’ve always been in the middle on volume, the same way we’ve been in the middle on price. We’re not the smallest, and we’re usually not the biggest.
The question to ask: How many agents do you already have in my area, and how many leads can you realistically create here each month?
Mistake #12: Seeing an Easy Refund Policy as a Plus
This one surprises people. A lead company that’s very flexible about refunds typically has a low-quality program.
Think about it. If a company’s leads are garbage, of course it can replace them with more garbage, because garbage doesn’t cost much to replace. Most of the serious companies, including ours and our main competitors, don’t hand out refunds freely, because there are real, serious costs behind every lead. In many markets now, our media cost alone is more than $300 per lead, which is more than we charge for it. So a refund isn’t a small thing for us.
So ask any company what qualifies for a refund, how long you have to ask, and what percentage of its leads get refunded.
Here’s how we handle it. Leads that turn out to be insurance agents or financial advisors qualify, and so do disconnected phone numbers. Clients have seven days to ask. Refund requests have been under 1% of our leads every month for at least five years.
Beyond that, I’m in this business for the long term, and we care about long relationships with our clients. If an agent has bought 25 leads from us and asks for a refund on one, we’ll normally just give it to them. The process isn’t perfect, and there may really be something wrong with that lead. We’re not going to let one refund ruin a good relationship. That would be silly.
But when someone brand new asks for a refund on their first, second, or third lead, we take it very seriously. In our experience, that usually means the agent is struggling or the program isn’t the right fit, and we handle it differently. After working with 3,000 clients, I can tell you that our good clients showed us clues they’d be good clients at the very beginning. And our bad clients showed us clues they’d be bad clients at the beginning, too. We pay attention to those signs.
The question to ask: What qualifies for a refund or credit, how long do I have to request it, and what percentage of your leads get refunded?
How I’d Shop for Leads If I Were You
People sometimes ask what I’d do if I were an independent advisor shopping for annuity leads tomorrow. What questions would I ask?
Honestly, I wouldn’t ask anything at first. I’d go through everything each company puts out. I’d watch their videos, go through their website, and read everything that’s available. Then I’d see which companies I trust.
Trust what a company publishes more than what its salespeople say, especially if what they say sounds like hype.
“Trust what a company publishes more than what its salespeople say.”
Most of the annuity advertising I see today is misleading. Not all of it, but most of it. It takes things that look good to create the lead, and there’s no substance behind them. Eventually people figure that out.
The one thing I refuse to do in our advertising, even if it would get us more leads, is lie to people to create the lead. I won’t exaggerate, and I won’t mislead them. Because you can fool someone into becoming a lead, but you can’t fool them into buying nearly as easily. And you shouldn’t try.
“You can fool someone into becoming a lead, but you can’t fool them into buying nearly as easily. And you shouldn’t try.”
Scott Brooks, MBA, CFP®, is the founder of TheAnnuityLeads.com, which has created leads for insurance agents and financial advisors since 2010.
