Insurance Is Always Sold
I was introduced into the insurance industry by my stepfather a 50-year insurance industry icon. Larry was a guy who was brought up in the Ben Feldman days, a guy who would carry a $100 bill so that when people asked him what he did he could say I sell these for $1. One of the sayings that Larry also let me in on was that insurance was always sold never bought.
This saying bothered me, you see I came into this industry as a consumer first. The idea that consumers had to be sold something makes it seem like snake oil or that his clients were under duress. After all, if the other saying Larry had let me know was true that life insurance would fund a liability at a lower cost people should be lining up to buy insurance with liabilities at an all-time high.
On the other end of the spectrum, people spend lots of time rate shopping their car insurance, home insurance, people buy insurance for their cell phones and TV's so why would they not buy Life insurance in the same way? I suppose to truly understand why the saying exists we must first explore why insurance is not bought.
Why is insurance not bought
- Insurance Is confusing
- Insurance makes me face my fear of death
- I'm a procrastinator
- I don't know how much I need
Let's be honest there are a lot of types of insurance out there, there are a lot of companies offering similar products and there is an extremely diverse workforce of advisors who sell insurance (often with very different opinions on the best approach to planning). All of these options can create a fear from consumers they will pick the wrong option and as a result, don't do anything at all.
To solve any kind of confusion we need to counter with education. Now it's easy to educate your customers if they actively seek out your product but if you believe that insurance is sold, how are you going to educate your clients? One way to get clients to engage is to keep them in control of the process:
-Let them populate the information for their needs analysis
It's been shown that producers who use a needs analysis have been able to consistently achieve higher sales results, have more suitable coverage for their clients and have a more robust compliance backup. Think about sharing your needs analysis and letting your client fill it in so the numbers have more validity. The LDA needs analysis includes tooltips with the Canadian average's so regular people know what kind of cost they can expect for some of the big-ticket items such as creating an education fund or final expenses.
-Prepare an easy to understand presentation
A successful presentation captures your client's attention. Think about including three solutions that contain the best of breed from their respective product class (eg. T10 vs T20 vs T30) This takes away the fear of picking the wrong options and leverages the MESO/Decoy Effect.
-Actively Review Inforce Policies
Educate clients on what the future holds by performing a policy review. Include options for new product as well as conversion options. Our report leverages colour and dynamic visuals to easily communicate the message. Do you want to be the red line or the green one?
A lot of people don't talk about life insurance with family or friends. It can be for a variety of reasons ranging from fear of death to the polar opposite, "I'm way to healthy/young/beautiful for anything to ever happen to me." The fact of the matter is that as soon as you have a liability you should be considering funding that liability with insurance.
We all know the saying "if you had a machine in the garage that printed money would you ensure it from breaking or loss?" but we don't often see our own value. Combine that with the fact that people consistently overestimate the cost of insurance. Means we need insurance brokers to sell the need that customers just arent wanting to face.
Want to flip the tables on this, find interesting and fun ways to highlight the need and reason to face this awkward conversation head on. Think about sharing a funny cartoon (like Dilbert above) Share it on Fridays and use your platform to educate in a light way.
My Stepfather used to have this story of meeting people for the first time, when they would ask the enevitable, "what is it you do for a living?" and he would say "I sell life insurnace" often getting the.... "OH.." He would shoot right back and say "whats the OH for?" Have you ever felt the stigma that can be associated with selling life insurance?
It might not be fair but it can be a hidden objection you may need to overcome. Cultivating a professional image and being transparent about your product can go a long way here. This is where branding and image can reduce your Ned factor at least 40%
The only way to motivate a procrastinator is to appeal to their wallet. Show them the cost of waiting, if that doesn't work show some options for products with more forgiving underwriting limits or instant issue. If appealing to their wallet does not work a lot of studies are showing that today people pick convenience over price. Highlight the different underwriting requirements to your procrastinator. Give them the option to skip the medical even if it means paying more.
This is an easy solve, use our needs analysis! It's interactive, it can be shared with a client to have them fill it out, it can be sent as a text so they can fill it out on their phone (psst 99% of texts are read vs roughly just half of all emails!) Even better we have a business needs analysis that can document that you covered Key person and other aspects of business succession.
Why insurance is bought
Ok so there is some merit to the fact that insurance is sold, but I still dislike the saying because it totally ignores a few facts. Let's look at some evidence that shows insurance is bought and not just sold!
- Direct to consumer
- Limra Stats
- Online Quote and Needs Analysis Tools
If insurance is always sold and never bought why does direct to consumer exists. Many insurance companies have started to sell direct to consumers skipping the middle man (the advisor) and often charging more to the client. In addition to that, there are several direct to consumer startups that come to mind that want to offer the choice of an independent advisor but let the consumer research and transact online. If insurance is always sold and never bought do you believe these companies are doomed?
I'm very bullish on advisors, I have built my business to support them and give them tools to keep the robo advisors at bay, however, we can't get too comfortable. There is a big lesson to be learned from the direct to consumer model. Make something Easy, Transparent and Convenient and you will win the customer.
If insurance is always sold and never bought why does Limra report that 85% of insurance purchases use the internet in some way. That could be researching pricing, it could be consumers "educating" themselves on the insurance landscape. It could be looking at funny Dilbert cartoons whatever the trigger that is a lot of people going online to start the transaction. In fact, it's such a large percentage it most certainly challenges the notion that insurance is only sold. It proves that people are researching, comparing and some even buying direct. It proves that insurance does not have to be sold, but it also goes to show we need to create the education and vehicle to capture the attention of these buyers who do go online and make our process transparent and easy so they can buy insurance rather than being sold it.
Online quote and needs analysis tools to prove consumers are begging to know if they have enough coverage, the most affordable coverage and the right kind of coverage. However, they are asking Google for the answers and Google is looking to match them up with the best content or the vehicle that will get them to purchase the fastest. So if you're not there for Google, Google won't be there for you. While you may not be a content specialist you can still target this audience. Some ideas might be creating a retargeting ad strategy, If you have a nitch utilize Google AdWords and create a bid strategy so that when people search for the type of work you provide, your information shows up welcoming them to get in touch for a review of their options. If you're equipped with tools like LDA you can present to your clients in a way that will be sure to capture their attention and close more sales.
How do we change the narative
I think it's safe to say some insurance is sold and some insurance is bought. I also believe it's important to change this narrative if we want the service you create to be valued rather than commoditized. How we engineer our sales pipeline depends on our ability to be nurture customers through our (currently) clunky sales process. We need to educate clients more than ever and we need a way to reach our audience in an increasingly digital world. If we can do this we ensure we will appeal to clients who need to be sold and we will capture the ones who are begging to buy!
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