Agents fall into two categories. They are either life insurance salespeople who peddle a product or life insurance advisors who care for clients. Here’s why you should strive to be the latter.
So you know, I’ve never sold life insurance and I don’t presume to walk in producers’ shoes. However, I am no stranger to the insurance business, having worked with insurance organizations as a marketing and sales consultant for more than 30 years.
My interest in life insurance is personal — it made a difference in my life. For that I am grateful. It’s also why I’ve been known to needle agents a bit by saying, “I hope you believe in life insurance as much as I do.” Because of what it takes to close a life insurance sale, I’m sure most do.
Even so, there are issues worth discussing since life policy sales declined between 1989 and 2013. There was a “steep drop in cash value policies” and term policies to a somewhat lesser degree, according to the Federal Reserve Bank of Chicago.
There are reasons this occurred: a jump in life expectancy made life insurance less appealing. In addition, competition from other investments that held more appeal for consumers, including mutual funds, along with pension and retirement plans. And, of course, there was Social Security. To avoid these reasons from becoming excuses for a decline in life sales, several issues are worth considering:
- The life insurance sales problem
Upfront, what prospects see is a salesperson, not someone who wants to help. They picture someone whose job is to talk them into buying something they don’t understand, don’t want or, worse yet, who reminds them they’re going to die and uses it as leverage to make a sale.
An agent explains why a prospect should have $1 million in whole life insurance, but “I can’t afford it,” he says. The agent keeps talking until the prospect settles on a $500,000 term policy just to get it over with. Three years later, something comes up and the policy is dropped. At no time over the three years, did the client hear from the agent.
You can say things have changed — and they have. But perhaps not as much as they should. For example, one of the leaders of last year’s Life Insurance Awareness Month (it was September, by the way) indicated that it would help if the industry had an advertising campaign focusing on the risk of death.
This may have been a compelling argument when the breadwinner was a male with a life expectancy of 54 to 60 years of age, but not necessarily today when it’s pushing 80. While life insurance carriers recognize the problem, what about agents? Do they continue to emphasize the death benefit in their sales presentations? Of course, the death benefit has enormous value, but it seems that agents are stuck in a mindset that dominated life sales throughout the last century when life expectancy was dramatically lower than it is today.
Owning life insurance was once a status symbol, a clear indication of taking personal responsibility for one’s family. Millions of consumers sacrificed to pay for it so the mortgage could be paid off, funeral expenses covered, and something left over for the “loved ones.”
This approach to marketing life insurance has lost its luster because it’s lost its meaning for consumers.
- Stop trying to sell life insurance
“Life insurance isn’t bought, it’s sold.” These words form the core belief of countless life insurance producers. They’re a mantra and a mindset, a mountain they must climb if they are to make a sale. It’s almost as if the customer is the enemy agents must subdue. It also explains why consumers run when a life agent calls or comes within 10 feet of them. They know ol’ Ned Ryerson will try to sell them a policy.
Even though there are doubters, it’s time to get rid of the selling mindset and start motivating prospects to buy life insurance. It’s not naïve; it can be done. A good example is the iPhone. We didn’t know we wanted one until Apple’s Steve Jobs showed us what we could with it. You may not agree that life insurance has much in common with the iPhone, but has all the versatility of my favorite Swiss Army Knife. Along with the death benefit, there are plenty of other living benefits ranging from cash accumulation and tax advantages to riders that personalize coverage, such as a long-term care rider.
This is exciting stuff! However, many producers appear to lack interest in taking time or making the effort to show prospects how life insurance can change their lives for the better starting now. It may be that some agents haven’t expanded their knowledge base to include the possibilities offered by living benefits.
Many producers appear to lack interest in taking time or making the effort to show prospects how life insurance can change their lives for the better starting now
In the same way, life agents can be so focused on making the next sale, they ignore those who have bought policies. Clients hear from the insurance company in regard to paying their premiums, but get only silence from the agent who sold the policy.
As long as agents believe life insurance must be sold, they will continue facing strong consumer resistance that borders on rejection.
- Give consumers the help they want
What must happen isn’t complicated, particularly when 83% of Americans feel “they would consider life insurance more intently if it was easier to understand,” according to LIMRA’s 2017 Insurance Barometer Study.
If anything, this sounds like a plea for help. And help is needed, as the study points out:
- Consumers are not familiar with the price of life insurance. Millennials overestimate its cost by three or four times.
- Even if they own life insurance, they are clueless as to adequate coverage.
- Only 59% have life insurance.
- Half of all Millennials reported no one has asked them about purchasing life insurance; 4 in 10 believe they wouldn’t qualify.
Consumers can be put-off by a “bad experience” with an agent or what they’ve heard from friends, relatives, and co-workers. So, don’t expect them to believe you just because you say, “I’m different.” Because trust takes more than the word “Advisor” on a business card, here are a couple of thoughts about what to do:
- Take time to understand prospects
Start by asking about what they know about life insurance and how they view it. Tell them there is no such thing as a stupid question. Above all else, they need an opportunity to discuss, digest, and think about what they learn from you.
Rather than feeling pushed into making a buying decision or getting defensive and saying no, let them come to understand and appreciate what a personalized life insurance plan can do for them now, as well as leaving a thoughtful legacy.
It’s an asset that can meet changing needs throughout their lives, everything from loans to long-term-care protection and money to complement retirement funds.
- Let them know you’ll stay with them—and then do it
It’s not unusual for life insurance agents to “disappear” after making sales. While this may be understandable based on how they’re compensated, it’s not acceptable.
It’s fair to say that no other salespeople can benefit more from staying in contact with their customers than life insurance agents.
It allows them to deepen relationships, uncover new opportunities, and gain referrals. Simply put, staying close sends the message that you care, something that words cannot convey.
Life insurance policies don’t thrive when put away somewhere for safekeeping and forgotten. They must be cared for and nurtured throughout the owner’s life cycle. This is what gives “Life Insurance Advisor” meaning and value. It requires someone who stays in close contact with their clients, who works at building relationships, answers questions and suggests new ideas. All of which goes a long way to establishing trust.
Once again, it’s rather simple: Agents fall into two categories. They are either life insurance salespeople who peddle a product or life insurance advisors who care for clients.
John Graham of GrahamComm is a marketing and sales strategy consultant and business writer. He is the creator of “Magnet Marketing,” and publishes a free monthly eBulletin, “No Nonsense Marketing & Sales Ideas.” Contact him at firstname.lastname@example.org or johnrgraham.com.