‘Selling’ Insurance Still Critical

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Does life insurance still need to be 'sold', not 'bought'?
  • Yes (90%)
  • No (8%)
  • Not sure (3%)

Advisers agree with the contention that life insurance remains a concept that must continue to be sold to consumers.

85% of respondents to our latest poll have affirmed their belief that life insurance still needs to be sold, not bought.  11% disagree, and the balance remain undecided.

While both the question and its result appear to be simple and ‘clear-cut’, the changing nature of consumer society, and of how information is delivered to consumers, remain trends that may challenge some advisers.  One comment we received offered a broader perspective to this debate, through its interpretation of the Swiss Re survey results (and the adviser responses) that inspired this poll:

… the “sold not bought” approach is the ideal one, but it’s not what the underinsured majority actually want

“Ultimately the “sold not bought” approach is the ideal one, but it’s not what the underinsured majority actually want. I think the point of the Swiss Re article was to suggest the industry adapt a little more to real world behaviour in order to be more effective. This doesn’t necessarily mean removing the role of us advisers.”

Following the logic of this argument, the message would seem to be that while the intangible concept of insurance must continue to be ‘sold’, advisers (and the rest of the industry) should also take stock of the world that is literally changing around them, in areas highlighted by Swiss Re, which include: simplified and innovative products, improved customer communication and education, better distribution options and enhanced long-term relationships.

Our own interpretation is that the areas highlighted by Swiss Re are not necessarily mutually exclusive to the notion that life insurance should continue to be sold.

But what is your view?  Our poll remains open for you to vote, and to make your voice heard…



7 COMMENTS

  1. I know that after nearly 26 years in this industry technology is leaving me behind. And yes people in ‘head offices’ can come up with some amazing stats and figures after torturing numbers to tell them want they want. I think we are splitting hairs with the words ‘brought and sold’ As I mentioned after 26 years of discussing the merits of protecting people and their loved ones, clients still need to be convinced about the merits of paying for a promissory note (insurance policy) No one has ever approached me or through an appointment instigated by myself known the correct sums insured and blend of products. On many occasions ‘convincing’ them was the key to appropriate coverage.
    I am always glad to have done the ‘convincing’ when I receive that phone call we all dread. “I am covered aren’t I? “
    To labour the point I’m so glad to be nearing the end of my time in an industry that’s been abused and misunderstood. The powers to be have made it so complex and expensive to look after the individuals and families out there. No wonder people have been driven to search out coverage which as mentioned in other articles is often unsatisfactory.

  2. Paraphrasing Zig Ziglar ‘unless your customer understands that the cost of not doing business with is more than purchasing your product’, you will not make a sale. Yes, I suppose I could just have a chat with prospective customers, show them a range of products and then ask them to select their preference, or I could show them the chance of losing their home if they are diagnosed with cancer and then show them a product that will cover that contingency. Yes, its manipulative, yes its selling, but its a win-win for all parties. I believe that around 14% of those with a mortgage have trauma insurance, while I’m close to 100% with my clients. Is this because my clients possess a super intellect or because I have educated them and ‘sold’ them a product? Yes, it’s easier if your clients have a little bit of grey matter, but is suspect that their peers without an insurance adviser are way under insured, when compared to those that do.

  3. I was in the UK in 2004 and at the supermarket checkout, I was asked if I would like Life Insurance. I went to the post office and there were forms to buy Life Insurance.
    The direct market is here with a vengence and will not go away.
    The UK Government stuffed up by not understanding how people buy Life Insurance.
    Our Government needs to learn from the UK DISASTER and put measures in place that clearly allows people to understand the difference in the quality of direct Insurance and retail advised life products, so it allows everyone the chance to be covered, knowing what they are ACTUALLY covered for.
    People will always look for cheaper options and if they do not know the difference in the policy definitions and benefits, they will cancel their retail policies and take up the rubbish being touted by every man and his dog nowadays.

  4. A quick extra point

    Swiss Re tells its clients ( the insurers ) that they should develop ” simplified and innovative ” products

    Theres a dead rat in that carefully chosen management speak, and we ignore it at our peril.

    When politicians use the word ” flexible” , be very very careful and aware, because its code for someone, somewhere, taking a hit.

    ” Simplified and innovative ” has the same pong. What could me more simplified than a term life death policy-from ALL CAUSES, like we all sell. Oh, I know, a life policy that is only covering Accidental Death for the first five years.

    Good advisers know its a pain for all when your client goes from Total Disability to ongoing Partial Disability. Hang on, can’t we “simplify” that by deleting Partial Disability from the benefits, just like ALL the current direct selling IP offerings, some even designed by some of our insurer “friends”

    IP & trauma contracts are by definition complex legal documents, and they must always be so, otherwise no one could afford the cover. Skilled advisers can accurately explain those complex contracts, but order-takers dont care to bother, particularly if the churn is in ( ” same as your current one sir, only cheaper ” )

    Re-insurers would love all those direct-marketed dynamite policies to become the norm. Loads of profit, no expensive underwriting, hardly ever pay a claim

  5. I love the first comment up there – by ‘Stephen’. It resonates with me and not just because I’ve been in the game for 26 years too. This is the part I would encourage the life company execs reading this to read it again and again (& learn from it) as I’ve never seen a truer word written: Stephen wrote:-
    “To labour the point I’m so glad to be nearing the end of my time in an industry that’s been abused and misunderstood. The powers to be have made it so complex and expensive to look after the individuals and families out there.”
    Good to know I’m not alone in my thinking . . .

  6. Amendment to my comment above: I should have weighted ‘politicians’ above life company execs regarding messing with the industry to a damaging extent. I do feel, however, that the life companies could have (and still should) carry a bigger hammer in terms of lobbying. Another bugbear of life groups is this: where is the TV advertising for insurance??? We’ve seen recently sales of the Ford Falcon so low that it has caused Ford to stop manufacturing here. They let the falcon whither on the vine without water (they STOPPED DEAD any advertising effort to sell the car years ago). If they have to reduce commissions a little to afford the TV advertising then do it. The industry super adverts a few years ago were not met with ANY defensive measures on TV – inexcusable. Do the life groups want personal super/insurance to go the way of the Ford falcon? Looks like it!

  7. Yes Brian, Stephen is correct. I’m also nearing the point of leaving this “industry” after 25 odd years. I have tried to act honestly and professionally for all that time but it doesn’t matter, we are all branded with the same churning brush. We can be fined, sued, jailed and probably hung drawn and quartered to put it metaphorically. I just think now in this brave new world of FOFA etc. it’s not worth the effort. We are being hammered by the big banks, big super funds and the on line predators. Sorry folks but good luck, I’m outta here very soon.

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