- Yes (90%)
- No (8%)
- Not sure (3%)
Our latest poll asks you to consider whether the emergence of a new consumer world means that life insurance should remain a service that needs to be ‘sold’.
Inspiration for this poll stems from the reaction we received to last week’s article that reported recent findings published by Swiss Re, in which the reinsurance firm revealed that consumers no longer want to be ‘sold to’ (see: Insurance Industry Should Rethink ‘Sold, Not ‘Bought’). Rather, the research found that empowering consumers to make their own informed decisions will be the key to success for the life insurance industry in the future.
On the surface, the answer to this question, particularly for current and former risk-focused advisers, would probably be a resounding ‘yes’. That is, life insurance must still be sold. The argument, advanced by a number of advisers following last week’s story, is that life insurance remains an intangible product that is still not pro-actively ‘shopped’ by the modern consumer, even though they can now conduct detailed online due diligence for more tangible products and services.
The other side of the argument, advanced in Swiss Re’s report, is that improved customer engagement and insurance buying patterns will best be served in future by simplified and innovative products, improved customer communication and education, better distribution options and enhanced long-term relationships.
But is there an actual ‘correct’ answer to this poll question? Perhaps we’re just playing with words. If an adviser today ’empowers’ their client to make their own informed decision by furnishing them with the information they need, within a context appropriate to their personal circumstances, isn’t that still ‘selling’?
What is not under debate is that the entire world remains largely underinsured when it comes to life insurance, irrespective of whether this intangible service is ‘sold’ or ‘bought’. And, while many good people have searched for and advocated answers to underinsurance, not much progress seems to have been made. Is this because of what some may see as an out-moded mentality or approach towards the ‘selling’ of insurance? Or do the answers lie elsewhere?
In the meantime, let us know your own perspective on the question of whether life insurance is a product/service that still needs to be ‘sold’, rather than ‘bought’…
I note that the original Swiss Re article focused on what consumers “want” and “do”, whereas the barrage of subsequent criticism has focused on what consumers “need” and “should do”. 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.
If income protection was not SOLD, then every client would have a 2 year benefit period.
After all, a non-advised client will still argue even today that they will “be dead” if still off work after 2 years, don’t they!
I fancy insurers would secretly love limited benefit periods- short claims, lotsa profit, no long tail.
Decades ago, IP was mostly sold on a 2/5 year BP, and only professionals could get Age 65 BP, and even that long BP occasionly had a 2 year Own Occupation limitation,
The increase in BP to Age 65 in the 1990s for even blue collar types was driven by advisers. Funnily enough, it was during that period that saw the growth in the number of Non Tied advisers, and the introduction of innovative smaller life risk companies, who pressured the “big three” tied offices to follow, probably with resistence from re-insurers.
And it was tough to sell the more expensive Age 65 BP, and it was easy to suggest a short BP.
Life Insurance is an intangible product. It has to be sold and always will. In any case, nothing “sells itself”. Some things are sold brilliantly such as Steve Jobs with his “1000 songs in your pocket” line to sell the ipod but unless a product is presented and sold, nothing happens. Even the vacuum cleaner had to be sold door to door by pushy salesmen before it became an essential household item.
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