Marketing Life Insurance

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What’s So Difficult About Selling Life Insurance?

What’s So Difficult About Selling Life Insurance?

Article # 1
Written by By John Lensi, CLU, ChFC, RHU, REBC, CMFC, LLIF
Charlotte, North Carolina

Marketing Life Insurance and financial related services? Why should it be so difficult?  Learn about the dark secrets on how the the life insurance sales process should be evaluated.

Most experienced financial professionals would agree that marketing life insurance and related financial services products is not all that difficult today… in fact most would probably admit it never has been all that difficult.

Now this does not mean the sale of life insurance and financial services products is an easy profession. Before I raise the hair of those in this business who know how difficult it really is to be successful as a professional insurance agent, who is marketing life insurance, let me get to the heart of the matter.

Notice I said marketing and selling isn’t all that difficult.

Most financial professionals are pretty darn good at this aspect of their profession and find selling product solutions to client problems very enjoyable and not all that challenging. The difficult task of marketing life insurance occurs at the front end of the sales cycle.

Before a sale is consummated, a favorable face-to-face appointment must first be arranged. Easier said than done. For it is the ability to successfully prospect for qualified clients, followed by the skill of scheduling a sufficient number of new business appointments week in and week out that separates the MDRT level producer, from those who achieve meritocracy in the life insurance sales business. Not everything has changed.

The life insurance industry has undergone a tremendous
metamorphosis during the past couple decades

Yet the one thing that has remained fairly constant is how consumers purchase life insurance. Even with the advent of lower-cost term insurance and use of the internet, life insurance is still [for the most part] a consumer product that must be sold face to face; as opposed to being a consumer demand product. Consumers in general, lack understanding and appreciation for the value of life insurance and generally do not initiate the purchase of life insurance.

If not approached by a financial professional to buy life insurance, most consumers will simply avoid the purchase. In fact, in the months following the attack on the World Trade Center in 2001, a survey of consumers by LIMRA International showed consumer receptiveness to proactively purchasing life insurance had little to no change.

Life insurance is a very unique product.

When it comes to marketing life insurance, there is no substitute product that can transfer the financial risk of an unexpected death to an insurance company and receive in return a guaranteed financial payment to a loved one at an insured’s death. It’s been long said that life insurance is not for those for die, but for those who go on living. This being said, one might ask themselves why there seems to be a resistance to buying life insurance?

Why people hesitate buying.

There are a number of reasons people don’t initiate the purchase of life insurance. Much can be attributed to the avoidance of people wanting to think of the reality of premature death and the possibility of this occurring to them or a member of their family.

For others, avoidance to buying life insurance is associated with their lack of understanding of how a life insurance contract ‘works’ and how much protection they need and what it costs.

Closely associated with these reasons is the consumer fear of making a “mistake” in buying the wrong type of policy, or a policy in their
mind, simply wasn’t needed.

The life insurance sales process is centered on
an in-depth financial  fact gathering process 

This fact finding process must precede any recommendation for a specific purchase of life insurance.

Stemming from this fact-finding process is yet another aspect for consumer’s failure to purchase sufficient life insurance to meet their financial protection needs. Many consumers are fearful of being recognized – exposed if you will – as being financially “irresponsible” for not having sufficient life insurance protection and for not having achieved overall personal or business “financial success” during this fact-gathering process.

As a result, many consumers fall into another group that avoids purchasing life insurance simply because they have to open their financial ‘picture’ to someone they don’t know all that well.

Why is there this natural resistance to buying life insurance?

In addition to the aforementioned, there are two other significant reasons in my opinion.

First, resistance which is an outcome of our country’s educational system relative to insurance.

second, the industry’s long-term failure to create and sustain a unified positive ‘culture’ for its unique financial product offering.

Let’s first examine the educational system here in the United States relative to educating young adults on the value of insurance.

Simply said, one would be hard pressed to find a high school devoting more than a glancing blow to the understanding and value of owning life insurance as a cornerstone of financial security protection.

Even for the roughly 25% of our population that moves forward and graduates college, the gap in insurance education continues to exist.

As a result of any formal insurance or risk management education, the majority of adults are left to fend for themselves about learning and developing an understanding and appreciation for the unique financial product life insurance is. Understanding and receptiveness to buying life insurance for most consumers is a result of informal discussions with friends and family.

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