Why Life Insurance has to be sold

By Jim Ruta | September 22 2014 11:53AM
Why do they say life insurance has to be sold?

Nothing is harder to sell than life insurance and few things are more important and valuable to a family. It’s an intensely personal purchase that bares the buyer’s soul. It’s not even easy to think about.That’s why there are no better sales people than those who sell life insurance either. What is more challenging than convincing people to spend their hard-earned, after-tax dollars on something for someone else that they can only buy when they don’t need it; will never see themselves and only appears after they are dead? No one lines up for that deal so life insurance has to be sold. Here are seven of the reasons why people need dedicated life insurance agents to help them buy what they need:

  1. No one likes to talk about their own death. They also are not excited about sharing their deepest thoughts about love, family, dreams, business and families with stranger agents.
  2. There’s a popular myth that if you have money, you don’t need life insurance. Ever heard this one? “By the time I’m in my sixties, I’ll have so much money I won’t need life insurance.” It’s a lie we tell ourselves in our forties that keeps us from buying.
  3. Time is surprisingly “of the essence” when buying life insurance. Most consumers think they have to be dead not to be able to buy life insurance. Few realize they are only one second, one heartbeat or one ominous word from a doctor from the end of their insurance buying days. Insurability is remarkably fragile. Once lost, it is rarely regained.
  4. Life insurance is one of the few products you must buy when you don’t need it. When you need it because you are ill, no one will sell it to you.
  5. Buying life insurance is a multi-decision purchase. You have to agree to: provide fact finding, paperwork, medicals, underwriting questioning and premiums. Multiple decision points mean there are too many escape hatches for buyers to buy on their own.
  6. Life insurance is a character product. If you have some, you buy some. Buying life insurance is a character-check most people won’t do on their own and a key reason good life agents have a special sales talent.
  7. Life insurance has superstition going against it. Many people believe that the very mention of death somehow hastens its appearance. Many consumers cannot overcome this superstition alone.

Selling life insurance is not like selling anything else. It takes a professional life insurance agent to help people buy life insurance properly because the motivation for ownership is like for no other property. It takes character to buy. It takes double that character to sell it. Character, commitment and compassion – that’s why good life insurance sales people are the very best sales people in the world.

Are there any “oldies but goodies” in the life insurance business?

It’s a mistake to think that all traditional selling ideas are obsolete. Some of the simplest old ideas are more important than ever. Here are some old ideas that you ignore at your peril and include to your advantage:

Pre-Approach Letters are more than just a formal indication of your interest to connect with a good prospect. Today, they can help induce prospects to connect with you first and minimize contact restrictions. Prospects can check you out online and improve your connection. Because we get so little mail today, your formal but pleasant note stands out more than ever. In a digital world, a classy letter on good paper shows you are a professional with honourable intentions. Direct Mail is similar but for a mass approach. A properly designed and executed direct mail program working with your online presence can be very successful. Post cards can get quick attention and direct readers to more online information. Well-written notes, in the marketers’ secret weapon – the canary yellow number 10 envelope – makes the connection. But, direct mail is a numbers game where it takes thousands, not dozens, of pieces to make a difference. It still takes 3 to 5 mailings before you expect that someone has read it. Frequency is everything. Repetition is required. Patience is necessary.

Hand Written Notes still reach people’s hearts like little else. I know that the “etiquette queens” are saying that email is acceptable for much of what mail did, but who wants to be “acceptable”? We want to be elegant and memorable. That’s where a handwritten note on good note paper to thank or congratulate someone shines. Thank people for: setting up or having a meeting, providing a referral, buying and taking the time to meet even if they don’t buy. Congratulate them for birthdays, anniversaries and promotions. Nothing is better than a personal note of sympathy when appropriate.

Policy Wallets are another lost art that haven’t lost their power. They used to be one of the few ways agents showed their appreciation for business. Policy wallets were practical gifts that helped organize clients. That need has not gone away. It solidifies your professional image and helps mitigate buyer’s remorse by building your relationship. “Policy Wallets” can be anything from vinyl folders to leather binders and wooden boxes to fire-resistant personal safes. They all show you care. That attracts referrals.

Cold Calling still works. In fact, restricted contact legislation have virtually “bombed” us back to the mail and cold call age. Dropping in, unannounced with a smile and a handshake may be the best ways of meeting new prospects that no one uses. There are firms that use this strategy very successfully in Canada and the US so don’t be so quick to dismiss the idea. The idea of “just dropping by to meet my neighbours in the area” is not as far-fetched as you might think. It can be particularly good in the business market but also works right in your own neighbourhood. We tell clients not to keep us a secret. Maybe it’s time to spread the word ourselves?

Old sales ideas can differentiate you and drive your business at the same time. Keep an open mind and make old ideas work for you.