Selling Life Insurance and
Related Financial Services
What’s
So Difficult About Selling Life Insurance?
Article 1 of 7
By John Lensi, CLU, ChFC, RHU, REBC, CMFC, LLIF
Vice President, Sales,
Impact Technologies Group.
Most experienced financial professionals would agree selling 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 selling
life insurance,
let me get to the heart of the matter.
Notice
I said 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 selling 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 metamorphous 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.
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 and 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.
John
next article in this series will discuss......
Examining
the core skills
needed to become successful when marketing and selling life
insurance.
John
Lensi, Vice
President, Sales
Impact Technologies Group.
CLU, ChFC, RHU, REBC, CMFC,
LLIF - Charlotte,
North Carolina
John has
over 30 years of field management & home office executive
experience in the life insurance and financial
services
industry across several distribution channels.
He has been a company
officer for several prominent life insurance companies during
his
career. Along with his professional designations/education,
he is a
marketing and business administration graduate of Central
Connecticut
State University – New Britain, CT. Lensi was selected to the
International Who’s Who of Professionals in 1995 and has
served as
industry chairperson for LIMRA International’s
Agent & Management Training & Development
Committee.
He
has a built a number of professional development platforms for
insurance professionals which has led to the development of
numerous
MDRT qualifiers. John has been a speaker at numerous industry
and
company sales meetings on the topic addressed in this paper.
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