Buying Life Insurance Needs to Be Easier
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If Steve Jobs had asked people what they wanted from a cell phone, they would have told him, “Just make sure my calls don’t drop.” No one would have asked for apps, built-in GPS, high def video, a camera, access to bank accounts, or access to the web. Yet, today most people find their smartphones to be an indispensable part of their lives and use them for just about everything — and on occasion for phone calls. Smartphones are tremendously powerful having more computing power than the computers that landed men on the moon, but it’s also really easy to use. The same is true of life insurance — people don’t understand what life insurance can do for them, but it’s there when they need it.
As an industry, I think we are falling behind in providing our clients with a customer experience that is informative and useful, which raises the risk of disruption. There are several things we can do to help consumers understand the value of permanent life insurance.
1. Speak to the Living Benefits of Life insurance
The industry talks about insurance in a way that does not resonate with many people. Before we even get the conversation started, we may scare them off by focusing on death and dying. Who wants to talk about that? We can’t ignore the death benefit, but the simple fact is life insurance has tangible value and versatility such as paying for college, medical expenses and creating retirement income. This resonates with people.
2. Simplify the Jargon
Life insurance can be complicated and using terms such as IUL, joint or survivorship, cash value, no-lapse, and illustrations don’t help build comfort. We overload people with information and unfamiliar terminology, all centered around a topic they’re not really comfortable discussing in the first place. Using language and terms that people understand is an easy way to connect and engage consumers in the right way.
3. Create Omni-Channel Experiences
Millennials do a lot of up-front online research to educate themselves and our research shows they are very willing to speak to a financial professional. However, many of them will go online to confirm what they’re told and will seek out their peers for recommendations before making a decision. It’s important that insurers provide options for customers to engage with them when and where they want.
4. Beware of Robo-advisors
Robo-advisors are growing, which are predicated on the idea that you can ask a few simple questions and then get pointed to the right solution, but is that necessarily the best solution for the client? The right insurance product is based on asking the right questions to understand the specific needs of a client. Robo-advisors do not take into consideration the questions a financial professional can – such as tax implications, special family circumstances, etc. A robo-advisor might provide the right answer for the wrong question and it’s the questions you don’t ask that lead to poor decisions.
To me, our job is not selling life insurance as much as it is to educate people about good financial health in which insurance is an invaluable component. We do put customers first and work to find the right solution for their specific needs and we need to make understanding the value of life insurance as easy as using an iPhone. We could have a savings crisis in America that will lead to many people not being able to live securely or independently in retirement. Life insurance should be a part of a solution, but it can’t be if people find it difficult or confusing.
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your client’s situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.
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