Why is Consumer Buying Behaviour Towards Life Insurance so conflicted?
When you speak to people about life insurance their reactions run the gamut!
There are those that extol the virtues of having protection for their families and others that claim life insurance agents are nothing but scam artists!
…but what’s the truth?
I personally think life insurance needs a facelift.
Sadly there are way too many myths and misconceptions out there and it’s harming people in the long run.
Find out why I LOVE life insurance and why you should too!
Why Consumer Buying Behaviour Towards Life Insurance Means So Much to ME!
Full disclosure probably isn’t necessary, but I’ll go ahead and admit my bias anyway. Chances are if you got to this article because you were searching for life insurance…CLEARLY I’m an agent!
…that being said I really do believe in life insurance. I sell a product I have. My family has comprehensive life insurance coverage and I’m very thankful we’re in that position.
In my humble opinion life insurance is one of the most important purchases you’ll make in your lifetime. If something happens to you, your loved ones will be able to financially withstand the loss.
It’s interesting that people are always considering risk. They use sunscreen or purchase an awning to protect themselves from the sun’s harmful rays, but balk at the idea of life insurance. I am not sure where the disconnect occurs.
Sadly, there are far too many families that would completely collapse if one breadwinner passes away prematurely. For those of you that think this can’t happen. Think again. It can and does. We knew someone this happened to and we swore it wouldn’t happen to us.
So let's start with the good, the bad and the ugly to shed some light on what's happening to this industry!
When Consumer Buying Behaviour Towards Life Insurance is GOOD
This story isn’t all bad! Consumer Buying Behavior Towards Life Insurance is OFTEN positive. Yep! There are TONS of life insurance success stories out there.
Men, women, and children who are beneficiaries of people who thought ahead.
Yessiree, there are family members that didn’t have to shell out 15K for a funeral because their parents bought final expense insurance. Kids that are going to University despite their Mom or Dad dying! Husbands and wives still live in their beloved homes because they could pay their mortgage despite a kick in the bank account.
Life insurance does a LOT of good.
…not to mention the charities that thankfully thrive on those life insurance contributions.
The thing is, despite the proliferation of positive vibes connected to life insurance you don’t hear a lot about it.
That’s because bad news travels farther and faster than good news ever will. Who wants to read a story about someone who managed to pay for their mom’s funeral because she did some estate planning?
It’s really NOT scintillating news.
So we get the other end of the stick which brings me to the BAD!
When Consumer Buying Behaviour Towards Life Insurance is BAD
“Life insurance is unaffordable!”, “I don’t need life insurance I’m healthy…”, “way more people live past their coverage than get a payout!”, “my family will work it out if I die young – talking about death is a downer.”
Yeah, I’ve heard it all and nothing could be further from the truth. All of the statements above are deeply flawed in one way or another.
I defy a client who has debt and dependents to come to my office – do a financial assessment and balk at the idea of life insurance.
It’s never happened. On the contrary! People more often than not are completely shocked by the numbers we knock out. I think most of us seriously underestimate the cost of living.
Life is expensive. When a paycheck comes in it’s easy to take it for granted.
When we review all your monthly expenditures and analyze what would happen if a source income stops, never to return, it becomes clear just how untenable the situation is without 2 salaries.
This is where life insurance comes in. You get a tax free source of income that eliminates this issue. Everyone that has children should at least run the numbers so they have a realistic grasp on how this works.
The thing is, debt doesn’t end when you die. Your spouse and children will have to cope with the financial situation you leave behind. If it’s positive then they will benefit. If it’s negative they will struggle.
When Consumer Buying Behaviour Towards Life Insurance is UGLY
Ok, now let’s check out the circumstances when consumer buying behavior towards life insurance is UGLY!
….and I’m sure you’ve heard it too. You know the drill, Life insurance is a SCAM and all life insurance agents are thieving vultures who want to sell you products you don’t need and can’t afford to line their pockets.
…but you know sometimes is simply TRUE!
Whaaat?? Yep. There are unethical life insurance agents and some of them do want to take advantage of you by pushing a product that you don’t need. This makes me mad because most of don’t do this.
Good Agents are More Prevalent Than the Bad
I personally don’t know anyone like this, nor have I had any dealings with an agent using these tactics.
We were lucky, my wife found a wonderful life insurance agent named Greg Oswald. He was patient, thoughtful and informative and we’re still in touch with him to this day. In fact, I would go as far as to say that he inspired me to look into life insurance as a career.
On the other side of the coin, I do know people who have not been as lucky. There are a lot of agents that push products – like whole life insurance – because the commissions are awesome. Cash value life insurance is an expensive option and it sure isn’t for everyone. Of COURSE, there is a time and place for it and I do sell it…
…but NOT to most of my clients.
To be frank, term works for most people most of the time so a lot of my sales are in this arena.
To me, a winning salesperson identifies someone’s need and communicates the benefits of our products and services in the context of that need. Simple! However, no two clients are the same so emotional intelligence, fluidity and creative thinking are a must. Finding Excellent Salespeople: Six Key Traits to Look For, Forbes
Independent Life Insurance Agents are the Bomb!
That’s why you should ALWAYS use the services of an independent life insurance agent, like those at Policy Architects. First of all, we’re not tied to an outcome. Captive agents work for ONE life insurance company and they are hell-bent on selling that line of products. An independent agent has access to MANY life insurance companies and will select the one that meets YOUR needs.
Also, beware of agents throw you a low ball you and talk big. I’m a fan of honesty and transparency. On the Policy Architects site, you will never see us offering up Preferred Plus and Prefered quotes and holding them up as the norm. Only about 10% of people who are approved for life insurance will get preferred or elite rates.
The fact is, standard life insurance ratings are common. I would rather have you come in thrilled that we got your premiums down than expecting unrealistic figures that tempted you to call us. Premiums you may or may not qualify for.
Customer Buying Behaviour Towards Life Insurance Has a Lot to Do with Your Experience
Life insurance agents are ambassadors for a product that many families need but don’t have. We can really make or break people’s impression of the life insurance industry.
…but there are things that are just plain out of our control.
Yep, there are a number of people who have found this whole process less than palatable and who can blame them? There’s lots of room for things to go awry.
This is why I think it’s so very important to discuss this topic as a representative of the industry.
Sure there will always be issues…but not everything is within your agent’s control. There are a lot of steps in the process and not all of them are fun.
The things I’ve seen go wrong are varied:
Delayed Medical Results
This is VERY frustrating for you AND your agent. One of the most common reasons your policy is delayed is because your family physician is busy and life insurance questions from an underwriter get lost in the shuffle. Let’s say you have some test results and the underwriter doesn’t have enough information. They will reach out to your doctor to fill in the blanks. This can take days, weeks or even months.
Despite our best efforts, this does happen on occasion. It’s another reason why you should reach out to an independent life insurance agent, like those at Policy Architects. If you think you’re high risk we can evaluate your situation and even feel out potential insurers to see how they would rate you if you apply. Unfortunately, there are those that get poor lab results back and are rejected even if we dot all the I’s and cross all the T’s.
BUT this doesn’t happen as often as you think. 80% of the time, life insurance applicants are approved at standard rates or higher. That means less than 20% of applicants are rated or declined. This doesn’t mean you can’t get life insurance though. There are guaranteed issue options and we can reapply to traditional carriers after some lifestyle changes are made.
Yep, this happens. Once again, you can’t always accurately predict how lab results will turn out. Also, there are clients out there that fudge the truth a bit. A few months ago I had a terrific applicant. He was young and seemed to be in great health. Wellll not so fast. We got the lab results back and his liver panel was out of whack. Needless to say, he was rated. Sadly, he did not tell me he had a drinking problem in advance so this came out of left field for me. Always be honest with your life insurance agent. Lying is fraud and will only hurt your beneficiaries in the long run.
Finding Out You're Underinsured
THIS! If you don’t find a great independent life insurance agent you may not get the best policy for YOU. I wish I had a dollar for every person I’ve met that’s underinsured. It’s imperative that you go through your finances HONESTLY and cover yourself for what you need. Sure cheaper premiums are appealing but I know a lot of people that get 10 years into their policy and rethink their coverage. Maybe they have more kids, a bigger mortgage – whatever…
…but NOW you are a decade older and coverage is much more expensive. Think ahead. Where you are today is not going to be where you are in 20 years. Planning is KEY!
Claims Delayed or Rejected
Ok well, this brings me back full circle. I will reiterate the importance of your complete transparency when your life insurance agent asks you questions about your health and lifestyle.
Insurers always investigate claims. So let’s say you smoke 12 cigarettes per year and claim to be a non-smoker. If they can prove you lied on your application your beneficiaries will be left high and dry. Even if the cause of death was NOT connected. Lying on your application is fraud and will nullify your coverage. Just don’t do it!
Life Insurance Administrative Issues
Yep, this is another area of frustration for policyholders. Not all insurers are created equal when it comes to customer services. Delays and administrative mishaps occur. In fact, that’s a great reason to check out the review of the company you are signing on to BEFORE you sign on the dotted line. If you see hundreds of complaints maybe you want to give the company a miss.
Loss of Coverage Due Lapsed Payments
Life insurance ISN’T set it and forget it. You have to be on top of your payments. If you miss them your policy will be canceled. There are way too many stories about clients who moved and didn’t give their life insurance company their new address. There is one woman I know of that passed away and her family was completely unaware that her policy had lapsed. They applied for their claim and found out she was uninsured. Please, please check your policy regularly to make sure everything is in order.
So What do I LOVE About Life Insurance?
As I mentioned life insurance is an incredible product overall and far too many people need it but don't have it. To clarify why I love life insurance I'm sharing a few of my favourite things!
You Can Travel Knowing Your Family is Protected
I’m actually finishing off this post while on vacation in Italy! Sure it’s safer to fly than it’s to drive, but I have to admit there is always a little bit of apprehension attached to travel when you have a family. Now when I travel or make my yearly trip to the doctor it’s not fraught with worry about the future of my family. Did you know a lot of people don’t even think about life insurance until they have a medical issue? By then you’re already in a tough spot. If you think ahead you spend a LOT less and are covered for your most vulnerable years.
Traveling can be a great way to experience new cultures and make memories. It can also be a hazardous endeavor, especially if you don’t know the potentially dangerous consequences of making some simple mistakes. 12 Little Things You Are Doing When Travelling That Could be Putting You in Danger, This Insider
If You Have a Child with Special Needs You Can Cover That
Life insurance is an amazing tool for this sort of situation. If you have a little one who has a disability and you’re concerned about having the funds to continue seamless care when you’re gone, then life insurance is your new best friend.
A Henson Trust can be created to protect your disabled child’s inheritance with permanent life insurance playing a role. Call Policy Architects today and we can walk you through the process.
Lessen the Burden Of Taxes
You’re taxed until the day you die! Yep, you heard that right. If you have an estate that you’d like to leave to your kiddos you’re going to have to plan for the future because the bills can be hefty and may even prevent you from passing down your property. It’s always best to think about this before it’s an issue. You’ve worked hard to build your family’s wealth – you don’t want your children to have to sell the family cottage because you failed to think ahead!
Guarantee the Insurability of Your Children
Life works in mysterious ways. Sometimes we are dealt hands we’re not ready to think about. Did you know you can get life insurance for your newborn? Yep. The thing is this is a really morbid topic. You just gave birth and now you’re talking about life insurance? It sounds kind of creepy, doesn’t it?
The thing is if you cover your child at this point, they will be covered even if they have issues later in life that might make that impossible. Also if you select a permanent policy your child can use the cash value for education or other needs later in life. I personally think it makes sense to plan early.
You Don't Leave Your Family in the Lurch When it Comes to Final Expense
This is the elephant in the room that no one wants to acknowledge. You and everyone else WILL die. No way around it (at least not yet as I am typing this I am sure there are people in silicon valley working in this!). If you don’t plan for your funeral you’re doing a disservice to every one of your beneficiaries. A funeral costs a bomb and money has to come from somewhere. Why not get a small final expense policy and call it day. They are easy to apply for, easy to qualify for and are affordable.
It Should be Called Love Insurance
This article really moved me. This man lost his 33 year old wife and because of life insurance, he and his son were able to move forward after this tragic event.
They discuss reframing the term life insurance as LOVE insurance. Sadly a lot of people don’t want to talk about their mortality but it’s just part and parcel of the deal we get while we are on this earth.
I truly loved the video contained in this article and hope you will too. It encapsulates my personal feelings about life insurance. https://www.mirror.co.uk/news/uk-news/my-wife-thought-life-insurance-8114607
Don’t put it off. Because sometimes there just isn’t another day.
Policy Architects - We've Got Your Back!
Consumer Buying Behaviour Towards Life Insurance is all over the place.
Thankfully there are a number of people that realize the importance of this safety net that pull the trigger…
…but there are far more that think it’s not worth the financial commitment. My challenge? If you have dependents and debt give us a call and we can do a financial analysis to see where you stand.
It’s free and it will give you some insight into your situation. I bet you’ll be surprised just how much money it takes to keep your family in the circumstances they’ve become accustomed to.
So if you want to save time, money and hassle you should contact Policy Architects today.
We’re not a call center, we don’t have quotas and our philosophy is customized service with integrity.
Do we want to make sales? Sure, what business doesn’t?
…BUT we’re not willing to make them at your expense. In my experience, if you give people the best possible service and consideration, they shout your name from rooftops which means much more business than taking advantage of someone off to make a few more bucks.
Call us today! We’ve got your back.