Obstacles One Faces When Selling Life Insurance

The obstacles that one faces when selling life insurance can be daunting and even a little frightening. “No one has endurance like the man who sells insurance.” That’s an old refrain. Life insurance agents used to memorize it; it was meant to keep them going, because everyone knew that those salesmen had to face rejection and animosity like few other professional people. Usually, they were always finding themselves on someone else’s territory–that is, at someone else’s kitchen table–and trying to sell them a product that, to the average person, might as well be the air that we breathe.The obstacles that one faces when selling life insurance mostly have to do with the prospect’s ignorance. Like economics itself, life insurance is a product that is simultaneously extremely important and among the most misunderstood, or just flat-out not thought about, subjects on the planet. It’s got everything to do with one’s money and yet those who we could say are really knowledgeable about the subject are few and far between.So you come up against your first obstacle as a life insurance salesman: the prospect’s ignorance. It could even be the ignorance of a client of your company who was not very well educated by the former agent from whom you inherited them. You enter their home expecting them to welcome whatever advice you tell them…but as soon as you ask them to give you a check for a new, better policy or to place money into an annuity for them things fall apart. People naturally resist ideas that they don’t understand–even when those ideas could help them do things a better way. As a life insurance agent, you are faced with the very daunting obstacle of usually needing educated your prospect or your book of business client about the nature of life insurance, financial planning, money management, and how your new proposal (which will cost them some of their hard-earned money) is going to help them.But this can lead to the second great obstacle that one faces when selling life insurance: the fact that the prospect or client has had experiences with not-so-great, or even incompetent or sinister, life insurance agents before. There is a ridiculously high turnover ratio in the life insurance business. It’s 98%! That means that for ever person who gets hired to sell life insurance by a company, 98% of them either quit or get fired within their first year of employment! This indicates that the vast majority of life insurance sales agents simply aren’t all that special, let alone competent to do their job. If you last in the life insurance business, you’ll soon find that time after time you come across prospects and even clients that you got through your book of business who relate to you just terrible experiences they’ve had with life insurance salesmen before. If you listen closely, you’ll find that the problem they had is usually not with the life insurance company itself, although that does happen. The problem nearly always lies with a sales agent.Life insurance sales is a high-pressure business. You sell or you fail. It’s produce or perish. You are not going to collect a good paycheck every week just because you made good efforts. In a certain sense, you are self-employed. Due to the high pressure, there are lots of agents who buckle under pressure and cut corners, even resorting to illegal practices in extreme cases, to get those commission checks flowing so they can feel like they’re taking care of their families. But this results in poisoning the minds of the already somewhat distrustful public against salesmen, and especially about life insurance salesmen who are offering them an intangible product that might not even benefit them at all–and not do anything until they are dead!And this brings us to yet another one of the great obstacles that one faces when selling life insurance. When you sell this highly important financial product, you are making people think about their own death. Now, most of your best prospects are going to be younger people–let’s say people 55 years old and under–but, the younger your prospect is, they less they think about their own death, and the less they desire to do so! On the other hand, your prospects who are older will be more open to considering insurance against their own deaths…and yet, their premiums will be significantly higher.And that leads us to the stone-solid obstacle of price. People in general really hate paying for insurance, because their thought is they hope they never have to use it in the first place; and the less practical that insurance seems to them, the less they wish to part with their money in order to finance it. Yet the life insurance agent is trained to “never leave money on the table”. This creates conflicts of interest and can lead to immense tensions that result in lost sales.The bottom line is that the life insurance salesman needs to know how to overcome objections, and always remember that as long as he’s being honest he is helping people and needs to overcome their resistance to being helped.