Selling life insurance can present a number of challenges that can seem daunting or even frightening. “No one is more resilient than the man selling insurance.” It’s an old saying. It was a common refrain that life insurance agents used to remember. This was because they knew that salesmen faced rejection and animosity just like any other professional. They were often found on another’s territory, that is, at someone else’s table, and trying to sell them something that to most people might as well be our air.
Selling life insurance is difficult because of the ignorance of the prospects. Life insurance, like economics, is an important product. However, it is also one of the most misunderstood or simply not considered. Although it has everything to do with money, the few people who are truly knowledgeable about this subject are rare.
Your first hurdle as a salesman for life insurance is the prospect’s ignorance. You might even find the ignorance of a client who didn’t receive enough education from the agent you inherited. When you enter their home, you expect them to listen to your advice. But once you ask them for money to annuity or a new policy, things start to fall apart. People resist ideas they don’t understand, even if those ideas might help them do things better. Life insurance agents face the daunting task of educating prospects or clients about life insurance and money management.
This can make it difficult to sell life insurance. The turnover rate in life insurance is ridiculously high. It’s 98%! This means that 98% of those who are hired by companies to sell life insurance will either quit or are fired within the first year. This shows that most life insurance agents are not very competent or skilled to do their job. You’ll quickly discover that prospects and clients you have met in your life insurance business will often relate to you about their bad experiences with life insurance agents. Listening carefully, you will find that their problem is not usually with the life insurer, although it does occur. Problems almost always lie with the sales representative.
Selling life insurance is a high-pressure job. Either you succeed or you sell. Produce or perish. It doesn’t matter how hard you work. You won’t get a great paycheck every week. In a certain sense, you are self-employed. Agents are often under immense pressure to make a sale. They may even resort to illegal methods in extreme cases to keep their commission checks flowing. This gives them the illusion that they are taking care of their families. This leads to distrust in the minds of already skeptical public towards salesmen and life insurance salesmen. They offer them an intangible product that may not benefit them at all, and not do anything until their death.
This brings us to another major obstacle that life insurance salespeople face. You are asking people to think about their own deaths when you sell this important financial product. Your best prospects will be younger, say 55-year-olds and younger. However, the more they think about their own deaths and the less they want to, the better. Your prospects older than 55 years old will be more open for insurance to cover their deaths, but their premiums will be higher.
This brings us to the inescapable obstacle of price. People hate paying insurance because they think they will never need it. The less practical insurance is to them, the more they are willing to spend their money to finance it. The life insurance agent is trained not to leave any money on the table. This can create conflicts of interest that can lead to huge tensions and ultimately result in sales being lost.
The bottom line is that life insurance salesmen need to be able to overcome objections.