Selling life insurance means talking about a subject that most advisors and clients prefer to avoid. But, with life insurance sales on the decline, Jim Ruta, an advisor coach, writer, speaker and managing partner of InforcePRO.com, says the industry should restore the honour of this profession to ensure that clients’ insurance needs are being served.“There’s a huge discomfort in dealing with life insurance for the actual life insurance needs. Nobody likes to talk about their impending demise and life insurance forces you to talk about this sad reality.”
In recent years, Ruta believes that because of this discomfort, the industry has moved toward a more comfortable subject – retirement needs and the risks of living too long. “Nobody wants to have the hard discussion.”
Instead, advisors prefer to call themselves anything but life insurance agents. “We’ve become investment advisors, financial planners, comprehensive financial planners. We’ve done all this stuff to get away from what we don’t want to talk about.”
Even when advisors sell life insurance, it is often wrapped up in a concept. “We invented things like the 10/8…We’ll make life insurance an asset class – that’ll do the trick,” he comments. “It’s a weakness in the industry. It’s why nobody wants to service life insurance policies anymore.”
The average life insurance advisor in Canada sells fewer than 20 life insurance policies each year, says Ruta. Instead of selling insurance, they’re helping people with their investment needs, their “live-too-long needs”. This may be important, but, first and foremost, it is critical that families be protected by life insurance, he contends.
Ruta says there is a major opportunity for advisors who would like to sell more life insurance. He suggests starting by asking prospects this simple question, ‘Has anyone reviewed your life insurance portfolio lately?’ The answer, probably 99 times out of a 100, will be ‘No’, says Ruta.
Developing the skills to sell life insurance takes practice, he adds. Even veteran advisors’ insurance sales skills will get rusty if they don’t sell enough of it.
“I see this now in advisors who have been 30 years in the business. They haven’t been talking about life insurance needs in the old fashioned way…at the visceral level with their clients. They’re afraid of it. They just don’t know what to do or how to do it.”
And, the longer advisors avoid selling life insurance, the more likely they will forget how to do it completely. “And the banks, maybe in three or four years, will just go in and handle it from there,” warns Ruta.
“We have lost the ability to talk about product, to talk about these feelings that we’ve got about the love we have for our family, and the responsibilities we have to our liabilities, or to our business,” says Ruta, adding that the role of the life insurance agent is not respected enough today. “Who walks around and says, ‘I’m a life insurance agent’? There are some and…generally speaking, they are wildly successful. But it takes a level of self esteem and understanding of the nature of the business to say that.”
As an industry, “We’ve outsmarted ourselves. We’ve gotten to be so smart that now we don’t even talk about things that are really important, that really matter and that only life insurance agents can fix.”
No gimmick is needed to sell these products, he adds. The need is simple and clear – take care of your family.
The important nature of these products should instill pride in those who sell them, he adds. Life insurance agents “always have had an extraordinary place in the lives of their clients”.
Ruta recounts how last summer his friend Tom died leaving behind his wife and four young children. Because of life insurance, his wife does not need to return to work and no trust fund will need to be set up to help the children.
Protecting wives and orphans are old fashioned reasons to sell life insurance and Ruta believes these reasons have been spurned over the last 20 years.
Many advisors may think it is not a very sophisticated or classy product to sell, but consumers are the ones who pay the price for this attitude, Ruta says.
Advisors who are well practiced at selling this product, however, can make a difference in their clients’ lives. If they’ve gotten past their own internal discomfort about dealing with the reality of life and death, then they can convince their clients to do what is right – protect their families.
Ruta believes industry associations, insurers and managing general agencies all have a role to play in restoring the honour of life insurance sales.
“Everybody can say, ‘Wait a minute. How about we get over ourselves, move our egos out of the way and do what’s right for people – to help them do what’s right. Will that be easy? No. Does everybody want to talk about this? No.”
Advisors can lead the charge by getting back to selling life insurance. “If this comes from the grass roots, companies will follow.”
His message for advisors who want to get back to selling life insurance or get into this market, is to seek out sales resources from their MGAs or insurers.
“It’s going to take a little bit of effort but you can do it…It’s a very gratifying business.”