Below, there are five important lessons I would like to share with regards to selling life insurance:
1. Successful sales are a combination of art and science.
2. People buy what they want, but they must be “sold” what they need.
3. Education is the best strategy to help people buy what they need.
4. People don’t want to know how much you know, but rather how much you care.
5.People don’t buy the product; people buy the person.
When it comes to selling anything, a successful sales strategy is almost always a combination of art and science. Selling life insurance is no different.
For many financial professionals, selling life insurance by using scientific calculations is recommended. In other words, this means using something that is quantifiable and verifiable through numbers, facts, features, and benefits.
Generally, there are two types of scientific approaches to selling life insurance:
1. The first common scientific approach is using a calculation based on a breadwinner’s income. For example, the appropriate amount of life insurance (depending on the age) is usually determined to be between 10 and 30 times their annual income. This is an easy and measurable strategy, because it provides a set face amount specifically designed to replace someone’s income for an appropriate number of years.
2. The second common approach is to sit down and explain the product details, features, and benefits–such as the company’s strength, competitive pricing, length of coverage, beneficial riders, cash values, etc.
There is nothing wrong with using these two scientific approaches, and many people have been successful in doing so. However, I believe there are better strategies that can lead to more sales, more clients, happier clients, and more referrals.
There is also an art to selling life insurance. The art part, in my opinion, is far more important than the science. The art of selling is brings life insurance to a personal and emotion level. In other words, this is where your prospective client is able to see, touch, feel, and truly understand all of the features and benefits of owning life insurance. This part of sales has nothing to do with numbers or a particular product, but rather with what these numbers or products can help them accomplish and why they cannot afford to go without life insurance.
Education is an Art
A key distinction to be made here is that the art of selling is best accomplished through education. People don’t’ want to be sold something; they want to make an educated decision to buy something. What is the difference? An educated decision is a purchase that is made as a result of their personal choice, and not solely your recommendation. It is a choice being made because they are educated and empowered to choose what they firmly believe, combined with what you have successfully proven and verified to be in their best interest.
Below are the four key pieces to the art of selling life insurance:
1. Helping them understand exactly what they own now. The large majority of people do not know what they currently have, and exactly how it works. They may have bought it many years ago and their situation is much different now; they may have been “sold” a policy that they misunderstood at the time of purchase; they may have forgotten how it works or why they own it.
2. Teaching the basics of the different kinds of life insurance. It is very important to note here that this is not an opportunity to try and “bash” certain types of life insurance in order to sell another. This educational conversation needs to be a basic and easy-to-understand explanation of how the three basic types really work (term, universal life, and whole life). In other words, the good, the bad, and the ugly. The sole purpose here is to help them understand how they work, and not to determine which type is their best fit.
3. Helping understand “the right amount” to own. Most people cannot tell you how to solve the mystery of “the right amount” of life insurance. They usually don’t own enough because it was purchased long ago, or because their circumstances have changed. This could be attributable to a myriad of life events including marriage, additional children, higher incomes, more assets, inheritances, and even more debts. So, helping them understand what they own and what they should own is a very important discussion.
4. Explaining the living benefits of life insurance. As we all know, there are many “living benefits” to owning life insurance. Some of these living benefits include disability benefits, accelerated benefit riders, chronic and critical illness access, estate and income tax benefits, added liquidity, safety, tax advantages, and pension maximization opportunities.
Identifying a Problem Creates a Solution
Once a prospective client understands what they currently own, what they could or should own, “the right amount” they should own, and how life insurance can benefit them in both life and death situations, they will invariably come to the same conclusion–they have a problem that needs to be fixed.
People must feel the weight of the problem before caring about the solution. They must first be overwhelmed by the magnitude and complexity of the problem in order to ensure that they readily accept the solution of purchasing life insurance.
Once prospective clients can identify they have a problem, understand the various options and solutions, and verifiably conclude that your solutions make sense, they are ready for the next step. This is when you have the opportunity to discuss the details of their options, provide your professional guidance and recommendations, and help guide them to the most appropriate solutions.
Let’s face it. Almost nobody fully understands life insurance, nor do they like to buy it. However, just about everybody likes to fix a problem they understand needs to be addressed. To take this a step further, people like to buy things they fully understand; people like to buy from professionals who take the time to help them learn; and people like to refer professionals who can simplify complicated and difficult financial decisions such as life insurance.
I have found the happiest clients are the ones who experience this kind of sales-free educational process. I hope this adds value to your practice too.