Selling Life Insurance

It isn't easy to sell life insurance. Investing in a mutual fund, you feel like you’re saving money. Purchasing insurance, you feel like you’re spending it. It’s not a pleasant thing to buy and there’s no immediate gratification.

But you might reserve some of the blame for the cautious and conservative industry itself. Buying the right insurance can be tedious and expensive - tallied up the unpleasantness: complex and confusing products, paperwork that takes forever to fill out, salespeople who push their wares rather than provide objective information.

Insurance is still sold much as it was in the middle of the 19th, when many of its largest purveyors were founded. Insurance companies have armies of agents stationed in towns. 

To many experts on personal finance, the whole setup can seem pretty quaint. In books and online forums, a top obsession these days is minimizing fees. “You can’t control the market,” the cliché goes, “but you can control your costs.”

Insurance agents, meanwhile, often charge fat, obscure commissions as compensation for the many hours it takes to find their customers. Even without commissions, insurers can make it hard to figure out the true cost of a policy or to do comparison shopping. 

Insurance companies, like financial advisers, sometimes violate another modern taboo: the one against self-serving advice. In addition to selling essentials such as life and disability insurance, agents may be awarded commissions for selling various kinds of annuities, many of them so mysterious that the agents themselves can get confused.  

Some experts advice customer to avoid any complex financial products as well as the hungry agents who try to sell them to you. He recommends readers skip agents entirely.  

The standard advice on insurance, and it still holds, is that everyone should have disability coverage to protect against the chance that they will no longer be able to support themselves or their families. You also need life insurance if you have financial dependents, with coverage several times your annual income. Experts usually recommend getting "term" policies—temporary coverage, for the time your children will be relying on you—rather than permanent, "whole" insurance coverage, which is usually pricier. The most convenient and cost-effective way to buy disability and life insurance is often through employers, which can get better group rates, though that coverage generally isn’t portable if you leave your job.  

Maybe it's time for life insurers to change things up. The industry have to rethink the way it sells its products and emphasize how insurance can help customers while they're still alive. One way is to link it with people’s retirement needs, including protection against medical and long-term care costs. 

Some are adamant that face-to-face meetings are the best way to sell the firm’s insurance and investment products. Like a personal trainer, “a human being creates discipline to get people to do what they need to do.