Since 2008, headlines have shouted the struggles of Main Street Americans. Many of us have experienced significant depletion of our 401(k) and other savings plans, and have seen falling real estate values further erode our net worth. As a result, too many Americans are wrestling with significant financial security challenges, and are struggling to find ways to create both adequate life insurance protection and investment dollars for retirement.
Given these realities, it’s easy to let insurance protection fall by the wayside — even though the need for the right amount of life insurance has never been greater. Our industry is at a crossroads: Sales are at a 50-year low, and nearly half of Americans (42 percent) are underinsured or, worse, don’t own any life insurance. Among those who do own some life insurance, 40 percent believe that they don’t have sufficient coverage.
Despite the fact that they’re underinsured, many Americans admit that they would be open to talking to an agent or advisor if they were approached by one. So, part of the problem must be that this happens too infrequently. This is good news for agents, who often list prospecting as the biggest challenge they face.
A growing disconnect
How do we rectify this disconnect between agents and consumers? What can carriers and distributors do to help make agents more successful and, in turn, protect more clients?
While the insurance industry has done an excellent job of creating smart, innovative and more affordable products that meet the needs of more consumers and are easy for agents to transact, we still struggle to bring consumers to the table. Bridging this gap is about returning to a more traditional way of doing business. It’s about giving advisors and agents the tools they need to educate consumers about their insurance needs.
An old Chinese proverb says, “If you give a man a fish, he will eat for a day. If you teach a man to fish, he will eat for a lifetime.” This saying aptly describes the insurance industry 100 years ago, and it’s still true today. In the name of innovation, speed and process, we somewhat lost focus on how to teach agents to fish. Of course, innovation is vital to the long-term health of the industry, but it shouldn’t come at the expense of giving agents the tools to help them find prospects and build long-lasting relationships with them.
First and foremost, our task is to help agents become more effective salespeople.
Back to basics
To accomplish this, carriers and distributors should focus on the following five areas when training new agents. They may sound basic, but they’re the core of our industry.
- Referrals: Referrals are the lifeline of our business, and many of today’s agents don’t ask for them. They need training to help them master a process for securing referrals on an ongoing basis.
- Needs-based selling: This type of selling increases agents’ credibility, bears bigger and multiple sales and offers better protection for the consumer. We need to return to this method in order to reap these three distinct benefits.
- Practice management offerings and support: This is invaluable in helping agents build a successful business.
- Better selling and communications skills: Communicating well is the best way to help agents better serve their clients.
- More sales ideas and concepts to help agents approach consumers: Creative thinking from carriers and distributors will help agents create ongoing, fruitful relationships with consumers.
Seizing the moment
Skilled, well-equipped insurance agents have never been more needed. Now is the time for agents and advisors to help Americans re-evaluate their financial standing by helping them continually review their financial plans, re-evaluate coverage and obtain the life insurance they need – and it’s up to the insurance industry to make this possible.
If the industry partners and executes on these points, the outcome will be increased agent productivity and better education for consumers. The industry will also be able to tighten the ever-widening life insurance coverage gap in the U.S. – and that’s good business for everyone.
Anthony Vossenberg is the senior vice president, life sales leader at Genworth Financial. He can be reached at firstname.lastname@example.org.
For more exclusive life insurance coverage, visit ASJ’s Life Insurance Resource Center.
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