If only your customers would tell you what they want, right? Ah, but they are. The LifeJacket Study 2011, conducted by Genworth, shows that 60% of life insurance policy holders want just an hour of time each year with their advisors for a life insurance review. However, only 38% of those customers polled are getting that face time. If you don’t think your customers want your attention, consider that 40% of the customers surveyed know they’re underinsured. If ever there was a market wide open with sales potential, this is it.

Yet on the whole, agents are not responding. That same Genworth study reveals that 52 million Americans have no life insurance. Those that do have it have enough to cover an average 3.6 years of living. Moreover, they know it, says the study. Of those who have coverage, 40% say they don’t have enough. Why aren’t customers buying? And what do agents need to do to capture that business? Some experts suggest it’s because agents have strayed too far away from basic relationship-building efforts and they’re relying too heavily on customers to know what it is they need and when they need it.

Old and inadequate

Truth is, many life policies are older and offer inadequate coverage for policyholders’ changing needs. Consumers don’t know what they need, according to a recent LIFE Foundation study, which revealed that 55% of customers don’t know how much to buy or what type of insurance they need.

Still, agents are putting up their own self-imposed roadblocks, according to Michael McIntyre, president and CEO of Benefits America. McIntyre points to the possibility that agents are averse to the rejection. The newer generation of agents, he says, may not have the thick skin their predecessors had. His advice: “Just go out there and ask. The worst that can happen is you get a no. You’ve got that going in.”

Beyond traditional triggers

Once upon a time, customers would remember to update their life insurance policies with the key trigger events — marriage, new child, opening a business or getting a promotion. Agents, for the most part, were on top of the review process, as well, staying in touch with customers and offering an annual review.

Anthony Vossenberg, Genworth’s senior vice president, says the days of customers remembering to review are long gone. If they’re doing it at all, customers are taking much longer to update or even purchase life insurance. “We found that people who purchased a home, where it’s pretty common to insure it from a life insurance perspective, were taking on average 15 months to buy the coverage,” he says.

Perhaps part of the issue lies in the complexity of insurance itself. With so many options, customers are often unsure of their choices. That’s where agents can most benefit their customers, via a needs analysis. According to Vossenberg, the customers actually want that. “Eighty-eight percent of people we interviewed said they wished they had some sort of needs calculator available in the buying process. Very few of them recalled their agent or financial planner ever taking them through a needs analysis.”

Still, Vossenberg thinks needs analyses are occurring much more frequently than consumers think. “I believe that advisers take their clients through needs analyses much more frequently than they realize. It’s just that the experienced person often has enough experience and has the questions in their head, but they do it on a pad of paper. Consumers are expecting it to be a little more sophisticated, maybe supported by a piece of software package, that it would come across as being more formulaic.”

Face time as sales time

Part of the reason agents don’t do annual reviews had to do with the time investment. Too many agents feel the time spent in the car and in the home is not worth it. Vossenberg says there are alternatives. “Why not send them the needs analysis and walk them through it over the phone? If they’re a customer, they already trust [the agent]. Why not by phone or electronically?”

Pamela Green has little sympathy for agents unwilling to set foot in their customers’ homes due to travel time, expense or fear of rejection. Green, an annuity specialist and financial advisor with Sapient Financial Group, says “Isn’t that your job?” Her credo is to take care of all customers as though they were already large accounts. “I’m not an elephant hunter. If I have someone calling me who has $30,000 to $35,000 a year in income, are their needs less relevant than someone who makes $300,000 to $400,000?”

McIntyre agrees. He says agents should focus on what the client is looking for. “Ask questions — how can I be of service to you? Don’t worry about the commissions. Worry about your customers; the money will come in later.”

Doing it right

Green works frequently with clients who are looking for insurance options, many of whom already have insurance in place. “When I ask how they calculated and got to that number, nobody ever knows. The normal response is, ‘That’s what my agent said’ or ‘Well, they said five to seven times my annual income.’”

Green handles life insurance as a piece of clients’ larger portfolios. In every case, she conducts needs analyses. Doing it right, she says, requires agents to shift their thinking from sales to service. She believes the best use of a needs analysis is as a service, not a sales tool. The most important weapon in an agent’s arsenal, in her opinion, is the ability to listen. “As I’m doing the analysis, I’m building the relationship. Mine is about the relationship, which people then expect annual reviews from me because I’m more than just their insurance agent. I’m a person helping them solve a need.”

As Vossenberg suggests, make it a more formal process. All experts agree that the analysis should be easy to understand and encompass data gathered from asking the right questions. Once the analysis is presented, customers can see how their current insurance policies measure up.

Green calls this face-to-face meeting, and all subsequent interactions, her relationship-building time. She removes all concern about commissions or products from her mind, which she says allows her to see more clearly what it is her customers are telling her they need. She then takes the data back to the office and creates recommendations from there. “I think it’s unethical to give some kind of recommendation in the first meeting without doing some kind of analysis,” she says. “What I do is gather all my data, then I analyze. Then I go back to the client and make recommendations based on facts.”

“You have to be in relationships,” McIntyre says. “These are eyeball-to-eyeball issues. You need to sit down with them and do a needs analysis, and an emotional one, as well.”

For those customers who would rather do an analysis in private, Vossenberg recommends using online needs calculators that agents can send to their customers. Marketing materials are also available to get the conversation started with customers. He recommends agents put needs analysis calculators and information on their websites. What impact does a needs analysis have on business? “We know that when a needs analysis is done, the average amount of insurance that is purchased is twice as much,” Vossenberg says.

Both McIntyre and Green agree. McIntyre adds, “People are loyal to agents that are taking care of them, who are focused on their needs, not the agent’s needs. It multiplies your business.”

“You’d be amazed at the opportunities these annual reviews can leave for you,” Green says. It’s limitless.”

Lori Widmer is a Philadelphia-area freelance writer and editor who specializes in insurance and risk management topics.