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?”