When I first entered the industry there were three “retired” agents who would sit down in the building’s lobby café, lamenting about how it used to be and how the industry was coming to an end. The new guys didn’t know how to sell or how to recruit and all hell was breaking loose.
Every time I walked by, I thought I was watching a scene out of “Death of a Salesman.”
Funny how things repeat themselves. About a year ago, I started talking to people about selling term insurance online. People external to the industry loved my concept and marketing strategy. People within the industry told me I was crazy. There was no way it would work. Insurance can’t be sold on the Internet. I didn’t know what I was talking about.
Was this realistic thinking or fear? Wasn’t the industry all fanatic about “Who Moved My Cheese?” several years back? Hadn’t we proven the Internet was more than a trend by now?
The more I followed the online term market, researched and did my due diligence, the more I began to understand that it was fear. Perhaps fear of the unknown, but fear nonetheless. And the more I listened, the more I wanted to create a new revenue stream out of the online term market.
The Internet is going after the sales the industry shuns: the small term policies. When you look at the travel industry, you can find the perfect analogy. Long ago, we went to travel agents for every travel need we had. We had no choice. But as the Internet grew, we were given alternative options. While it dramatically shrunk the travel agent forces, it didn’t eliminate them altogether. Today, if you want to book a weekend trip to New York City, you log on to Expedia or the like. If you’re planning a month-long safari in Africa, you call Abercrombie & Kent.
And that’s my prediction for the life industry. In the not-so-distant future, clients needing a simple term policy will log onto their choice of website and handle the transaction. Those wanting the benefits of an accumulation product, estate tax funding strategies or anything more complicated will call their advanced markets-style advisor.
While I strongly believe basic term insurance needs can and should be sold over the Internet, I also believe the other uses/forms of life insurance and financial planning strategies can’t and shouldn’t be sold online. There are too many variables that can only be communicated with real conversation.
Which brings me back to that fear. I wondered, where was it coming from? If the target applicant online is a 35-year-old man needing a $500,000, 20-year term policy and most agents won’t touch that business, why not create systems and platforms that allow us to serve that need, which is, arguably, a pressing need on the spectrum of who needs life insurance? When I pose this question to other agents, the unanimous response is, “I don’t want that business. You can have it.” Why? Because they’re thinking of the business model in terms of the one they’re currently using, not a new platform that provides access to these prospects while automating the back-end for ultimate efficiency.
You see, we’ve scared away much of this market. Somewhere along the line, when they became prospects by getting married, having children or otherwise developing a need for life insurance, they ran into a life insurance agent. And almost every time, they were shown some variation of an accumulation product they couldn’t afford. And they walked away, tail between their legs, thinking they couldn’t afford life insurance and protect their family. I see it time and time again. If I were to guess, this circumstance applies to 90 percent or more of the term sales I make. If the walls could talk, I’d have some great blog posts to write.
So where do we go from here? Do we continue to move forward, head in the sand, believing that the Internet isn’t for us and can’t possibly do anything good?
Nope. Because let me tell you the funny thing that happened on the way to the Internet … it started working.
For more on life insurance distribution changes, see: