Life Insurance: Scare Tactics Won't Make You Buy, Love Will - Part 1
Whether it is life insurance, disability insurance, or long-term care insurance, historically, selling via scare tactics (risk-based selling) has not been effective. What is risk-based selling and how does it work? It is a system of numbers, of “scare tactics” telling someone percentages of this or that, and if they do not move to buy something that they could be part of those unlucky numbers. It often leads to “hard selling” and sometimes unethical behavior with misrepresentation, twisting, defamation, and rebating as products of it. At Pivot, this is not how we approach selling life insurance.
So why doesn’t that approach work? Isn’t it instilling fear in the heart of the potential buyer, and doesn’t fear motivate people into action? It can, but not always with the best long-term results. The problem with risk-based selling is that it focuses on “prospects”, people that have the potential to buy yet no trustworthy long-term relationship is built between the “salesmen” and the buyer. Some products are not designed for relationships to be built around them, that may be true, but financial products are. “Professionals”, not “salesmen”, focus on building relationships with their prospects with the intent of building trust and a lasting relationship, eventually leading to what one would be able to call a “client-advisor” relationship.
Rather than trying to instill fear, a much better approach is to bring people away from focusing on the “risk” of not doing something to an understanding of the “consequences” of not doing something. Once a person realizes the devastating consequences that could affect the lives of people they love, they are more likely willing to accept the idea or plan of action to prevent those from happening. Most people are likely to have the desire to protect their loved ones and be inclined move to action in order to protect their financial futures.
Did you know risk-based selling fails, especially with men, because we don’t think that the odds are against us! It is a natural defense mechanism for us to think: “It will always happen to the next guy.” Why would I need to buy life insurance during my working years when I “know” I’m never going to die in that time period? The same is true for disability. Do I really care that I am 3 times more likely to become disabled during my working years than to die prematurely? If I already believe I have a “0%” chance of dying prematurely, zero times three is still a zero chance of becoming disabled! Really? Long-term care insurance? You’ve got to be kidding me. So I have a 70% chance of needing some type of custodial care after age 65 before I die? Well, I have news for you, I’m part of the 30% that won’t, so why do a need to buy a product I will never use? Sound familiar?
When people are stirred by an understanding of the emotional, physical, and financial consequences that the lack of a plan in place will have on the people they love, they are more apt to buy a product to protect their loved ones. Once a conscience is stirred, it is no longer about the “risk” to that person specifically, but rather, the focus turns to the “consequences” that “could” happen to others they care about. This is how a conscience will help people with families to think and plan ahead. Stay tuned for Part 2 of this blog to see what other motivators exist when it comes to buying life insurance to protect your loved ones.
About the author: Kyle McDonald holds FIC, FICF, FSCP® & CLTC designations. His viewpoint on life insurance is simple, “Anyone with a family must have life insurance. In the end, life insurance is for others you care about, not you.” He is ready to help you and your family get the best option available. Contact Kyle today at 1-800-651-1953 or KMcDonald@Pivot.com.