Why is it so difficult to get people interested in life insurance?

[the Chocolate]

People will quite happily insure their house contents, god forbid no tv or stereo but will not insure their life to ensure dependents are looked after...
Sums up the British mentality...

 

[Steve Sellers]

Sums up the British mentality...

How? So anyone in any other nation are more concerned with looking after their loved ones when they die? It sums up human mentality, nobody wants to think about death.

 

[Scott-Copywriter]

People will quite happily insure their house contents, god forbid no tv or stereo but will not insure their life to ensure dependents are looked after...
Sums up the British mentality...

Luckily, people in this world presume they're far more likely to get burgled than they are to suddenly and unexpectedly die in the near future.

If it was the other way around then it would be a very depressing state of affairs.

 

[Talay]

I think the root cause of al the problems we have with financial products, including life assurance, is that the general public is generally uneducated.

Look at pensions. Huge percentages of the working population have no provision, none at all, despite years, nay decades, of being told that the State will not be providing enough to live comfortably.

Critical illness has a truly bad reputation, not from the 90% who are paid out but from cases where the policyholder has cancer but just not quite the right cancer. He'll still have to give up work but the insurance company is off the hook. I think a 10% refusal rate is worryingly high to be honest.

Life assurance is misunderstood. When people people peel away the veneer of the sales channel and find that the advisor is getting a commission of perhaps all the premiums from the first 18 months, they are rightly shocked. I know about clawback and have done for over 20 years but I am not financially illiterate, unlike the vast majority of the population.

Getting past the commission and into fees, Joe Public cannot understand why setting up a £50 a month policy should take a £500 fee when they get paid £20 an hour.

The lack of financial education is the root of the problem for purchasing financial protection but perhaps the greater problem is the amount a financial adviser thinks they should earn, which in turn dictates commissions and fees. I'm not saying they should work for average wages but as with estate agents or recruitment agents, doing a relatively simple formulaic job, I don't really see the need for them to earn in six figures as a routine.

 

sirearl we all let others control our money per say. As for being bookies that is the wrong analogy i think. The odds of you dying is a certainty. I would think of it as a savings scheme for your family.

Well I prefer to help them while I am alive.

I suspect I may find it a tad difficult after I am dead.:|

I mean the fact that a dutch pension pays twice a UK one says there may be something rotten in the state of Denmark.

 

[the Chocolate]

How? So anyone in any other nation are more concerned with looking after their loved ones when they die? It sums up human mentality, nobody wants to think about death.

How? I think it's pretty obvious, most people appear to be more concerned with possessions rather than financial security.Nobody wants to think about death? come on..

 

[the Chocolate]

When you pay the premiums, they use this money to invest in the stock market. This is where they earn their money.

Tony you are wrong when you say that they would pay the premiums back for 'non disclosure'

 

[Matt1959]

Thats what the welfare state is for , why you pay your taxes and NI contributions etc etc,

Seems we can't win here as there are those that are quick to criticise people
who rely on state handouts yet you are saying for some bereaved families to do precisely that. All the more odd when life insurance can be had for relatively little cost (£10 to £20 pcm) which will give a very useful sum to a family left behind. I would guess the majority of famillies with children would be left in a right financial mess if the main wage earner has died. I dont see £20 a month on helping safeguarding a famillies future as an extravegant expense.

 

[Steve Sellers]

How? I think it's pretty obvious, most people appear to be more concerned with possessions rather than financial security.Nobody wants to think about death? come on..

And financial security provides what exactly?

 

[the Chocolate]

And financial security provides what exactly?

It provides praise of mind for your loved ones, do you have critical illness,life cover, home insurance?

 

[123Simples]

Any type of insurance would be good if companies were not then looking at ways of getting out of paying in the event of a claim.
Life insurance is no different, but I would recommend having it.

I would also suggest that you FULLY DISCLOSE everything because life insurance companies will deem this non-disclosure should you (or your estate) ever need to claim.

In a perfect world I believe that Life Insurance companies should make their decisions on underwriting ALL clients by checking with the GP first in all instances. It seems lame that they are happy to take the premiums and cry over pay outs by looking at "the small print" afterwards.

All things being equal I would guess that most people need it, but what they need most is companies that are decent enough not to look at ways of getting out of paying if something dreadful happens!

 

[Steve Sellers]

It provides praise of mind for your loved ones, do you have critical illness,life cover, home insurance?

I think that's my business which of those financial products, if any, that I have.

I'm all for planning for the family after death - I write wills. I just don't like to see the issue being blurred, it says nothing about "the British mentality".

Where is your evidence to say that, for example, the French mentality is any better? or the American, or the Western Samoan?

 

[Matt1959]

In a perfect world I believe that Life Insurance companies should make their decisions on underwriting ALL clients by checking with the GP first in all instances.

This I do agree with. Why cant life insurance companies have a procedure whereby they can check GP records and satisfy themselves that the client is in a particular state of health?

Re. insurnace not paying out for life claims, I kind of get the impression that these cases are the ones that they are least likely to baulk at paying but I may be wrong.

Re. financial security - my wife cannot work full time therefore should something happen to me as the main wage earner, she will be left high and dry. It seems then only prudent that I take out a life ins policy so that in the event of my death at least my wife and kids will be able to "carry on as normal". Death of a loved one is bad enough with out the financial **** hitting the fan. Given that life policies are relatively low cost it seems a no brainer to take them out. I dont understand why people are so against them. The only time they would be a waste of time is if the dependants were finacially secure anyway.

 

[VictorVector]

My serious gripe over any type of insurance is that insurance companies will always narrow the odds of a payout through exclusions or penalties for their own business benefits.

Therefore if you are a good risk for an insurance company, ask yourself the question - do you really need to insure unless you're legally obliged?

Conversely, if you can't get insurance or it's prohibitively expensive then you're screwed and no-one cares anyway.

If insurance was truly the risk of the few shared among the many, it would be much fairer to all and a more valuable proposition for society too.

 

[tony84]

Insurance companies will request GPs notes if you have had significant medical conditions in the past otheriwise they wil ask a standard set of questions beforehand.

 

[businessfunding]

Based on your original post I would say that your mistake is that you are selling life insurance - which involves people admitting that they are going to die. (Also, personally I would move away from the 'free advice' angle which is a trifle misleading)

Most life insurance is bought either as a slight grudge purchase to support a loan / mortgage etc or by wise and worthy people who actually sit down an plan the future.

That leaves the majority of the adult population who suspect they should be covered but won't do anything about it.

My suggestion woul be:

1. Stop selling life insurance

2. Start focusing on the benefits and beneficiaries. In cliche terms you are selling peace of mind and security but you can refine this and target it to the indiviuals you are selling to.

Keep it positive - sell ongoing lifestyle. kids' school fees, etc etc.

Remember, Mr Neuclear doesn't really care - he will be dead - Mrs Neuclear and her 2.4 kids care a lot!

 

[Jet Virtual]

Because people think they are going to live forever

 

Because people think they are going to live forever

Well you have to or one would never get out of bed.

 

[TonyINPFM]

Based on your original post I would say that your mistake is that you are selling life insurance - which involves people admitting that they are going to die. (Also, personally I would move away from the 'free advice' angle which is a trifle misleading)

Most life insurance is bought either as a slight grudge purchase to support a loan / mortgage etc or by wise and worthy people who actually sit down an plan the future.

That leaves the majority of the adult population who suspect they should be covered but won't do anything about it.

My suggestion woul be:

1. Stop selling life insurance

2. Start focusing on the benefits and beneficiaries. In cliche terms you are selling peace of mind and security but you can refine this and target it to the indiviuals you are selling to.

Keep it positive - sell ongoing lifestyle. kids' school fees, etc etc.

Remember, Mr Neuclear doesn't really care - he will be dead - Mrs Neuclear and her 2.4 kids care a lot!

Very constructive thanks.

The reason i say free advice is because it is. I have had a fair few people ask how much an hour i charge. The reply is 'my advice is free. I am paid by the supplier if you were to choose to take any solutions i present. However there is absolutely no obligation.'

I understand selling the benefits and not the words 'life insurance' but it is hard to avoid when probbed with the 'what do you mean? life insurance?'

 

[tony84]

I sell peace of mind
Go on...use that in a meeting i dare you lol.

Im a Mortgage Advisor so i sell life insurance on the back of that, but i genuinely dont have an issue. There are occasions where i have sold life insurance to people who dont have mortgages but in the main they have requested it.

The easiest one i find to sell (surprisingly) is PHI...once you explain what it is, and how little they will get from the state and that you have to pass/fail certain tests in order to get it people realise the importance of it. I sell it on about 90% of my appointments. Its not even expensive for the majority of people.

 

[kevinsmith]

The best way is to get people who need insurance to contact you. This can be accomplished by purchasing leads from a lead company. A lead company will use direct mail or Internet marketing to collect data from people asking for a quote. Then the lead company sells the data to agents.

 

[yzg003]

I think most people only consider the recent thing, but don't spend a lot of money in the very distant things. And this kind of insurance policy also is not very stable, may change at any time.

 

[Jinxie]

there are a lot of choices also, that might intimidate people

 

[tony84]

The other thing is, which is easier to do face to face, is to make it more light hearted.

I dont know how but more often than not, i end up having a laugh with clients about it.
If its a couple, "you'll be watching your back now every time she picks up a knife in the kitchen" or point scoring about who is the sickest when it comes to the health questions.

 

[herewegoagain.]

I used to work for a large well known national company who used to insure their (cash holding) machines against vandalism/theft/break in...

In the end the premiums got so out of hand (£30,000 plus a year!) that the head man at the top decided not to no longer insure them.

A company study was done that worked out the number of machines affected per year and it turned out it was at least 50% cheaper to 'take the hit' each year than pay the premiums !!

Insurance = over priced = priced themselves out !!

 

[mcjohn]

It has been observed that less people are interested in life insurance plans and majority of people prefer simple health insurance coverage. Actually life insurance quotes are available with several limitations and very few of insured people become eligible to get health insurance benefit due to limitations. High premium cost is also common reason for diversion of people from the plan.

 

[garyscottadamson]

I think people just do not see the value in it. We live in a nanny state where we subconsciously think and know that the Govt. will take care of any eventuality e.g. Homelesness, Cancer or Unemployment.

Our American counterparts don't have such a safety net, and are already used to (and comfortable with the idea of) insuring themselves for healthcare amongst other things.

Although we do get worried about what-if scenarious; most of us know that in the worst case scenario the Govt. will help us, so we're much less inclined to pay for any of this.

 

[businessfunding]

I think people just do not see the value in it. We live in a nanny state where we subconsciously think and know that the Govt. will take care of any eventuality e.g. Homelesness, Cancer or Unemployment.

Our American counterparts don't have such a safety net, and are already used to (and comfortable with the idea of) insuring themselves for healthcare amongst other things.

.

Put in context, we live in a taxed State where - in theory at least, we are contributing to our future wellbeing through taxes.

America has far lower taxes than we do, but when all insurances are taken in the outgoings are similar. Both systems have pros and cons.

 

[tony84]

The govt arnt providing as much as they were previously.
This is on the BBC today - http://www.bbc.co.uk/news/uk-19906596
Unsurprisingly i can provide a lot of links to news articles where people are relying on the state and the state just arnt providing or are doing but after appealing (which can take around 9 months).

I dont sell based on fear, its really not my style. I prefer to explain the benefits, the claims statistics and let people decide. But the state dont provide what people expect and the old "it wont happen to me" outlook is also a bit scary.... fabrice muamba, john hartson, duncan banatyne to name just a few recent famous people - 2 of which are sports stars who have had conditions that could put the average person in financial hardship.

 

[Jet Virtual]

Life insurance and other protection insurances are more popular in the states that the UK.

Being a Financial Adviser giving free advice on protection insurances i have found that people just don't want to know. They don't understand the importance of preparing your family financially if something should happen to you.

Is it that people are self programmed to avoid talking about illness and death?
The world of financial management still has a bad name?
Its too expensive in the current economic climate?

People don't like thinking of death so it's the hardest thing to sell.
But don't give up because there are plenty of life insurance brokers making good money.

 

[mcjohn]

Life insurance plans make payouts but not necessarily to everyone enrolled in the plan as it has several limitations. If you are not employed on a risky job or having majority of sure of safe life as well not the main earner of house then getting life is not necessary if it is costly. Here, an efficient health insurance plan can offer better coverage and benefits.

 

[stockdam]

No. 1........the main objective of Insurance Companies is to make money for themselves.

No. 2.........my kids are well capable of looking after themselves after I die.

No. 3........same as No.2. When my dad goes then he owes me nothing as he has given me everything I need already. I would rather he used his money to enjoy himself rather than give it to others to help buy their BMWs.