6 myths that insurance brokers believe

Insurance brokers can spend so much time thinking about insurance that they fail to see the world through their prospects’ eyes. Hey, I’m not judging… I’ve been in your shoes selling life insurance and equipment insurance!

Here are 6 myths that insurance brokers believe…

Myth 1: People care about insurance.

Sorry. People don’t care about insurance. It’s a necessary evil. They care about whether they’ll have enough money to pay the bills and they care about whether they’ll make it out of work on time to get to Jonny’s soccer practice.
They need insurance. They know they do. But they don’t know why and they definitely don’t care about it. It’s a hassle. So in your marketing, make it seem like the easiest, fastest thing they have ever done in their lives.

Myth 2: People understand the acronyms.

Insurance broker: “You’re going to get GRD with this XLM policy. Later, you’ll enjoy a ton of FST”.

Customer: “Sure. Show me where to sign.”

It’s so easy for us to speak in acronyms and other industry slang because we’re thinking about it in those terms all day long. But Mr. and Mrs. Just-Off-The-Street don’t have a hot clue what you are talking about and they’re probably too embarrassed to ask.

In your marketing and in your face-to-face communication, be insanely easy to understand. In fact, why not go find an 8-year-old kid and try to explain your insurance to them. When you find the right words, then you’ll be equipped to talk to your clients.

(By the way: I just made up the acronyms in the above scenario so don’t try to figure out what they are.)

(Another by the way: Obviously don’t talk to your clients like they are 8 years old. But the simple terms and concepts and metaphors you used with an 8-year-old can help guide you as you create a grown-up version of your explanation).

Myth 3: People want to take care of their loved ones after they’re gone.

That’s if you sell life insurance. There’s a similar myth if you sell car insurance – Myth: People want to protect their vehicle investment. There’s a similar myth if you sell house insurance – Myth: People want to replace their belongings in case of fire or theft.

Not true. That’s not the reason why people buy insurance. Yes, it’s a logical reason why people think about buying insurance but it’s not THE reason. It’s not what motivates them to get into their car and to drive to your office.
The truth is, there are two competing factors here: On the one hand, they don’t want to think about their death or a car collision or their house burning down. So that keeps them from thinking about insurance. But on the other hand, they worry about the “ifs” of life. (“What happens if I die?” or “What happens if my house burns down?”) and that motivates them to get into their car to drive to your office.

Myth 4: Deductibles matter.

Deductibles don’t matter to clients. How many clients have you had in your office who sit there and look at the deductibles and choose the lowest deductible? Maybe a few. Compare that to how many people sit in the office and look at the lowest premium. Probably way more.

Clients see insurance as a hassle. As an ongoing expense for something they’ll never use.

I’m not saying that you should downplay the deductibles or not mention them at all. Yikes! That would be bad. However, I am saying that you need to review how your clients make decisions and make sure that your marketing and sales presentations are resonating with what’s important to them.

Myth 5: Clients completely understand insurance when they sign for it.

Your clients have a lot going on. When they walk into your office, insurance is only one of a dozen things on their mind. Their kids are sick. Their boss is breathing down their neck. Their spouse forgot to get milk at the store so there won’t be cereal for breakfast. Their favorite TV show is on tonight. Their in-laws are visiting on Sunday. So when you show a client their policy and they nod approvingly to everything you say, it’s not because they understand what you’ve told them. And they’re not about to go home and read the fine print.

As a broker, you need to find the balance between explaining your insurance products adequately and giving your clients enough breathing room that you don’t bore them to death. It’s not easy. Fortunately, here’s something interesting you can do: Why not give them a print book or an ebook about some of the things that they need to know about their policies. (Or, get their email and send them an e-course with ultra-short lessons about their policies). If you write it in the right way, and follow-up, they just might become better educated.

Myth 6: The client is coming back at policy-renewal time.

Okay, this one might not apply to everyone – it depends on the type of insurance you sell and your jurisdiction. So in some cases, you sign up a client and just renew them year after year until the Mayan prophecy comes true and the world ends. But for some insurance brokers, that renewal is a HUGE opportunity that is all-too-often overlooked. All too often, insurance brokers make a sale and then ignore their client for year (unless the client misses a premium payment of course! Instead, that initial visit should be an opportunity start a relationship – a relationship that should include printed information, email, and telephone conversations. You’re not hassling your client, you’re helping them.

Case in point: In the eight years I’ve lived in Winnipeg, I’ve been to 4 or 5 insurance brokers for my car insurance – just the broker’s office that’s the most convenient to me at the time. And the company that sold me house insurance has never followed up with me to discover that I also need car insurance, life insurance, and business insurance. Hmmm.

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