When life insurance was made available for sale through the internet, it put fear into most life insurance producers: The consumer could go directly to the web and purchase their insurance.
The need for the producer appeared to go the way of the dinosaur when it came to purchasing life insurance.
However, nothing could be further from the truth.
If you examine how people buy, it’s apparent that the internet should not be a threat to life insurance producers.
How people buy
When people go into a store to purchase a specific product, they’ve probably already researched it to see how much that same product costs on the internet.
Often, consumers find that the very product they’re looking for in a store can be delivered to their door for free at a lower price.
So why is everything not purchased off the internet?
The reason is simple.
There are often unrealized benefits to the consumer to buy something in person.
The main benefit when buying in person is that you can touch, feel and inspect the actual product.
When purchasing the same item on the internet, you’re not buying a tangible item in your hand but rather a picture on a computer screen.
Even though the price on the computer screen may be less than what you’re looking at in the store, the satisfaction of actually seeing your purchase often overrides a lower price.
Buying life insurance
Unfortunately, with life insurance, no matter how you buy it, you can’t feel and touch the benefit.
In fact, for many purchasers, they’ll never realize the benefit – but their survivors will.
Should they just settle for purchasing from the internet at a lower price? The answer is no!
That’s because insurance sold on the internet is not less expensive than buying it from a life insurance producer.
Since many things are less expensive on the internet, it’s automatically assumed that life insurance would be too.
But, again, this is simply not true.
The truth about buying life insurance - from any source
Life insurance companies are highly regulated by the states in which they sell their products.
They have to “file” their products for sale with each of these states and specifically list the premiums that will be charged for the product.
Whether that product is purchased through an producer or through the internet, the state will mandate that the price be the same.
The value of the life insurance producer
If the price is the same either way, is the consumer leaving any added value on the table by buying their coverage online?
The answer is absolutely!
The value they’re leaving on the table is the advice offered by the life insurance producer.
Because the prices the same through an producer or on the web, the advice an producer can give their client becomes a free service.
Do your customers know your value?
Most consumers don’t realize your value-add and feel compelled to make a life insurance purchase online.
It’s in the best interest of everyone that sells life insurance to be proactive about telling their clients that not only can they do their research online, but in fact they should do that.
Encourage them to get the information they need to feel comfortable about price.
Then let them know that in a meeting with you, they can incorporate their research into a plan that will cost them nothing more.
With this approach, it’ll be difficult for any consumer to make objections.
And finally, buyer beware: Some internet life insurance products, primarily term insurance, don’t have the same conversion options as are found through normal producer distribution channels.
The bottom line for life insurance producers
Don’t fear the internet – embrace it.
Use it as a tool to make the sale, while at the same time indicating that the service you provide is not only value-added but also without an added cost.
Now that’s a good deal!
Have you run into this situation when working with your prospects and clients? How do you help them understand the value of working with you?
