By Brent Kelly
They may like you, your agency, or your funny commercial, but they don’t like insurance.
When I attended my very first insurance training course back in 2000,the instructorsaid something to us I will never forget. He said, ”Congratulations, you get to sell a product that nobody likes, understands, thinks is too expensive, and only use when something bad happens.”Talk about a kick in the pants for a young guy getting ready to take on the world.
Looking back 13 years later, there is actually quite a bit of truth in what he said. Most people I talk to about insurance don’t like it, don’t really understand it, always tell me it’s too expensive, and only get to use when they suffer a financial loss.
I started thinking a little bit more why most people have such disgust for insurance, and I came up with a list of my top three reasons.
Brent’s Top 3 Reasons Why People Hate Insurance
1. It’s Invisible and Intangible
When you buy electronics, car, furniture,books or anything else tangible there is a sense of excitement after the purchase. You get to play with the electronics, drive the car, sit on the furniture, or read the book. With insurance, you get an insurance policy. Of course, if your insurance agent is really good, maybe you get a coffee cup or an atlas thrown in. How is that not fulfilling?
2. It’s Complicated
Not complicated in the “Friends”Ross and Rachel, "I don’t think this relationship is going to work" kind of way, but in the "What in the heck are you’re talking about?" kind of way. There are a about 100 different definitions, terms, exclusions and other provisions in most insurance policies. Most insurance policies make really good insomnia medicine. You need agood agentyou can trust to explain most of this stuff. That leads me to my third and final reason.
3. No Trust in the Insurance Agent or Insurance Company
Many people really feel that people in the insurance business are out to get them. Some are just paranoid, but others have had past experiences that justify their lack of trust. Whether it has been lack of service from their agent or not being treated fairly on a claim, bad experiences can put a very negative light on the insurance industry.
That being said, I see the critical importance of insurance products and have seen property, assets, and lives being able to be put back together after catastrophic events. Also, I have met hundreds of other agents, company representatives, and claims adjusters. The large majority of them are good hard-working people who want to help and do what’s best for their clients. It’s always the small minority that ruin the reputation and credibility of an industry.
You also have to remember where insurance falls into our buying processes.
Do you rememberMaslow’s heirarchy of needs?
We don’t buy insurance for psychological needs, self-actualization, or peak experiences. Although if you buy insurance to self-actualize, congratulations (you are the only one).
Insurance lives on the bottom two tiers. Safety and survival is why most people buy insurance. Buyers are protecting their hard-earned work, reputation, and making sure they can move on past a disaster.
Insurance agents need to learn why their customers buy before they try to sell.
Most insurance agents have a list of product features, services, and other marketing garbage that does not resonate with the buyer.
Most buyers simply don’t care how shiny your brochure is or how long you have been in business. They care that you understand their concerns and thatyou will be there if they need you.
Question:Why do you think people buy insurance?
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FAQs
No Trust in the Insurance Agent or Insurance Company
Some are just paranoid, but others have had past experiences that justify their lack of trust. Whether it has been lack of service from their agent or not being treated fairly on a claim, bad experiences can put a very negative light on the insurance industry.
Why do people avoid insurance? ›
Cost. One of the most common reasons people don't buy life insurance is that they perceive it as too expensive. However, life insurance premiums can vary widely depending on the type of policy, coverage amount, and individual factors such as age, health, and lifestyle.
Why is insurance so hard to deal with? ›
It is also the only state that mandates that insurance premiums must be based on three factors: a driver's record, experience and miles driven annually. Yet insurance premiums vary widely depending on many factors, including different coverage levels, what type of vehicle, where the driver lives and more.
Why do people fail in insurance? ›
Insurance agents succeed when they prioritize their customers' needs over their own profits. The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs.
Why are people so against insurance? ›
Lack of clarity regarding returns on the policy
Many understand the need for insurance but still look at it primarily as a money-making investment option if not tax saving. They feel that they are compensated only if the policy offers returns.
Why do people choose not to have insurance? ›
uninsurance has been attributed to a number of factors, including rising health care costs, the economic downturn, an erosion of employer-based insurance, and public program cutbacks. Developing effective strategies for reducing uninsurance requires understanding why people lack insurance coverage.
Why can't people afford insurance? ›
Why are people uninsured? Despite policy efforts to improve the affordability of coverage, many uninsured people cite the high cost of insurance as the main reason they lack coverage. In 2022, 64% of uninsured nonelderly adults said that they were uninsured because the cost of coverage was too high.
Is insurance really needed? ›
Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you'll receive an insurance policy, which is a legal contract between you and your insurance provider.
Is it better to have insurance or not? ›
If you don't have health insurance, you're at much greater risk of accumulating medical bills that you may not be able to pay. In a worst-case scenario, you could be sued and have your wages garnished. You might even be forced into bankruptcy.
Why is insurance so unaffordable? ›
Healthcare system complexity
This complexity often results in administrative inefficiencies, increased paperwork, and higher operational costs for both healthcare providers and insurers. These added expenses are eventually passed on to consumers in the form of higher insurance premiums, deductibles, and copayments.
Legitimate Denials
People have successfully fooled insurance companies into paying out for false injuries, so these insurers are often paranoid about paying out for a false claim.
Why do insurance companies not want to pay? ›
Insurers maximize profit by minimizing their expenses. Paying money for insurance claims is a large expense of an insurance company. The less that is paid out, the more money for their owners (the stockholders).
How many people quit insurance? ›
In fact, many agents new to insurance are fearful, knowing they face a high risk of failure. How many agents quit selling insurance? There isn't an exact number. But we figure somewhere between 90% and 95% of agents quit in their first 12 months of receiving their license.
Why am I being refused insurance? ›
When you are refused insurance it means that the provider has decided not to provide cover for your property or belongings. This may be because you do not meet the terms of their underwriters, or it may be because of a change in your circ*mstances which means you are perceived to be a greater risk to insure.
Why is it so hard for me to get insurance? ›
Why might you have a problem getting insurance. Insurers decide the terms and conditions on which to offer insurance cover or whether to offer cover at all. You may have a problem getting insurance if you have a complex medical history, are elderly or have criminal convictions.
Why people don t want to buy insurance? ›
Good health
A lot of people in India put off buying life insurance because they believe that they are young and healthy and don't need insurance. If you too think this, you must know that while you are young and healthy, it is the best time to buy insurance as you can get the insurance at a lower premium rate.
Why insurance is not needed? ›
Life insurance is designed to provide for people who would be at financial risk in the event of your death. So, one reason why you might not need life insurance is if no one depends on you financially or you do not need to ensure someone's financial health in the event of your death.
