Study shows life insurance companies may need to improve sales pitches

Life Insurance and Annuities
by Scott Morrow

Those in the life insurance industry are likely to be acutely aware of lines of business that may have struggled in the last several years, as well as many of the reasons why. However, new data suggests that it might not be so much that people don't want life insurance, but rather that the way it's being sold could be improved.

One of the biggest issues that life insurance companies may face today is finding ways to avoid concentrating on marketing to consumers in ways that do not actually appeal to them, according to a report from Life Health Pro. There are many ways in which life insurers may try to sell their products versus what people actually know and understand about them, and that disconnect may lead to a large number of lost sales.

And the major issue for many such companies is this: Some might not be currently purchasing life insurance, but they certainly seem to want and value it, the report said. As many as 18.7 million people across the country may see why life policies are a good idea for them to acquire, but don't currently own life insurance because they never got past the shopping stage.

What can be done?
Another potential problem relates to many life insurers likely having done things the same way for so long that the prospect of changing is difficult, the report said. Maria Ferrante-Schepis, the study's coauthor, noted that companies might not find it easy, but this kind of change is necessary if they want to keep their success on the rise going forward. It can often be as simple as changing the language used to communicate with prospective clients by making it easier for people to understand, rather than the utilization of more complicated industry terms.

One issue that many life insurers may face is that people often aren't knowledgeable enough when considering acquiring a life insurance policy. But working to educate them on what it costs, and the benefits of such coverage, will typically lead to more people seeking out such coverage. This may be particularly true as the economy continues to improve.