Consumers Don't Understand Life Terminology

[Brian Anderson]

A new LIMRA/Maddock Douglas survey says most consumers don’t understand basic life insurance terms like “underwriting,” “rider” and “annuity,” and that’s a big contributing factor in 19 million Americans who believe life insurance is valuable and necessary being derailed during the shopping process.

My question is, do you frequently run into problems with prospects not understanding basic industry terminology, and if so, how do you overcome this hurdle?

 

[WinoBlues]

A new LIMRA/Maddock Douglas survey says most consumers don’t understand basic life insurance terms like “underwriting,” “rider” and “annuity,” and that’s a big contributing factor in 19 million Americans who believe life insurance is valuable and necessary being derailed during the shopping process.

My question is, do you frequently run into problems with prospects not understanding basic industry terminology, and if so, how do you overcome this hurdle?

On occasion someone will not understand an insurance term. I can usually tell and just explain it. Not a big deal. I speak to clients in fairly plain English and do not get into the minutia or details unless asked or it is part of a concept.

Most of my client base just want a policy they do not want or care about the inter-workings.

 

[LGilmore]

That is why they need us. If they remembered or actually knew how this stuff worked, they really wouldn't need us, now would they?

 

[DHK]

It's the agent's job to turn features and jargon into benefits and results.

A "rider" is an additional benefit, often with a cost - just like adding a towing rider to an auto policy.

"Underwriting" is the decision making process, just like with a credit card or mortgage.

"An 'Annuity' is an insurance-company issued contract with various features and benefits for the amount of money you put into it... just like a CD is a bank-issued account, and a mutual fund is done by brokerage firms. Whether or not an annuity is suitable for you, means that I need to ask you a few questions, and then show you the various kinds of annuities out there and how they work on a risk, return, and cost basis."

It's not about what they agent knows. It's about what they can communicate that matters in the relationship.

 

[rousemark]

I can't say as I ever use "rider" or "underwriting'

If I am discussing a rider, I simply say " If you want us to, we can also pay X if Y happens."

As for "underwriting, "the home office makes the final decisions after thhey check out all the information on your application.'

"double Indemnity becomes, "We will pay double if you are killed in an accident" or "we will pay an additional X making a total of X if you are killed in an accident."

Put the jargon into every day language and they understand.

 

[308ar10]

It's the agent's job to turn features and jargon into benefits and results.

It's not about what they agent knows. It's about what they can communicate that matters in the relationship.

I have found this to be extremely important in my past sales positions. So often a sales rep would do what I call an "ID" or info dump on a prospect and it often makes the situation worse. The prospect may now be even MORE confused and they will become less likely to make any purchase.

All the knowledge in the world is useless if its spoken to you in a language you don't understand.

 

[LifeWorth]

I to this day still do not have a fully working understanding of how an annuity works exactly. Anyone care to point me in the right direction where I can do some reading?

No wonder I've never sold one

 

[goillini52]

I to this day still do not have a fully working understanding of how an annuity works exactly. Anyone care to point me in the right direction where I can do some reading?

No wonder I've never sold one

http://www.insurance-forums.net/forum/annuities-forum/

 

[LifeWorth]

Annuities Forum

True, I could read through threads discussing specifics, but where could I read general information about how general annuities work? I know nothing about interest rates and how they work, how the payout period works, etc etc

Oh what the hell, I need to put google to use.

 

[Tahoe Ray]

True, I could read through threads discussing specifics, but where could I read general information about how general annuities work? I know nothing about interest rates and how they work, how the payout period works, etc etc

Oh what the hell, I need to put google to use.

Pm me your email address and I'll send you a "guide to annuities" from one of our carriers. It is very informative and a great primer if you know very little about annuities (although it is fairly lengthy).