Behavioral finance studies reveal that people who are confused put off making decisions. LIMRA’s research has shown that this is particularly true for people shopping for life insurance.
To give you an idea about how important effective communication is, consider a LIMRA/Maddock Douglas report that found there are 19 million “stuck” life insurance shoppers in the United States. These are people who see why life insurance is something they should have, but they’re not acting because they’re confused by the language used to describe the products.
Responses by LIMRA’s focus group participants show that many don’t understand or misunderstand terms like “accelerated benefits,” “death benefit,” “annuity” and “protection.” Using these terms puts off consumers and makes them less likely to trust our industry.
As we continue to mark Life Insurance Awareness Month, it is essential to revisit and rethink how industry professionals communicate with customers and prospects.
A recent LIMRA report called Translate From Insurance to English says many advisors are using analogies to make things clearer, likening the products and their benefits to concepts people are more familiar with and have experience with. For example, many financial professionals compare term insurance to renting a home and whole life insurance to owning a home.
Beyond analogies, financial professionals can raise awareness by asking questions to see where consumers are getting lost, drawing illustrations, and taking a look at what the future might hold. Whatever shape the translation takes, avoiding industry jargon and using commonplace language can help financial professionals show why life insurance is valuable and how it can protect consumers, their families, and their financial security.
For more facts about life insurance, please visit LIMRA’s Life Insurance Awareness Month page. Among what’s available is a 30-minute, three-part awareness-themed podcast featuring interviews with: Craig Simms, senior vice president, Sales and Marketing, Vantis Life Insurance Company; Rod Rishel, U.S. Head of Life Insurance, AIG Consumer Insurance; and Bob Kerzner, president and CEO, LIMRA, LOMA and LL Global Inc. Please have a listen.A related graphic designed for social media sharing can be found here.
New animated video demystifies the ‘hows’ and ‘whys’ of life insurance
As the previously mentioned LIMRA/Maddock Douglas research suggests, many consumers are no doubt “stuck shoppers” who know they need life insurance, but are confused about what type and how much they need.
Life insurance is the foundation of any successful financial plan, according to the I.I.I.; and the I’s on Insurance: It’s About Life’ video explains:
1) Reasons for buying life insurance;
2) The various types of life insurance;
3) And, most important, how to find the right type and amount of life coverage for your needs and budget.
For more detailed information, the I.I.I. also offers the following resources:
- Life Insurance – Explanations of the different types of coverage, how to calculate your life insurance needs and choose a life insurance company; and other frequently asked questions.
Facts and Statistics:
Other Industry Resources:
The I.I.I. is a nonprofit, communications organization supported by the insurance industry. For more information, visit www.iii.org.