You will find that there are certain people who are very reluctant to invest in insurance plans and that should not surprise you. People are justified in being unsure about things they do not understand. However, there are some misconceptions that you absolutely do need to clarify for the prospect. It is only when they well and truly understand their policies, without doubts arising from any myths and misconceptions that they will be more eager to invest in a policy. As they say…knowledge is power. So let’s clear up all these myths with some guidelines of what you can say in response to your clients, shall we?
Myth: You don’t get a return on investment from life insurance, so why invest at all?
Truth: To be honest if it is returns you are after, you probably should be looking for those in another place but that’s not to say you shouldn’t consider putting money into life insurance. This is a means to secure your family if something untoward happens to you and what you really get out of it is financial security. Your family really shouldn’t have to be worrying about expenses when they are already going through trauma or grief of losing a loved one and having life insurance in place is for this very purpose. Share these thoughts with your clients to let them understand the realities of the troubles that come along with death or severe illness and injuries.
Myth:. Medical underwriting is just a formality
Truth: No, it absolutely is not just a formality. Explain to your clients that Medical underwriting is as serious as it gets. You cannot fill out your forms with little or big lies. It is this document that determines how much risk an insurance company is willing to take for you. Health affects everything. If you are at high risk, you are most likely going to get rejected and if you do not get rejected, you will most likely have higher premiums to pay. It pays to be truthful. Besides it is so much more difficult to keep a track of your lies and will be a big hindrance when something unexpected like death or serious illness occurs.
Myth: The perception is that Insurance companies are not genuine when it comes time to pay out a claim.
Truth: This one is pretty straightforward. When you fill out your forms honestly and are completely transparent with the insurance company, with not a single lie, then the company is clear on what exactly the risk is that comes into play. So, when it is time to pay out a claim, they cannot reject you and have to pay as and when asked. However, if your answers are misleading and do not give the insurance company the full disclosure they have asked for, then it may be difficult to get a financial pay out as you have already given them reasons to doubt whether you are genuine. So once again, reiterate to the prospect why it is so much better to fill out details that are accurate and match your medical reports.
Myth: A parent who stays at home does not require life insurance
Truth: Absolutely not true and very regressive thinking if you ask us! In India, most parents who stay at home are generally assumed to be the wives in the family. Sure, they may not be financially contributing through the means of a “job” but you have to give credit where it’s due. Parents who stay at home have a lot to look after – cooking, shopping for groceries, doing the laundry, maintaining the house, as well as being a responsible parent to their kid and spouse to their partners Remember that a person who chooses to be at home does have financial worth and most definitely does need life insurance.
Myth: We don’t need to rush into buying Term Insurance because it is so cheap.
Truth: Yes, term insurance is cheap as the premiums are tiny and the benefits that are promised to you are massive. However, if your prospect thinks that they can put off paying their premiums till a much later age, then please burst this myth right away. The premiums you pay are dependent on how old you are when you buy a term insurance plan. As you age, the premium increases. This happens because the older you are, the more likely you are to face medical complications and subsequently will be asked to pay a higher premium to offset a higher risk. Don’t try to beat the system, let the system help you. Invest early and smartly.
By now, your prospects have a lot to think about once you have shattered these commonly believed myths about the insurance industry. Let them understand your points and ask further questions they may have. Provide them responses to comfort and settle their thoughts and then encourage them to invest in policies most suited to their lifestyles. The bottom line and main takeaway should definitely be this – should an emergency occur, life insurance is your family’s lifeboat.