Though selling life insurance lets you earn an unlimited income. In fact, renewal commissions can also create an annuity for you. Read how by clicking here.
However, the dropout rates of insurance agents are quite dismal. As per reports, only 1 in 3 insurance agents complete 10 years in the insurance business. This makes the failure rate of insurance agents 67% as only 33% of the empaneled agents remain active in the field (reference article by: The Times of India). That is why insurance companies focus on agency retention because they know that the agency channel is their primary source of revenue.
Have you ever wondered the reason for such high dropout rates? After all, insurance agency promises you renewal commissions, access to other rewards and recognition and also a chance to participate in international insurance convocations by becoming an MDRT, COT or TOT. So, why do many insurance agents fail in selling insurance? Let’s find out–
Top 4 reasons why agents FAIL to sell insurance
Reason #1 – Inadequate knowledge of insurance and changes in the market
Life insurance is a technical concept. Customers look to you, the agents, to explain the technicalities of the product before they invest in one. If you don’t have the relevant knowledge of life insurance and its products, your clients would not place their trust in you and you wouldn’t be able to make a sale.
Moreover, the life insurance market is also dynamic in nature. Constant changes and upgradation take place in the structure of the products, their tax implications and the rules and regulations governing them. If you don’t keep yourself updated about the latest changes, you wouldn’t be able to handle customer queries about such changes and would end up losing clients.
Reason #2 – Failure to handle objections
When you set out to sell life insurance, you get various thorns in the path in the form of objections from prospective customers. Handling these objections is an integral part of closing the sale. Until and unless you provide your customers with hard facts which lay their objections to rest, you wouldn’t be able to sell life insurance products. In fact, objections should not be treated as rejections. They are opportunities for you. If a client expresses any objection it means that he/she was listening to your recommendations. Chances of closing the sale are higher when you face objections than when you don’t. The only flair that you require is handling them effectively.
Reason #3 – Incorrect product positioning
Most of you are so eager to pitch in the life insurance product that you ignore matching the product to your customer’s needs. What is the best life insurance policy for you might not be suitable for your clients? If the product doesn’t suit the customer’s financial requirements, would the customer be inclined to invest in it?
Obviously not! Selling life insurance policies successfully requires proper financial planning and product positioning. You should, first, understand the financial requirements of your customer before recommending a life insurance policy. Only if the product fulfills the needs of your client would your client be interested in putting his hard-earned money into it.
Reason #4 – Expecting too much too soon
Warren Buffet made a very interesting remark outlining the importance of time. He said, ‘You cannot produce a baby in one month by getting 9 women pregnant.’ He’s right, obviously! In life insurance sales, time and patience are required. There is a formula which states that out of 10 clients you meet only 1 would give you a sale. Consistency, therefore, is the key in life insurance business. You cannot expect the rewards of your profession immediately when you start. You have to persevere to make your mark. Don’t expect very high returns immediately after becoming an agent. Persevere, fix appointments and meet people. Even when you face rejections, don’t give up hope. Approach more prospects and increase your client base.
Which mistakes, from the above four, are you making? Are you taking your insurance career to the heights which it can reach? Click here to find whether you know everything that your career as an insurance agent has to offer you beyond commissions.