Pretty safe to say that if you are of working age (above 21), then you probably were subject to a disappointing Life Insurance experience from the list below:
- Bought from a Harry Houdini – who disappeared without a trace after the sale
- Bought from a high pressure sales person – who literally can turn carbon into diamond during his spare time
- Bought the wrong product which you later found was unsuitable – usually from a friend, no less!
- Bought a policy under the inducement of a discount or freebie – which you regretted later
- Bought a plan thinking that it would handle a certain claim – but it didn’t
Notice a common theme? Something had to be BOUGHT for you to have the shitty experience in the first place, which is why Insurance has such a bad rep.
Could the solution be to: avoid buying? That would probably lead to the worst experience of all: needing Life Insurance but not having any. Also, that is another topic for another day.
Rather than turtle up and renounce that Life Insurance “just isn’t my thing”, here are 3 very real, very adult approaches that you can take.
1. Upgrade your Insurance Knowledge
Your inner voice might be crying out plaintively: “It is my Insurance agent’s job to know the subject, not me!”. Do hear me out on this one.
That is exactly the root of the problem: Information asymmetry. When one party knows a lot more information than the other, then the probability of being taken advantage of goes up correspondingly.
Yes we may rely on professionals for their opinion, experience, and judgement – but no one is preventing you from reading up before making an informed decision. It may seem like a chore – but anything worth doing is worth doing well.
By learning more about Insurance, you have a far better chance of:
- Sussing out a good Financial Planner when you meet one
- Asking more informed questions about their proposals
- Making the correct decision
As a former practitioner, I can tell you straight up that I prefer clients that are well read up and know (at least) the basics. This paves the way for deeper, more meaningful conversations that result in better relationships.
The black sheep prefer information asymmetry, while true professionals know that information equality is how they differentiate themselves from the pack.
On that note, do be mindful of the resources that you use for the purpose of education. Steer clear of personal finance sites that talk about all and sundry while sprouting the occasional “Insurance” article. Do you really have much to learn from a site that explains why you should not buy a coffee machine?
Entertaining? Maybe. Educational? Hardly.
2. Keep an open mind
This is akin to relationship advice, and for a good reason.
You could have had a bad relationship in the past, but that does not have to stop you from having a fantastic relationship in the future. (Indeed, it shouldn’t! You are made all the wiser because of it)
Likewise, a shitty experience with Insurance in the past should not limit your future relationship with it.
Keeping an open mind allows you to conduct a post-mortem about the whole situation:
Was the product really unsuitable for me?
Will it ever be suitable for me?
What can I do to turn it around?
What will I look out for when consulting my next agent?
How do I pay attention to the details that really matter, for my next purchase?
And the most important questions to ask:
Was any of it my own fault?
Was I careless?
An open mind will facilitate much needed self honesty and let you move on from the encounter.
And who knows, your ideal Financial Consultant may be waiting just around the corner.
3. Understand the role of Life Insurance – but understand it is a business as well
Oh the delicious irony! Life Insurance is meant to protect you from the worst experiences that Life has to offer.
Premature death, serious illnesses, injury, accidents – all these can make any other situation seem trivial.
So Life Insurance gives us a chance to hedge our financial risk in the event of catastrophic situations. But all too often we forget that it is a business as well.
This means that insurers are driven by profit, just like any other business. To enable profits entails driving sales to a large degree – wherein lies some of the problems.
Overzealous telemarketers, enthusiastic agents in roadshows, unsolicited door knocks from “surveyors” are all caused in part due to the need for profits.
There is a fundamental flaw in the compensation model in this industry, which MAS is trying its darnest to fix – but there seems to be no easy solution.
Hence the ideal mindset to adopt should still be: I understand that Life Insurance is necessary, and it is acceptable that it needs to be profit driven. In my personal capacity, I will identify what products are suitable for me and purchase them for the right quantity and value.
That is, my friend, the mission statement of Clearly Surely:
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.
Properly insured means: For the right price, and the right amount.
And so we lived happily ever after
Not our habit to post inspirational stuff, but we figured this one makes plenty of sense: