What does the name “insurance salesman” conjure up in your mind?
Someone who will be your trusted advisor? Someone who empathises with you and really wants what’s best for you?
Quite likely the answer is no.
Recently I sat with a lady who earns a healthy six figure income every month working for a boss.
I made a remark about being in the wrong business and she replied that she wished she was making what “us insurance people” make.
Insurance salespeople, or financial planners as they’re now called, have earned the reputation of being salespeople. That’s because the whole industry is built on selling. If you don’t sell you don’t get paid. It’s that simple!
But should you throw the baby out with the bath water when doing financial planning?
So you have a need. Let’s say for argument you need one million Rand in life insurance.
Now remember that this business is built on selling.
There are two types of insurance companies – direct and traditional.
The direct guys don’t pay commissions so they advertise to find clients. ‘Cut out the middleman’ is their mantra but the driving force is still sales – which is fair. You don’t work for free do you? So why should they?
Now for the guy who knows what he wants, this business model makes a lot of sense.
But some people have more complicated financial planning needs.
- They need a bit of help with the process.
- They also might need their life insurance to fulfil a few other financial planning needs so they want a bespoke solution. For instance, they might need life cover as well as critical illness cover for a specific illness (This is also why you shouldn’t see an advisor who represents just one company).
But this guy gets paid with commission and this is where the distrust sets in.
The solution is simple…
Admit you don’t have a clue when it comes to insurance.
Let me ask you this – If you cut yourself deeply do you smear a bit of Dettol and hope for the best or do you go see a doctor?
Call an advisor and ask them the following questions:
- Do you represent more than one insurance company and will you provide me with more than one solution?
- Are you a member of a credible organisation with a code of conduct such as the FPI (Let me say that the industry does have a general code of conduct which you need to be aware of)?
- Can you calculate how much I need?
- Can you solve my need with one of your products?
- And then tell them what you need.
It’s really that simple.
Unless you tell him what you want he’s going to have to ‘guess’ what your financial planning needs are.
Look, the advisor should be capable of identifying what you need and how much you need. It’s his or her job to make you aware of this. But maybe a close family member of yours has been diagnosed with cancer and you’ve decided you need cancer cover.
You haven’t shared this with the advisor, and when he looks at your situation, he thinks you need life cover. You get miffed because he’s trying to sell you life insurance and assume he’s looking after his interests – not yours.
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