Disclaimer: if you think that insurance is a scam, read no further please.

I spent about 6 years of my life selling insurance. I started clueless about selling, and along the way I learnt some useful lessons. 

One of them is, give people what they want, THEN what they need.

A little bit of technical background first. 

There are, broadly speaking, two reasons many people buy life insurance: for protection, or for savings. If an insurance plan is better for protection (called a term plan), it would not be good for savings. If an insurance plan is good for savings (called an endowment plan), it would not be much good for protection. 

(For the financially savvy reader, there are many variations of insurance plans which offer some protection and some savings, but I’m trying not to get into too much detail here. Please bear with me).

Imagine this scenario: a father of three kids, who was a sole breadwinner, had almost zero insurance coverage. If he died prematurely, his savings was not enough to provide for his family’s immediate, day-to-day needs for long. He really should increase his insurance protection, by buying an insurance plan.

What typically happened was that this father would meet me for a financial review. He wanted a savings plan for his children, to save up for their education. Unfortunately, with the limited budget he had, he could not do both.

Should I sell him the education saving plans that he wanted, or should I sell him the term insurance plan that maximizes his protection with the budget he had?

What I found out the hard way was that, when I stuck to my logic and my principles, and only recommended to him what he needed, like a good doctor, I would, more often than not, lose the sale. This father would just listen to my logic, and walk away, and find another insurance advisor who would be willing to give him what he wanted. 

What went wrong? I was professional, and I was right. I explained his situation and his needs to the best of my ability, but he went away and did the wrong thing! As a young advisor, episodes like this happened many times, and I was always extremely troubled by how illogical people are.

Only with hindsight and with more maturity, I can start to understand what went wrong:

1. Lack of trust: I may have looked impressive, sounded impressive, and had all the right qualifications, but he did not trust me enough to change his mind about what he wants. In his mind, I hadn’t earned the right to tell him what to do.

2. Lack of empathy: I came across as an expert in insurance and financial calculation, but not about his life. I know very little about his life, his family, his aspirations, his plans for his children, his pains and regrets. All I knew about him were some numbers on a form. How could he trust me to really offer the right advice for him?

3. Lack of flexibility: I thought about things in a binary way. It’s either allocating all his budget for protection, or all his budget for education savings. If he chose anything in-between, I would see it as a failure on my side.

If I can turn back time, I would probably give this father what he wanted, with a full explanation of the implications. If he bought my rationale, perhaps he would consider beefing up his protection when he had the budget in the near future. At the very least, I would have gained his trust, and I would have a chance to continue to influence him to do the necessary things for his family.

Although all this is past, I realize that these lessons apply to my business now too. These are the things I learnt:

1. Earn trust: Show all my credentials and track record to let my clients know that they are in good hands and that I know what I am talking about, but beyond that, show them that I have really helped people like them. Show them that I really care about them, not only about what is right.

2. Really, really listen: Listen to them. Understand their wants, understand their frustrations, their dreams, their limitations, without judgment or agenda. Listen until I can say, now I know why you make these decisions in your life.

3. Understand ego: We all have ego. We believe that we know our lives and our situations best. We want to do what we want to do with our money. It is not about what the experts say we need, it is what we want, from the bottom of our hearts. Persuasion with logic and facts only satisfy the mind, but it doesn’t open the wallet.

4. Understand emotions: We are emotional creatures. Many of us do things we know we should not do. A good teacher knows that he sometimes has to find funny, interesting ways to engage his students, to lead them to learn what they need to learn. The same principle applies in parenting and sales.

If you are like me, trying to get people to do the right things but always feeling frustrated, I hope that I have offered something useful for you.

Thanks for reading.