The reality is most of us do not wake up and suddenly have the desire to spend money on life insurance and here are some reasons why. For one, life insurance is an intangible and complex product that can be difficult for many to understand. Secondly, it is the sheer nature of insurance that people just do not like thinking or talking about the possibility of death occurring (which is the only certain thing about life). Finally, most people will rather postpone the decision to buy life insurance till a later date; assuring themselves that a loss (death/disability) will not occur anytime soon. When one puts all these considerations into perspective, it is no wonder that there must be a process of convincing to point consumers attention to their needs and justify why the purchase of life insurance must take place now! That is why we all know of common saying that life insurance is most frequently sold and not bought.
What is interesting is that we see changes in insurance consumer behavior that reflects the term "prosumer" which was invented by Alvin Toffler in his 1980 book “The Third Wave.” A prosumer is a very active consumer who blurs the lines between professional and amateur and controls information flow, the experience and, even, the sale. This is only possible because of easy access to information that translates to informed decision making.
Theory in economics tell us that there are several nuanced styles of demand. It is dictated by the nature of a product and it is the manufacturer’s job to cultivate demand, manage demand or both. Historically, creating demand was in the hands of the insurance agent alone, which was part of the sales process. Today, because of the prosumer’s new capability, the role of demand creation and the sale are now decoupled.
If you are still thinking nobody wants life insurance, let us look at a 2014 study by LIMRA and Maddock Douglas. It was revealed that there are almost 19 million “stuck shoppers” (people who intended to buy but the existing experience caused them to get stuck along the way) for life insurance. Therefore, the role now for insurers and insurance agents is not only to cultivate demand, but to deliver better on customer experience.
The insurance industry is evolving, not to mention the paradigm of "sold, not bought". Today, insurers & insurance agents are transforming themselves to seize this opportunity. For us at Insuree, we are positioning ourselves to be the key driver for better customer experience, reinventing the agent role and delivering a streamlined distribution channel for insurers.