We were just discussing our past work-ex in the office when the question cropped up: what is the most difficult thing to sell? Luckily we have people coming in from various industries so it turned out to be very interesting and informative discussion. There were some who believed FMCG offers more challenges than any other sector and some thought it was telecom but finally there was a consensus as to one of the most difficult things to sell is LIFE insurance. This discussion made me thing as to why it is tough to sell life insurance compared to any other product or any other insurance for that matter?
I remember reading somewhere that insurance is one such industry which runs on the mutual ignorance of both, buyer as well as the seller. If the buyer knows that he is not going to die in the next 20 years he will not take insurance for the next 20 years and if the seller knows that the buyer is going to die tomorrow then he will not sell it to him. Since both are not sure as to what is going to happen in future they enter into contract of insurance. So the basis of contract itself is the mutual ignorance of people entering into it!
Coming back to the selling part of it as to why it is so difficult to sell, especially in India where the percentage of people having life insurance is minimal compared to other countries where celebrities have insured right from legs to chest hair to butts to middle finger to semen and what not! Talk about niche markets in insurance! I feel the factor playing a major role in it is our optimistic nature. An average Indian feels so positive about himself and things around him that the fear of sudden death rarely crosses his mind (this is despite all the bomb blasts in trains and buses. Even when there are blasts you would see these same buses and trains going jam packed the very next day). And there are some orthodox people who are just not convinced about ‘profiting’ out of death as they believe whatever happens is destined and things finally will fall in place with or without insurance.
People have always preferred investing somewhere where they would get reasonable returns and that is where term insurance loses ground. As the term insurance does not give any returns though it gives maximum life coverage (actual objective behind life insurance). The issue is that whatever few people are buying life insurance are going in for products which give returns along with life coverage and in the process they are jeopardizing the future of their families.
Some seriously innovative ideas are the need of the hour to drive home the point that insurance is a must. And if we manage to do this, may be few years down the line insurance will be one of the easier things to sell! One thing that we can do is providing special tax benefits to people who buy TERM insurance as incentives never fail to motivate people whether they are selling or buying!
I remember reading somewhere that insurance is one such industry which runs on the mutual ignorance of both, buyer as well as the seller. If the buyer knows that he is not going to die in the next 20 years he will not take insurance for the next 20 years and if the seller knows that the buyer is going to die tomorrow then he will not sell it to him. Since both are not sure as to what is going to happen in future they enter into contract of insurance. So the basis of contract itself is the mutual ignorance of people entering into it!
Coming back to the selling part of it as to why it is so difficult to sell, especially in India where the percentage of people having life insurance is minimal compared to other countries where celebrities have insured right from legs to chest hair to butts to middle finger to semen and what not! Talk about niche markets in insurance! I feel the factor playing a major role in it is our optimistic nature. An average Indian feels so positive about himself and things around him that the fear of sudden death rarely crosses his mind (this is despite all the bomb blasts in trains and buses. Even when there are blasts you would see these same buses and trains going jam packed the very next day). And there are some orthodox people who are just not convinced about ‘profiting’ out of death as they believe whatever happens is destined and things finally will fall in place with or without insurance.
People have always preferred investing somewhere where they would get reasonable returns and that is where term insurance loses ground. As the term insurance does not give any returns though it gives maximum life coverage (actual objective behind life insurance). The issue is that whatever few people are buying life insurance are going in for products which give returns along with life coverage and in the process they are jeopardizing the future of their families.
Some seriously innovative ideas are the need of the hour to drive home the point that insurance is a must. And if we manage to do this, may be few years down the line insurance will be one of the easier things to sell! One thing that we can do is providing special tax benefits to people who buy TERM insurance as incentives never fail to motivate people whether they are selling or buying!
Great Blog dude.. !! You are right, we are in dire need of innovative ideas to help promote Term Insurance. Importantly, our mindset needs to change, and the brand that changes it, will eventually make billions !! <-- Hey, thats one helluva business idea :)
ReplyDeleteMy first investment of this year would be to take term insurance for sure.
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