4 Insurance Agent Myths People Still Think Are True

Fran Majidi
January 23, 2020
Insurance Agent Myths

It’s important to understand what people believe in order to break through and sell as many policies as possible. There are some myths floating around out there, which aren’t very helpful to those of us in the insurance business. You need to know what these myths are so as to overcome them. We’ve rounded up the most important four myths that may be hurting your bottom line.

Myth #1 The Prospect Has No Idea What They Need

This is a myth that many insurance agents still believe. It may have had some credence in the past but today’s shoppers are different. Millennials have changed the way insurance is bought . Millennials are bootstrappers, by virtue of circumstances that have shaped their worldview. Most of them will do some thorough research before contacting an agent, so be prepared for an educated conversation during which you may feel a bit drilled. They often show up pretty well-versed in insurance terms, policy coverage limits and more. Don’t be put off by this. The millennial is a questioner and will challenge you in order to make sure he/she is getting a good deal. Charm them by attempting to forge a mutually beneficial relationship that can put their worries to rest. 

This myth also doesn’t apply to decision-makers coming to you for commercial insurance. Not only are most commercial insurance buyers well-researched on their needs, but they may be contacting you during the later parts of the decision-making process. Many insurance agents fail to close commercial deals because they skip the necessary research before meeting a prospect. It’s important to understand the level of exposure that particular business faces day in and day out before having a meeting.

Myth #2: You Need to Generate Your Own Leads

There’s a lot of misinformation being thrown around to make this myth sound even more true. For instance, you may be hearing that “organic leads are superior” or “if you’re any good you don’t need to buy leads.” Organically generated leads are great, but that doesn’t mean that leads you buy weren’t organically generated, only that they weren’t organically generated by you. When you consider the marketing costs associated with generating your own leads, you’ll begin to appreciate what you’re paying for if youbuy leads from a reputable insurance technology company

There’s no way around it: At some point you’ll have to make a decision. Will you invest in blogging, social media and paying influencers or will you just pay someone who’s already doing it to generate leads? Do you want to spend hours staking out new territory to shake each prospect’s hand or will you just try to make an authentic connection over the phone? The choices are simple enough but you’re shelling out money whichever direction you choose to go.

Also, don’t forget that leads generated by the right ads do work too. The quality of these leads depends on the quality of the ads and the process used to convert users into leads. With that said, if you buy insurance leads from a company with a strong advertising campaign, you don’t need to worry that their leads are not “organically generated.”

In the end, it doesn’t matter how a lead lands in your lap if you’re closing more business than ever. Selling insurance is largely a numbers game, and you’ll want to reach out to as many people as you can without going over your marketing budget. If that budget is heavily reliant on purchased leads and this strategy works for you, there’s no shame in your game.

Myth #3 Selling Insurance Is All About Sales

This is probably one of the most common myths that causes the best candidates to back out of a career in insurance. Even though you have to close deals, as you would with any other service or product, there is something intrinsically different about selling insurance. As an insurance agent, you are selling a sense of security for individuals, families and communities. That’s very different from other types of sales.

The best insurance agents are able to earn the trust of their clients in order to give proper guidance on how to protect livelihoods and futures. More than anything, being an insurance agent is a job for people who are good at forming honest relationships. Listeners make the sharpest insurance agents and producers so there’s no need to be slick.

Because people wrongly assume that insurance agents are natural-born salespeople, agents often have to work that much harder to prove they’re reliable and honest. That’s why a gentler approach is often more forceful than pressuring prospects into a commitment.

Myth #4 Buying Insurance from an Agent Is Expensive

Many carriers won’t even deal directly with a client. Usually, they sell policies through their own agent or through an independent agent who sells products for several carriers. For good or bad, agents are the gatekeepers.

What’s funny about this myth is that it couldn’t be farther from the truth. Insurance agents earn a commission but they are actually free. They do not even have very much leverage in terms of pricing products either.

You’d be surprised how many people contact carriers directly to buy a policy, thinking that they have to pay extra for an independent agent’s services. This is important to note because if you don’t explain that insurance agents work on a commission structure early on, you may lose that prospect. Explain that they’ll be offered the same pricing, whether it’s through you or any one else selling that particular product through the carrier.