One of the big reasons why I started this blog was because it just seems impossible to find honest, objective information about insurance policies. When I go to the garage, I always keep in mind a doubt that what they’re telling me needs to be repaired is not actually broken but that the guy simply needs a few more dollars to reach his objectives. How could I know? Same thing when I go shopping for a tv and the sales guy tells me that this new technology makes a world of difference. It becomes very difficult for me to know because I know that they have an incentive to complete a sale.
There are a few circumstances where I know the person in front of has a strong incentive to sell rather than give me the honest truth. Insurance sales guys come at the very top of my list. Why?
-Insurance tend to be complex
-It’s very difficult to determine our actual insurance needs
-Insurance brokers are generally paid only based on sales giving them the ultimate motivation to sell at all costs
-Selling insurance is most effective when the potential buyer is reminded of everything that can go bad in his life, thus becoming a very emotional meeting..I mean, who wants to think about becoming disabled, being diagnosed with cancer, the death of family members, etc?
Honest Brokers Would Not Do Well
I think a huge problem is that an honest insurance broker or sales guy would probably not be that good at his job. It’s unfortunately often like that. I would bet that the insurance guys bringing in the biggest numbers are guys that are able to get their clients to buy a bit more than what they really need or want. In the case of insurance, it becomes a very costly choice of course because you end up paying that amount every month, for several years or even longer.
The Only Way This Could Be Done…
I think the only way you could find an honest insurance sales guy would be to hire someone that:
-charges an hourly or fixed fee
-is not being paid any cash incentives by the insurance companies (or any other compensation)
Those types of people do exist of course but they are rare because its so much more profitable for those agents to only get a sales commission…