The critical illness industry has “screwed up,” over the past 20 plus years, by not selling the product correctly, a speaker said Tuesday at a LIMRA-sponsored conference.

All kinds of money and time are spent on product development, technical resources, filing with regulators, and marketing critical illness insurance but then upon release, there are no sales, said Kenneth Smith, director of health product sales at Assurity Life, at the conference in Orlando.

“[Selling] critical illness takes a lot of work. It is not easy,” Smith, who is also president of the National Association for Critical Illness Insurance, said. “How many carriers have introduced critical illness plans over the last 15 years and have no sales? It’s common.”

One reason for low sales distribution on critical illness product is due to sales training, or lack thereof, he said. Quoting Joe Gandolofo, who in one year in the 1970s sold more than $1 billion in life insurance, Smith said that selling is 98% understanding people and 2% product knowledge.

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But, in the last 20 plus years, the critical illness industry has focused almost entirely on product knowledge and not the human. “That’s not to say product knowledge isn’t important,” Smith said. “But you have to understand human beings first.”

“Product managers who forget about training salespeople,” Smith added. “They end up getting fired; you don’t want to have that happen.”

The right sales method

No one wants to buy critical illness insurance, Smith said, but what they do want to do is solve a problem. Therefore, critical illness insurance needs to be presented as a way for a client/prospect to solve a problem.

Salespeople have to tailor the message to a prospect and ask questions that only elicit a wanted answer. “It is all about leading with the question,” said Smith. “The secret is questions that lead to internal motivation.”

Also see: How to avoid FMLA interference liability

Smith shared four secrets that critical illness insurance salespeople should ask:

  1. Do you know anyone who has had a critical illness? “Everyone knows someone who has had one of those conditions,” Smith said. “When they answer, they think of a person close to them, so they become emotionally involved.”
  2. Did they plan on it? No one plans to have cancer, a heart attack or a stroke, he said.
  3. Was there unplanned emotional or financial stress on the household or business? Smith said that 99.9% of the time with a critical illness, there is financial stress and 100% of the time there is emotional stress. “The magic of what critical illness insurance does is … you can reduce that financial stress and if you reduce financial stress, it also reduces emotional stress,” he added.
  4. Would cash have helped? The answer is always yes, Smith said.

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