7 Common Insurance Myths and Misconceptions

Whether you’ve been a licensed insurance broker for years, or you’re a new to the insurance market, you may be frustrated by some of the myths and misconceptions about the industry.

Consider these seven myths – and the “real truth” . . . at least as we see it:

#1. Insurance is boring

In reality, the insurance industry is complex, with a diverse range of products and services.

Every client is different.

One size does not fit all; matching the right product and service to each client is a talent that brokers need to work hard to develop. There are also different market segments – individuals and families, seniors, businesses (small, mid-sized, and large).

To compete effectively in insurance sales requires a mix of skills, including social interactions with clients, prospecting, sales acumen, continual learning, and time management.

#2. Technology detracts from quality of service

Digital resources and processes don’t dilute the value that brokers offer. They streamline and positively influence the way you work. They make it easier to get things done.

Trust is still key to building client relationships – and to your success as an insurance professional.

#3. Brokers have to solicit friends and family

While many new brokers do start in the business by soliciting family members and friends, it’s not always the most comfortable situation – and it’s not necessary. There are many other ways to build your business

You can purchase leads online. You can exchange leads with other insurance professionals focused on a different market niche. (Maybe that P&C agent from your local Chamber of Commerce or Rotary group is getting unwanted health leads.) You can build a system to attract new prospects and customers through advertising.

Referrals and networking are great sources of leads, too.

#4. Costs are higher to use an agent because of commissions

Insurance costs are typically the same whether the carrier pays a commission to you or keeps it for itself. You can save your client time when you shop on their behalf.

The value-add you bring is a differentiator . . . and it doesn’t cost them a dime.

#5. Anyone can be an insurance broker

The truth is it takes a lot of time and training to become an insurance professional.

There are required exams and licenses to enter the field. Plus the state, federal, and professional requirements brokers have to meet annually – including ongoing education requirements. If you’re active in your local, state, and national trade groups (like the National Association of Health Underwriters), there may be other mandates, including a strict code of ethics.

#6. Most people buy online

While some individuals may choose to purchase their coverage online (like auto, home, or even life insurance), many still want and seek out the professional expertise of an insurance professional when it comes to the well-being of their family or employees.

A reliable coach to help sort out all of the available options is in high demand. For business owners, the wrong choice could cost a lot – both financially and in relationships with employees.

#7. Insurance agents are middle men

Insurance professionals are key players whose job it is to help individuals, families, and business leaders make sense of the complexity of the insurance system.

Good brokers learn about the needs of their clients and work to find the best plan to suit those needs and their client’s budget.