There are certain insurances that we cannot do without and some that are illegal to do without. Homes, pets, cars, health, life, travel; the list goes on.
The insurance industry is a colossal worldwide money maker and those who work in insurance are motivated to sell. They do this through various techniques, many known to sales people the world over. I am not downing insurance here.
I have a lot of it and value it, but be careful when purchasing it as you may be subject to certain influences.
Here are some insurance sales techniques to watch out for.
“No” is not an answer
Insurance salespeople never ask “do you want this?” but “which do you want?” In this scenario, no just isn’t an option. They are assuming you are going for one of theoptions you have been presented with. You are more likely to buy.
Give less options
The more options that you are given, the less you will be inclined to buy. Say you are given 5 options on health insurance by a broker. Health insurance is confusing at the best of times, but you don’t have the bandwidth to deal with comparing 5 policies. The result is indecision and loss of a sale. Sellers like to keep it tight and close you
down to one or two options, reducing the overwhelm.
Pick the middle one
I recently got a dog and when looking into insurance I was presented with 3 options; Essential, Premier and Premier Plus. The lowest one, Essential, might give the impression there is something lacking, the Premier Plus is way too expensive, so you are kind of channelled into the middle one, which is the most profitable and the
one that is what they are looking to sell anyway.
Prioritize the fear of loss over the reward of gain
Our brains are programmed to avert risk and insurance is sold on the fear of loss. Instead of saying, “You’re getting amazing protection”, you’re thinking “You could lose €1,600 if you have to pay for surgery for a dog without insurance” Instead of saying, “This product will pay €50,000 in the event of a serious illness”, they say “This insurance will save you from financial loss over the long term if you lose your health and independence”. They create the fear and then save you from that fear with their insurance.
Scarcity
If there is a scarcity you will be more likely to buy anything, even insurance. Discount periods and special offers are great tricks to motivate people to purchase insurance within a time frame, because as we hear so much “when it’s gone, it’s gone”
Anchoring
If you see an advertisement for “Insurance from only €32 a month!” you are anchored into that figure and that it represents great value. But by then you are in the sales funnel and have been softened up by this headline figure. When you get into the negotiation about insurance purchase, all may not be what it seems and you end up paying much more than the good value figure which was anchored in your head in the first place.
Minimise the cost
“Insurance from as little as €4 per day, the price of a cup of coffee!” screams the headline. Sounds better than “only €1,460 per year” doesn’t it? So, keep your eyes and ears open when considering insurance.
The difference between women and men
In the month that we are celebrating International Women’s Day, I thought I would look at the difference in how women and men tend to deal with money. It is a well-known fact that women are from Venus and men from Mars, or is it the other way around?
While I am occasionally accused of being a great man for sweeping generalisations, I also have a bit of insight from 15 years spent sitting across the kitchen table from couples, helping them with their money.
While traditionally, men were the ones earning the money, that has changed dramatically in the last 30 years.
Men still see this as one of their central roles, and feel threatened, stressed and without purpose if this is not happening for them. This may also lead to conflict.
From my years helping those in mortgage arrears, it was plain to see that the loss of a job with the inability to pay the mortgage has a particularly destructive effect on men. It also frequently leads in no small part to relationship breakdown.
When it comes to budgeting, women are better at managing tight budgets but men obsess and fiddle with the budgets and spreadsheets more.
In general, men also take more risks with money. This shows both in the fact that they are more likely to invest money, and also more likely to take risks with these investments.
Curiously, they tend to blame others for financial loss.
Contrast this with women who, in general, blame themselves for financial loss and take more calculated risks. In keeping with the stereotypically more emotional way that women communicate, they like to make decisions by consensus or jointly and don’t like to go it alone.
Money is more a means to an end with women, and a means to attaining something more important, feeling guilty if they consider their own financial needs first. As I said earlier... Venus and Mars!
The smarter spender
Currently there are many people trying to get a grip on serious credit card balances.
I always say to clients that if you leave a balance on your credit card and don’t pay it off fully each month, you are the card company’s best customer.
They are like leeches, just bleeding you enough interest monthly not to kill you, but pushing much more serious problems down the line.
I spoke with a woman from New York yesterday and she recounted that 5-10 credit cards, all maxed out, is not uncommon there.
While we are not there yet in Ireland, it’s certainly not a direction we want to take.
One of the options to get back on track with your credit card is to move from your card provider to an 0% introductory offer with another provider.
Switching to a card with a 0% interest rate for 6 to 12 months, as is the case with the An Post offering, will give you a bit of time to clear the balance without incurring more interest.
- Check out the CCPC.ie website for details on who offers what in this area.
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