“Insurance is Such a Scam”

That’s a term most of us have heard and maybe even said ourselves. Well, if it’s such a common phrase, we need to ask ourselves—especially those of us selling it—Is it true? And if it is true, am I selling a faulty product?

Over the past 18 years, I’ve sold different types of insurance. Currently, and for the past six-plus years, I have been selling travel insurance. In that time, I’ve come to the conclusion the difference between a person being happy with the insurance they purchased and a person being unhappy comes down to us—the people selling the policy. Literally. That’s it. Sometimes, I don’t think we realize how important we are. At the end of the day, how a person feels about their policy comes down to whether or not there are any surprises, their knowledge, and understanding of exactly what is in the policy—and that falls to us, the sellers.

What I’ve learned is that people who think insurance is a scam have experienced a surprise. They thought something was covered when, in fact, it wasn’t. We all know most people don’t have the time or interest in reading a 30+ page policy. They often assume insurance is insurance, and therefore anything unexpected is covered. We know that’s often not the case, and it’s up to us to make sure the consumer understands that.

Customers are more satisfied not even submitting a claim because they know the situation isn’t covered than a customer thinking something is covered and the claim being denied. Whether or not “insurance is a scam” actually comes down to the agents selling the policy. If we impart knowledge of the policy, explain clearly what is covered, and, even more importantly, what isn’t covered, we will minimize there being any surprises. The person may wish they had taken out a policy with more coverage, but they won’t be upset at either you or the insurance company, and they’ll have learned for the future.

My advice to all agents and people selling insurance (or anything, really) is to do your absolute best acting more as a teacher of insurance and not as a seller of insurance. Don’t only highlight the things that are covered in the plan but also clearly explain what the policy lacks. Let them decide what makes sense for them in terms of coverage and price. Anyone can talk themselves or other people into enough worry to think they need to overspend and cover every tiny detail, but insurance, like anything else, is a weighing of coverage and price. Let the customer decide where that happy balance is. We just need to give them the knowledge to make that decision. Your customers will appreciate you and your honesty for it. They will also realize that insurance is not a scam. It simply covers what it says it does and doesn’t cover things it doesn’t say it does.

Wishing everyone a Merry Christmas, Happy Hanukkah, and an amazing year ahead!