Internet-based Research: The Biggest Trend in Life Insurance
Canada Life recently announced that they now sell “non-face-to-face” life insurance. This means that life insurance policies can be sold without actually ever seeing the client. This reinforces the biggest trend in Canadian life insurance – the move to internet based selling and non-face-to-face selling where the broker does not meet directly with the client. The whole process is completed using the phone, email, and courier/mail. Electronic signatures are also starting to make their way into the process with Empire Life’s new system.
This Style of Life Insurance is Far from New
Speaking as one of the pioneers of “non-face-to-face” life insurance (starting back in 2001), I feel it has taken too long for these companies to catch up. For the first three years of operating under this business model, I met with insurance executives to convince them of the merits of the internet – explaining how much my clients appreciated the convenience of it. Check out our testimonials to see how it has been received.
What Does This Mean for Canadians?
It is becoming difficult for brokers to justify the cost of driving prospective clients to conduct the initial interview. It is much more efficient to first find out about their insurance needs and generate ideas. By the old method, collecting this information and passing along applications was a very time-consuming process (for both the broker and the applicant). Consequently, many Canadians who need life insurance never speak with an agent and go significantly under insured.
Non-face-to-face Is More Efficient
The non-face-to-face process we have used for over ten years is efficient, as it concentrates our time on getting to know our prospects over the phone. Our experience is that we come to know people better than we used to, since we have several conversations over a number of days as we present ideas and modify them based on feedback. Our clients also do not feel the same pressure as they did when we used to have one visit during which there was a bit of an understanding that they would buy something – they retain more control. We are also able to accommodate the smaller sale – what is important to us is that people who need life insurance can purchase it through us regardless of the premium amount.
The Process Continues to Evolve
Over the next year, we will see more companies offering web-based applications with electronic signatures so that we can complete an application online, have them sign it with an electronic signature, and get it delivered to them in days – not weeks. One company has offered an online process where we can have a policy issued and emailed to us while the client is still on the line (provided they answered “no” to all the questions). This will become more common and we will see many policies being issued in a day or two compared to several weeks or months that happen now.
The use of electronic applications that are forwarded to the paramed company (the nurse who visits with you and takes the blood pressure and answers questions) has also started. They bring their iPad and fill in all the questions on their iPad, have you sign it with an electronic pen, and it is transmitted to the company – all without paper.
Beware of In-House Licensed Agents
The danger is that eventually large businesses, banks, and insurance companies have started to sell directly from their websites with “in-house” licensed agents. This will limit the ability of consumers to compare prices and get the benefit of talking with an experienced independent agent to help them find the best product for the best value. They will only have what that company sells to choose from and will not appreciate that there might have been a better solution with another company.