Selling more insurance in a economic slowdown
The economy is predicted to become worse this year, but advisers should remember that insurances are also the most important when the economy is at its lowest.
Thursday, February 9th 2023, 12:21PM
by Kerry Meadows-Bonner
If predictions are right and the financial downturn comes into effect, it could largely impact the life insurance industry’s ability to sell products to consumers-especially new businesses.
With the predicted economic doom and gloom, advisers will be needed more than ever to understand affordability options for customers, new and existing during this period.
Partners Life chief operating officer Dan Walker says historically, economic downturns have had an opposite impact than expected, so consumers who retain their incomes behave differently compared to when the economy is confident.
“We tend to sell more business in tough economic times, than we would when consumers believe the good times will always continue, and when confidence and bravado is at its highest.
"It is still an optimal time for advisers to continue selling insurance.”
Managing director Naomi Ballantyne says if consumers are worried about the economy, advisers should be ready and willing to help ensure their insurance packages are up to date and fit for a purpose that can continue to the other side of a recession.
“It’s not the time for advisers to become reluctant to talk to those customers, in case customers want to cancel their cover. It might be the very decision they need protecting against the most.”
During an economic downturn, it is even more imperative to have support from advisers, especially in a claimable event during that period.
With the impact that the pandemic had on many, consumers were forced to realize the importance of health and how quickly things can change.
Walker says recessions focus people’s minds on the fact that their income is extremely important to their lifestyles, meaning they become more open to protecting it.
“Insurances are important when the ability to ‘bounce back’ physically and financially is at its lowest.”
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