Assignment: THE LIFE INSURANCE GAME
Peggy Ewen sat back in her chair and listened as Tom Pitman tried to explain. "I don't know what's going on," Tom said. "I have no trouble making the phone calls, and I seem to be able to set up in-home visits. I am making at least as many visits as anyone else in the office. For some reason, though, I cannot talk them into buying the product. I seem to be unlucky enough to have run into a lot of people who just are not interested in life insurance." Peggy thought about this. Tom had been with the company for five months now. He was bright and energetic. He had gone through the training program easily, and had appeared to hit the ground running. His paperwork was always perfect. For some reason, though, his career selling life insurance was virtually stalled. His sales rate was only one-third that of the next best salesperson. Why?
Peggy asked, "How do you feel about going to the in-home visits?" "Fine," Tom replied. "Well, I'm starting to feel a little apprehensive about it just because I'm becoming less sure of myself." "Well, that's something we'll have to work on. But how do the visits go? What do you talk about? Tell me what a typical visit would be like." "Let's see. Usually I'll come in, sit down, and we'll chat briefly. They'll offer me a cup of coffee. After a short visit, we get right down to business. I go through the presentation material provided by the company. Eventually we get around to talking about the reasons for purchasing life insurance. I really stress the importance of being able to make up for the loss of income. The presentation material stresses the idea of building up savings for sending kids to school or for retirement. You know, the idea of being sure that the extra money will be there down the road. But I really don't think that's why most people buy life insurance.
I think they buy it to be sure that their family will be able to make up for a loss. For just a small premium, they can be sure that the loss won't happen, or at least they can minimize the loss." Peggy seemed interested in Tom's account. "So you really stress the idea that for a little bit of money they can insure against the loss of income." "Yes," Tom answered. "I'd rather have them look at life insurance as protection against a potential loss, rather than as a savings mechanism that would provide some sure amount in the future. Most of them know that there are better ways to save, anyway." "And how would you classify your typical client? What kind of income bracket?" "Mostly young couples just starting out," said Tom. "Maybe they've just had their first child. Not much income yet. Not much savings, either. We usually discuss this early on in the conversation. In general they seem to be quite aware of their financial situation. Occasionally they are even quite sensitive about it." Peggy looked at Tom and grinned. "Tom, I do believe that there's something you can do right now to improve your sales rate."
Questions
1. About what issue is Peggy thinking?
2. What are the implications for people interested in selling financial securities such as insurance, annuities, and so on?
3. What are the implications for their customers?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.