Buying and Selling — Life Insurance

Buying and selling are two different, but simultaneous activities arising out of a single act and as a single ‘event’.

They are different because of the individuals involved are of different characters and ‘act’ with entirely different psychological attitudes.

Unfortunately, more often than not, there seems to be a semblance of ‘mistrust’ peeping in between the two facets of the ‘act’ – again a psychological aspect. The seller ‘feels’ that the buyer tries to bargain at the lowest offer and thereby dent into his higher profits, where as the buyer ‘feels’ that the seller usually quotes a higher than the ‘just’ offer and deprive him of the best offer.

The ‘sale event’ starts with the seller taking on the process. Many times, the sale event starts with the buyer approaching the seller for the buy and finishes it by ‘deciding’ and completing the buy and thus completes the ‘sale event’. In other words, and in either way, the sale event is complete only with the ‘buying’ part, which again means that the seller’s intention to ‘sell’ is successful only when the ‘buying’ part is complete.

That is why and how the buying process becomes the pivotal issue and the buyer becomes the most important person in any process of a ‘sale’ and in the market. And, that is why every seller considers their buyers as very important persons in the entire sale event and start learning more about them (their customers) and their behavioural patterns and their buying habits and their buying psychology.

The knowledge of a buyer’s psychology tends to help to decide the seller’s approach in successfully completing the sale event. Since each person is different his or her psychological behaviour will also be different and naturally the sellers’ approach to each person should also be different.

It is interesting to note that even in ‘essential’ buying (like buying food or drink or shelter or clothes) the buyer expresses certain preferential aspects, like place of purchase or time of purchase, or many times prefers the seller also. In other words, some buyers may tend to prefer certain ‘types’ of sellers only. Such a preference suggests that the personality (which includes the psychological or behavioural traits) of a seller also influences a buyer’s decision to buy.

In other words, apart from the knowledge of the buyer’s psychology, the ‘personality’ or the personal traits of the seller also tends to help success in the sale process of the seller.


Tangibility of the goods or services is, though, an immediate factor that draws the buyers’ attention to their buying decisions and encourages the speedier buying decision. Such a tangibility may be the naturally existing sensory tangibility or by an artificial augmentation of certain aspects of the product or service,

And, more than often a buyer’s faster decision to buy a product or service occurs mostly on the immediacy of the need for the product or service rather than on the ‘tangibility’ of the product or service. In other words an immediacy felt by the buyer is the second dimension of the tangibility factor in the buying decision.

Further, there is yet another factor that favours a buying decision is the third dimension of the tangibility factor – namely the tangibility of the seller (transparency?) and his / her personality. Even in the case of a tangible product of consumption – a routine and daily product of consumption – the buyer will prefer the seller whom he ‘believes’ as true to his (the seller’s) words and intentions.

The buyer is always eager and keen to ‘feel’ a sense of ‘trust’ from the seller in his buying decision even for a very common and off- the- hand purchase of a pedestrian nature.

Convincing the ‘sale’ to fit to the need of the buyer – with trust – is a very tactful exercise on the part of the seller and it should neither be emphatic nor meandering. It should not be rushed through nor delayed. It should not create a strain on the listening process of the buyer. In fact, it should effuse untainted trust and sanctified sincerity. And, all these particular characteristics in selling take greater and deeper important dimensions – importantly – in case of selling intangible services.

Intangible services again are of many types mainly depending up on the time and the extent of its (service) experience by the buyer. Some services yield immediate experience, some services offer a distant experience while some others give experience to the buyer on a very long-term basis – or prolonged experience.

Hospitality at restaurants, holiday tour packages and life insurance benefits are the few examples, respectively. Because of these time-lags between the points of purchase of the service and the point of the experience of the service, the ‘trust’ infused and embedded initially in the mind of the buyer by the seller weakens.

That is why the modern sellers of such services try to keep in touch with their buyers (customers) as reminders of or to make them (the customers) reminisce their experience of the buy. The longer the requirement in the cases of prolonged experiences of the buy – like in life insurance – there seems to be a dire need for the sellers to resort to newer and innovative methods of keeping in touch on a long term basis, with their buyers.

Long-term relationship:

Even at the sale-point, long term sales differ in content and process – especially of intangible services, like life insurance.

People mainly tend to postpone their buying decisions in respect of sale approaches  where under the points of experience of the purchases are far off in time from the points of the sale offers – like in life insurance.

In most of these cases – the buyer is not sure of experiencing the benefits of purchase by his / her own self and in person, as the time lag is long and the actual point of performance of the service by the seller and the actual point of experience of the service by the buyer is not known a-priori either to the seller or to the buyer.

There seems to be an under-current of a feeling that he / she is ‘buying’ with seemingly no return, at all. While most of the other purchases give the buyers an immediate physical or psychological feel of return, the long term related purchases (ex.; life insurance) do not provide this ‘feel’.

Further with a vast and sophisticated expansion of the financial markets and instruments and with attractive financial returns, the charm of life insurance as a tool of “financial asset formation” assuring a certain ‘financial estate’ at a future stipulated date may not some times attract buyers.

Life insurance as a ‘savings instrument’ and dubbing the vested bonuses accrual as the part of ‘returns’ on the premium payments made by the buyer may not also, some times, appeal to the buyers.

It must be noted that ‘savings’ concept can no longer be a selling point for a life insurance seller, despite the fact that the highest incidence of savings in the Indian context, as the liberalization of the financial markets has many more attractive forms of savings with comparably higher rates of returns on ‘savings’ of the common man.

It is worth to note the observations made by Martin Muhliesen on the status of the household savings in pension and life insurance in India.

“In India, unlike other countries, the share of major instruments for long-term household saving-pension and life insurance- in gross financial saving has stagnated over the past 30 years. By contrast, mutual funds had growing success through the early 1990s, particularly after the sector was opened to competition from the private sector.” 1

Thus, the newer formats of savings are diluting the meaning of savings through life insurance.

Further, the globalization of the insurance industry in the recent past has made the prospective buyers of life insurance understand and realize the trends elsewhere in the markets of life insurance and adapt themselves to the venues opened up by the foreign players in the markets. Likewise, both the old and the new generations of sellers of life insurance are also adapting themselves to the new techniques of the functioning of the products of life insurance – insure the risk and invest the rest.

Today, the life insurance buyer’s psychology seems to swing between the two ends of the decision line of the no-return pure risk instruments and the high return growth-linked plans.

On the sellers’ part the approach has necessitated them to make ‘merit lists’ of the myriad available growth-based and growth-linked instruments in the markets and place the life insurance sale in the right perspective to juxtapose the needs of the prospective buyer.

And, this needs greater skills in communication than required hitherto.

Communication contract:

As we know, any sale event starts with an offer and an acceptance by the two or more parties involved in the event. In other words, a communication process starts.

The length, width (wide range) and strength of the communication process depend up on the type of the sale and sometimes on the parties involved in the sale – that is on the psychological aspects of the parties.

Under normal circumstances, the communication process is the shortest in the case of purchase of the most essential products or services – like food, clothes and travel sojourns. And, it is the longest in the case of purchase of financial utilities and investments, which are especially intangible services.  Perhaps, a life insurance sale takes a much longer than any of the longest communication process sales and more often than not in several steps and cycles. This is because of the buyer’s decision process tends to be a long drawn and hesitant one in nature.

Apart from being intangible in subject and substance, the life insurance sale is also quite different from all other intangible sales of services like bank services, hotel services, leisure travels and tours and other leisure services.

However, in many of the later mentioned intangible services and products the buyer ‘sees’ some semblance of ‘tangibility’ of the services or the products in the physical experiences that go with the said services or products. For example the physicality of the beautiful and enjoyable locations provides the tangibility to the joy experienced in the picnics and other pleasure services that are paid for by a buyer.

Similarly, the physical feeling of the coziness and that comfort of the vehicles provide the physicality and tangibility to the experience during travels and journeys paid for by the buyers. The ambience and the civility in an eatery provide the physicality that is the tangibility to the experience to the buyer, and where as in the case of banking services it is the promptness and the correctness of the services that provide the required physicality.

In all the examples cited above the ‘services’ rendered by the sellers are intangible in nature – but the buyers assess them tangibly by the physicality of  ‘fringes’ and  ‘facades’ the services adorn. And, many times these so called fringes and facades become the physical (tangible) features referred to as their selling points by sellers of the intangible services under reference.

Further, the outcome of the buy is almost immediate and experienced just as in the cases buying of the tangible and essential products. The time lag between the promise and performance made by the service provider is short and the wait by the buyer for its experience is also considerably short.

It can be clearly seen that all these physicality features, fringes, facades and immediate experience of the performance of the promise made are either absent or obscure in the case of a life insurance sale event. Naturally, the buying psychology gets impeded by the said absence or obscurity of the physicality mentioned.

Therefore, it becomes imperative on the part of the seller of life insurance (the Agent) to provide ‘some’ features of physicality – during his several approaches he or she makes – to the prospective ‘buyer’ and give assured signals of the said physicality features during his conversational communication spells.

The two main reasons for the dilemma in the mind of the prospective buyers delaying their buying processes and decisions could be the sincerity in the seller’s approach which is basically concerned with the secured financial ‘future’ of the buyer and the likely long-standing ‘relationship’ of the buyers with the sellers and or the product.

The buyers also lurk with a dilemma whether the present financial and other socio-familiar status will continue to have the required sustained status, quid pro quid, on which the sellers seem to build the soundness of the buyers’ economic future.

Is there a single solution to these predicaments the seller faces in this regard and in respect of the ways and means of providing physicality features to an abstract and intangible sale?

Physicality, as we know, is adducing physical aspects to an otherwise non-physical aspect or an incomprehensible concept or idea – like life insurance. May be each agent takes his own individual and creative steps to create his own physicality features to his sale proposal.

Whatever may be the voluntary steps an Agent takes to create these physicality features to his sale approach the one involuntary ‘physicality feature’ the Agent would clearly exhibit is his ‘own attitude’ towards the whole issue of the sale event and towards the prospective buyer.

It is needless to say that the sellers’ attitude towards his profession of selling life insurance will certainly and discreetly be exhibited in their intensity of real involvement in their styles of sales approach and intensity of real interest towards his prospective buyers.

Every intending buyer expects to see – tangibly – a clear vision and expression of this attitude in the Agent, which alone would help lead him or her – the buyer – to a step nearer to the buying process and decision. We can observe that most of the successful Agents exhibit immense and intense involvement and carry the right attitude towards their profession of selling life insurance – more as a job of service to the buyers than as a job to serve the buyers.

After all, attitudes define persons and their motives and honesty and genuine feel but not their skills, knowledge or talents.

Thomas Carlyle rightly said: “Attitude is the first thing that people notice about a person. Your attitude can affect the whole way in which they perceive you, regardless of your talents.”

By: G. N. BHASKAR RAU, Former Research Associate and Faculty, N.I.A., Pune, Published in Life Insurance Today, February, 2012

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