It's All About Need.

Life insurance sales happen by meeting a customer's needs, not by introducing "hot products."

How do you identify an outstanding life insurance agent? What are the qualities that set a great agent apart? Anyone in the life business asks or has been asked these questions. And we all have our favorite answers. Most of them--not surprisingly--probably bear more than a slight resemblance to the way we see ourselves.

But before we go too far congratulating ourselves, we should remember that life sales have been painfully flat over the past decade. There have been a few slight upturns, but nothing that deserves applause.

Why aren't sales keeping up with population and economic growth?

At least part of the answer rests with our products. In the early 1980s, highly competitive term life insurance products hit the market. Life agents were excited about the possibility of replacing older term products. It was a no-brainer: Low-cost policies drove out those with a higher price tag. We were happy because we were making money.

Then along came universal life, and another sales opportunity for agents. We all wanted to look as if we were part of the burgeoning "financial services" industry as mutual funds and other equity products were fast capturing consumers' fancy. They wanted to get ahead faster, and this seemed like the way to do it. Life agents spread out across the country selling universal life to new customers and to everyone with a stodgy; old-fashioned whole life policy.

All the industry hype aside, it was an attractive price that made these so-called "new products" appealing to consumers. The policies made it appear that the consumer was getting more for less. Universal life made a sales splash--until it all crashed in the late 1980s.

While adding value is certainly attractive to both agents and customers, there was a major downside to this product scenario. Perhaps the insurance companies were conscious of what they were doing--perhaps not. Either way, the result was the same:Agents' selling skills atrophied because price drove sales.

And while all this was happening, the public was getting acclimated to self-service everywhere they turned, from Wal-Mart to gas stations. What they learned was: Serve yourself and save. Based on ease and convenience, term-life insurance will probably sell well on the Internet in the next few years.

Selling life insurance became a process of placing the most attractive product in front of the consumer. It didn't require significant skill.

But what this means is that life agents were diverted from our industry's primary mission: meeting the needs of the consumer. Nothing else we do gives our occupation more credibility. And it disappears when we rely totally on the next "whiz-bang" product to drive our sales.

I have been told that Seiko, the largest watch company in the world, produces 3,000 styles of watches. That's an incredible number, to say the least. Why would any company want to manage such a wide product line? Maybe the Seiko people know something that we in the life insurance industry have forgotten: We are most successful when we focus on the customer. Seiko gives the customer virtually personalized choice.

Here's the point: Selling success is always satisfaction driven, not price driven. In the case of life sales, it means taking the time and making the effort to understand and analyze the needs of each customer and then structuring a program that meets those requirements.

This sounds so elementary--so obvious. And it is. But consider the alternative. While there are certainly places where self-service makes sense in our lives, how many times have you bought something you picked off the shelf and later discovered it was not what you wanted? It happened because the information you needed to make a correct choice was not available.

It is in the best interest of serious, competent and committed life agents that certain life products are appropriate for Internet self-service. Actually, this is helpful because it allows agents to position themselves as customer consultants. There are millions of consumers in all socioeconomic groups who want help with planning their financial future.

While selling may seem easier if we have "hot products' this is an illusion. Flat sales in our industry attest to that.

If we want to be successful, then giving full attention to customer needs is the solution. This requires taking your destiny in your own hands and not longing for the magic (read: lowpriced) product to hit the market.

Ronald D. Verzone, a Best's Review columnist, is president of United Underwriters Inc. of Exeter, NH.