Behavioural-economics would have us believe that people are much more motivated to avoid loss than achieve a gain. Daniel Kahneman makes that a central point of his thesis. It’s accepted as self-evident by nearly everyone in the life insurance business.
Accordingly it often forms the basis for their presentations. Life insurance, to some extent, defeats loss. Therefore people will be motivated to acquire it. Really!?
What if people don’t care? Or, what if they value gain and loss equally? What if people value wins more than they fear or care about losses?
It seems there is evidence to deny the loss aversion characteristic. In an article from Scientific American we see a discussion. Why The Most Improtant Idea In Beavioural Decision Making Is A Fallacy
It seems the loss versus gain idea is incomplete. Generally in the abstract people are unconcerned. If given an abstract choice between winning and avoiding loss they will choose winning. If you add aspects of each they may change their mind. For example, if losing $10,000 causes them to be thrown out of their home while $10,000 means a nice vacation they will choose avoiding loss.
It is not the win or the loss it is the comparative advantage of each.
More life insurance insurance will be arranged for those who present the cost of the loss objectively and also present life insurance values.
Many people have the first need and know the cost. Would they not be more motivated or at least less averse if they could see getting something of value too.
Help them see what life insurance does for them. Avoid the cost only approach. People like to win too and generally life insurance is presented in a way that the person who pays the bills gets little in the way of selfish advantage.
Most of all notice that owning life insurance lets you invest the rest differently. Life insurance is not entirely about what it is. It is about what it allows you to do because you have it.
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