Maslow’s Hammer

American psychologist Abraham Maslow famously stated,

“I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”*

This idea—known as Maslow’s Hammer or the Law of the Instrument—describes a cognitive bias where people rely too heavily on familiar tools or approaches, even when they may not be the most effective solution.

While Maslow wasn’t talking about life insurance in his 1966 book The Psychology of Science, the analogy fits perfectly today. In our industry, the Hammer is swinging wildly depending on who’s doing the talking—and clients may be getting advice shaped more by bias than by their actual needs.

Here are a few common Hammers we see in the marketplace:

• Buy Term and Invest the Difference Hammer – This Hammer insists permanent insurance is never needed—not for wealth replacement, long-term care, liquidity, or anything else.
• Whole Life Hammer – This Hammer believes whole life is the only solution—coincidentally, it’s often sold by agents who represent insurers specializing in whole life.
• Indexed Universal Life (IUL) Hammer – This Hammer claims IUL is the answer to everything—protection, retirement income, and more. In a marketing world where bold claims and aggressive illustrations win, this Hammer swings hard.
• Guaranteed Death Benefit Hammer – This Hammer doesn’t trust insurers and prioritizes guarantees—often at the cost of flexibility or increased premium.
• Single Insurer Hammer – Agents tied to one insurer can only swing that insurer’s product Hammer—limiting options from the start.
• Anti-Markets Hammer – Agents without a securities license can’t offer variable universal life products, so they stick to term, whole life, universal life, and IUL— dismissing market-based solutions simply because they can’t offer them.

Whether it’s a fervent product bias, a licensing restriction, or an employment contract limitation, if you or your clients are getting advice from someone who isn’t a securities-licensed independent insurance professional representing multiple insurers, you may be getting hammered—literally.

Key Takeaways

• Don’t let Maslow’s Hammer shape the advice you receive.
• It’s okay to ask about other products and weigh the pros and cons for your specific situation.
• There’s no one-size-fits-all solution in life insurance.

Download our one-page overview of permanent product types to see how different options stack up.

*Source: The Psychology of Science: A Reconnaissance, 1966 – Abraham Maslow

Any examples included are hypothetical and for illustrative purposes only, individual results will vary. The material is for informational purposes only and is not intended to provide specific advice or recommendations for any individual nor does it take into account the particular investment objectives, financial situation, or needs of individual investors.  Colton Groome Insurance Advisors does not provide tax or legal advice.  The material is not intended to provide and should not be relied on for tax or legal advice. Any information contained herein is of a general nature based on the information that has been provided to us. You should seek specific advice from your tax or legal professional before pursuing any idea contemplated.