As a member of LIMRA’s Producer Panel, I am “privileged” to regularly participate in industry surveys. The most recent such was about long term trends in the term life insurance market.
LIMRA (the Life Insurance Marketing and Research Association) is essentially an insurance industry “think tank.” I’m not really sure what criteria it uses to select those who are asked to serve on the Producer Panel, but I did get a nice pen, and first dibs on the results of its research.
Term insurance is the most widely-sold life product, most likely because it is – at first – the least expensive. It is analogous to “leasing;” rates are locked in for a specified length of time, and there is generally an option to purchase (convert to a permanent plan) at the end.
The results of the survey to which I alluded are quite interesting. Almost 500 of my closest colleagues and I were asked a variety of questions about selling term life insurance. About 95% of us sell individual term products (are the other 5% liars, or just different?). On average, we sell about 30 such policies a year.
More than 8 in 10 of us consider term insurance “easy to sell.” I suppose it depends on one’s definition of “easy:” as opposed to what?
In our meetings with clients, most of us talk about income replacement. That is, how will the family meet its financial obligation absent mommy or daddy’s paycheck. Although we also discuss estate planning and the kids’ college funds, apparently few of us bring up critical illness plans or charitable giving.
I was pleasantly surprised to learn that most of us do an FNA for our clients. Financial Needs Analysis can be as complicated as advanced computer modeling, or as simple as a pencil and legal pad (my preferred mode). Regardless, it means that we’re not just picking numbers out of thin air, but actively engaging our clients in the process.
In the “Not Sure What To Make Of This” Department, it appears that 51% of the individual life policies we sold last year were term.
As an independent agent, I can sell policies from most any carrier. But, like most of my colleagues, I choose to regularly do business with only a handful. According to the survey, agents’ top two criteria for selecting a primary carrier are “competitive price” and “excellent financial ratings.” I find that interesting, because my top two were underwriting and finances. Live and learn.
I’m not really sure what, if any, lessons to take away from this experience. If nothing else, I am heartened that so many of us take our roles seriously, as evidenced by the ubiquity of financial needs analysis, and emphasis on carriers' financial strength.