Growing Economy Creates Life Sales Opportunities: LIMRA

To penetrate this market, one must understand what is behind the reluctance to buy, Lombardi said. Many consumers do not have coverage, and many of those who do have only group coverage, which often is not enough, he added. The need is clear to consumers, yet it has not become a fundamental item. Part of the reluctance is the perception of priorities, he said.

"Its a product that involves persuasion that has to do with price," Lombardi said. "Its the issue of cost of coverage vs. the value." Consumers struggle with using limited funds for a product they feel they are not likely to need in the immediate future, vs. a product such as a college savings plan, from which they feel they are more likely to benefit.

Perhaps it is this perception that has caused life sales to stagnate over the last decade, but there are companies that have seen increases in premium and they have certain shared characteristics, said Elaine Tumicki, LIMRA corporate vice president, product research.

They have a diversity of strategy, she said, and a balanced portfolio of both variable and fixed products that have performed well. And, "whatever distribution channels they use, they pay attention to them," she said.

Whether they have affiliated or independent agents, the companies create special programs for them to "make sure the agents feel affiliated with the company, even the independents."

Another area for optimism is worksite marketing, Lombardi said. Nearly 20% of small employers and more than 80% of large employers offer voluntary life insurance to their employees. And, 30% of these employees elect coverage, according to LIMRAs statistics.

"Its a different sale for a different customer–the middle income market," Lombardi said. Part of the reason for the success in this sector is the appeal of payroll deduction.

Reproduced from National Underwriter Life & Health/Financial Services Edition, October 31, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.