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Life insurance sales may be flat industrywide, but it hasn't been so at a number of insurers and marketers contacted by National Underwriter.
In these firms, the mood is upbeat, even feisty. The view is, if you're looking for life insurance sales opportunities, they're right here.
Some experts laugh at the notion that the early 2000s' recession has ended. Signs of a still sluggish economy are abundant, they say, and the stock market is still showing lots of volatility. But the worst of the recession is over, most concede, and life insurance sales should be, and will be, on the rise. The following present their case.
Even if the life sales outlook is flat based on industry trends, says Maria Umbach, vice-president-individual life product marketing at Prudential Financial, Newark, N.J., "we don't believe it, from the standpoint of opportunity."
If the industry applies its talents and resources in the right way, life insurance sales will soar once again, she predicts.
For example, Umbach notes that more and more visitors to the Prudential Web site have been asking to find an agent, especially since the huge insurer started using search engine optimization technology to drive visits to its site. These requests have more than doubled from the first quarter of 2003 to the first quarter of 2004, for example.
What's more, "we are seeing a lot of conversions to all kinds of sales, including life insurance sales." (Web site visitors request appointments online and then work through the Pru agent to buy their insurance.)
Marketers are following changes of this kind closely, viewing them as bellwethers.
"A lot of companies are lowering their rates on universal life polices that have contractual lifetime [no-lapse] guarantees plus extended maturity provisions," points out Eric W. Feller, a Scottsdale, Ariz., broker. That means this is "a very good time" for producers to review existing UL policies to see if the clients can take advantage of the lower rates and guarantees, he says.
The president of Brokerage Professionals Inc., Feller says premiums from his firm's life insurance sales are up "drastically" this year due to the new contracts. In one large UL case, the client is moving from paying $40,000 a year for an older UL to a new $32,000-a-year UL. The new policy has the same face amount but also has a no-lapse guarantee to age 100 plus extended maturity. "The client is thrilled," he says.
Agents should be looking at this, he maintains, because making such offers is often "definitely in the client?s best interest."
It's important to see the current life insurance market in context of the past, points out James Gelder, president of individual insurance and specialty markets distribution at ING U.S. Financial Services, Minneapolis.
In the late 1990s, he recalls, variable universal life was the most popular life insurance product, over whole life and UL. But when the equities market tumbled in 2001 and stayed unsettled through early 2003, life insurance customers and distributors started looking for more stability.
Insurers responded by rolling out ULs with guaranteed death benefits (to age 100) and extended maturity options, Gelder continues. Similar features were available in the 1990s, but he says relatively few buyers and sellers were attracted to them "due to all the euphoria in the stock market."
In the early 2000s, however, the newer ULs with guarantees caught on.
Today, another shift is under way. The markets are rising, so insurers are once again looking at VULs, Gelder says. But they also are factoring in the public preference for ULs with guaranteesby offering VULs that offer lifetime guarantees, too.
Why do this? The markets are up from their low, but they're still volatile, the ING executive explains. However, if consumers purchase a VUL having guarantees, they have the assurance that they can go ahead and invest in the policy subaccounts while still knowing their death benefit will be protected for life, Gelder says.
