The new vitality in the staid old life insurance business is encouraging and surprising.
For instance, the new Bragg Associates life insurance market survey drew more responses than ever before. What's more, the survey findings show some significant product shifts–to simple products such as term insurance, very large amounts, preferred issues and old age issues. This despite the disquieting era of the early 2000s with its economic swings, war and societal change.
Let's look at some of the trends now impacting the market, as revealed in the survey and shown in Table 1.
Self-Reliance: The "lifetime employment" covenant is gone; self-reliance is in. This suggests group insurance will decline, but individual insurance will thrive. The new upscale self-reliant market is sophisticated; it deserves the industry's very best efforts, in product and service. The "personally producing general agent" emerges in the survey as a strategy to serve this market. Product-wise, large amount level term insurance is definitely in.
Longer life expectancy: Table 2 deals with this in a very revealing way. Nonsmoking 75-year-old males in 2002 were like 68-year-olds in 1982, like 62-year-olds in 1950 and like 59-year-olds in 1908. This is leading to longer working lives, often in new careers. It certainly has led to an enormous and fully justified increase in the market for older age life insurance.
Not incidentally, three-quarters of the survey respondents indicate that they serve the 75-plus market. Twenty years ago, that market was virtually nonexistent. (Note: The improvement in life expectancy is also evident for females but is not as extensive.)
