Essential Guide: Life Insurance

Given the flux in estate tax policy, it's also vital to build flexibility into a policy purchased to execute an estate plan, so that it can be tweaked if tax laws change, adds Harris. Advisors looking to broaden their life insurance sales horizons might also consider targeting African-Americans. According to recent findings from LIMRA, African-Americans are twice as likely to consider purchasing life insurance for themselves or for someone else in the household compared to the total U.S. population.

"Our findings indicate that African-Americans are more receptive to buying life insurance today than in the past and that they have a more positive attitude toward life insurance companies and their field representative than the general population," says Nilufer Ahmed, a senior research director at LIMRA.

Channels worth watching
"As far as upside for life insurance sales, the bank channel is among the most promising," says Ashley V. Durham, a LIMRA senior analyst. "That's where we saw the biggest percentage growth in the first quarter [of 2010]." "And," she adds, "simplified-issue life insurance products are leading the way."

Indications are that life insurance carriers are increasingly emphasizing the bank channel to bolster sales. But companies such as The Hartford are looking to other avenues as well. In February 2010, The Hartford's individual life insurance division launched a campaign designed to grow sales in the independent channel in order to build on its already strong positioning in the broker-dealer and bank channels. Its goal: to make the company one of the top five biggest producers in the independent channel within five years.

The program, dubbed "Monarch," thus far has been "a breakaway success," according to The Hartford's Robert DeMallie. The thrust of the campaign is relationship-building between the company?s internal sales force and some of the most successful life professionals in the business, he explains. "Our goal for the full year is to affiliate with 400 of these high-performing life producers. However, as of June, we already had agreements with more than 300."

The appeal of the Monarch program? Producers like it, he says, because they are afforded direct access to their own underwriter and the Hartford's advanced marketing team, plus extra support from local account executives.

Hot products: Established and emerging
Success in the life insurance market is as much about new products as it is about traditional ones. So if you want to beat your competitors to the punch, get up to speed on emerging products such as hybrid-term UL, indexed UL and permanent policies with a long-term care component. Indexed UL products are gaining appeal because they're less risky than pure VUL offerings, while still providing upside potential.

Carriers lately have been dedicating more marketing resources not only to indexed UL products but to permanent products that cover long-term care needs, including those with accelerated death benefit riders that allow the policyholder to access cash value to cover LTC costs as well as so-called linked policies that package permanent life insurance with long-term care benefits that can be drawn independently of the underlying insurance contract.

One of the newest entrants in the field is The Hartford's "Life Access" mortality rider, an indemnity-based option that provides income to cover the cost of care for specific conditions. Unlike other riders in the class, it doesn't specify the types of care that are covered, thus making it appealing for people who prefer to receive care at home from family members, explains Dr. Robert Pokorski, chief medical strategist at The Hartford. "Care at home, by one's family, is the new model" for long-term care.

Other new spins on the traditional UL policy are also finding a foothold. A handful of carriers, including Genworth, now offer a hybrid-term UL policy. Introduced in late 2009, Genworth's Colony TermUL includes a guaranteed term period of either 10, 15, 20 or 30 years. Once the term expires, the policyholder can elect to continue paying a new, higher-but-level premium to build cash value in the policy to keep it in force until age 105.

As a lower-cost alternative to permanent life insurance, it's a product that is finding traction with business owners as well as wealth-transfer-minded families, says Rowray, adding that the Genworth offering now represents close to 50 percent of the total term production that funnels through his firm. "It really started to take off in early 2010."

For life insurance producers, there's still time to get a piece of the action.