After a weekend that included some frustrating bouts of Christmas shopping, it got me to thinking about what my Christmas "wish list" would be for independent life insurance producers. Here's what I came up with after a few moments of thinking about it…
- A silver bullet. This particular silver bullet allows producers not already entrenched in the affluent market to penetrate the middle-income market, breaking through consumer apathy to find a receptive audience that is grateful to be contacted and advised about their very real need for (more) life insurance coverage. LIMRA's 2010 U.S. Life Ownership study revealed that half of all households (a majority falling into that middle-market demographic) need more life insurance, and 25 percent are likely to buy. If producers can convert that 25 percent, we'll start seeing growth again in the number of in-force policies.
- Our products get to keep their tax advantages. President Obama and Republicans in Congress each compromise to keep the nation from falling over the fiscal cliff, and none of that compromise involves messing with the incredibly important value to our society of tax-advantaged life insurance products. If the tax-free inside buildup and death benefits were to go away as one of the "closed loopholes" intended to raise tax revenues for the government, the long-term result would be disastrous for the country. Remember that the life insurance industry pays out, on average, $1.5 billion every day, while Social Security pays about $1.9 billion every day. According to ACLI, life insurance beneficiaries received $60 billion in 2011.
- Commission-based compensation existing beyond 2013. I think a universal fiduciary standard of care for all advisors will arrive sometime in 2013 at the hands of the Securities and Exchange Commission (SEC). My hope is that this new standard and interpretation of the term "fiduciary" will not outlaw the commission-based business model that has helped so many producers thrive under the current suitability standard. I have no problem with fee-based advisors, but I also believe there is a niche for commission-based compensation models that can help keep the costs of obtaining coverage lower for middle- and lower-income Americans who would not consider hiring a fee-based advisor. (List continues on next page.)
- A surge in new agent recruiting. We all know about the aging producer workforce, as producers retire faster than new agents enter the business. LIMRA says the number of agents in the United States has been consistently decreasing since 2004. I would love to see the industry — at all levels — make concerted efforts to ramp up recruiting and bring new blood to the life insurance field sales force. Recent college grads or people looking for a career change just don't know what a great profession this is, and it's because the industry doesn't do a good enough job of letting people know.
- More mentors and mentees. The best gift a young producer trying to beat the odds and make it in the industry past those dangerous first four years (which have a retention rate of about 10 percent) could receive is working with a good mentor. Someone who can help them avoid common but unnecessary pitfalls and accelerate their learning curve. For older producers who hope to retire within the next five years but are uncertain about their own business succession plan, I wish for you to find a promising young producer to mentor, who, with your guidance, might eventually develop into a good solution to your own exit plan. Find out more about mentoring programs from MDRT and GAMA at these links.
- A Super Bowl ad. An anonymous donor gives the LIFE Foundation $4 million, with the stipulation that it be used to create, produce and air a memorable 30-second ad during Super Bowl XLVII on Feb. 3. The ad becomes one of the most talked-about spots in the days leading up to and after the Super Bowl, generating considerable buzz among consumers, who begin to realize they need to be adequately covered. This leads to a measurable increase in sales, and the life insurance needle moves a little more toward "adequately covered" for Americans. (Yes, I live in Colorado and realize this sounds like a pipe dream. I suppose it is, but as long as I'm dreaming of Christmas presents for the industry, I find myself curious about what kind of impact a great ad on that huge stage might do in terms of raising awareness among consumers who are either oblivious about their need for coverage or are merely in denial.)
I know I'm missing plenty of good ideas for "gifts" that would help the industry, which is why I welcome you to share what your Christmas wish list for the independent life insurance distribution channel would include. Please feel free to do so by using the comment tool below. Finally, I hope you and your family and friends enjoy a great holiday season.
