Though I've spent 27 years in the insurance industry (with the past 17 years dedicated to the final expense market), I'm discovering some great new sales opportunities related to this growing niche market.
According to a recent survey conducted by LIMRA, there was a 23 percent increase in the amount of final expense (FE) policies sold in 2011. What an exciting time to serve hundreds of families every year! Whether they purchase or not, just helping, guiding and educating families in end-of-life planning is so rewarding.
There are many reasons for the growth in FE policy sales, including the increasing size of the lower economic population and the epidemic of obesity and diabetes, which often results in rate-ups and denial of standard life insurance. The "silver tsunami" of aging baby boomers also plays a role, as does the discontinuation of lifetime life insurance for retirees from many corporations, government agencies and unions.
But it's another trend that's really been helping me start FE-related conversations lately: cremation.
According to the two largest funeral trade associations in North America — CANA (Cremation Association of North America) and NFDA (National Funeral Directors Association), in just four years, 1 in 2 Americans will be choosing cremation. Today, Nevada leads with a cremation rate of 74 percent. Maine is at 65 percent. Florida is at 59 percent, and even Bible Belt states — including Tennessee (30 percent) and Louisiana (22 percent) — have seen double-digit growth in the past few years.
Marketing studies by the trade associations list the following reasons in order of why the American public is increasingly turning to cremation:
1. Low cost
According to a recent TIME magazine article (June 24, 2013, "The New American Way of Death"), the national average cost of a traditional funeral is $7,775. For cremation only, the average cost drops to $2,570. With a casket burial, one also incurs cemetery fees, including the plot, burial vault, the opening and closing of the grave, and a headstone/marker.
2. Additional options
The American public is being educated that with cremation, one can still have a service and also be "buried" in a plot at the cemetery. At a service, if a casket is on display, open or closed, it is called a "funeral service." With cremation, whether the urn is present or not, it is described as a "memorial service" and now many are starting to call it a "celebration of life."
Families are now making their own choices about how to handle the final disposition of the "ashes." (The correct term is actually "cremated remains" or "cremains.") Current studies reveal that about one-third opt for cemetery internment, one-third opt for public or private scatterings (allowed in most states), and one-third are kept at home.
3. Mobility
Never in the history of the United States have people been so mobile. Many are born in one city, raised in another, move throughout employment and then retire to the Sun Belt states. Seniors are wishing to spare their children the expensive cost of shipping a casketed body from their place of death to their home town. With cremation, the Transportation Security Administration allows a non-metal urn to be carried on the plane with the proper permit prepared by the funeral home, therefore saving thousands of dollars, curtailing numerous decision-making conversations among family members and eliminating a whole bunch of red tape.
See also: Death by the numbers
4. Religious acceptance
The Catholic Church reapproved cremations during the Vatican II summit in the early 1960s and, in 1997, approved the presence of cremated remains at funeral masses. Judaism — Reform, Liberal and Progressive — encourages cremation. Nearly every Christian group allows cremation, deeming it a personal choice.
5. Protecting the environment
Environmentally conscious consumers see cremation as a green burial alternative. Cremation avoids embalming chemicals as well as metal caskets encased in the ground and conserves land resources.
Final expense for cremation
