Recently, we asked hundreds of producers to tell us how they expected their life insurance sales to fare over the next 12 months, relative to the previous year.
The answer? The overwhelming majority is planning to see a nice bump.
Among the survey respondents, 28.1 percent said they expect their life insurance sales to increase substantially. Another 44.6 percent said their sales should increase somewhat. In fact, only a meager 0.4 percent forecasted a substantial decline.
| In the next 12 months, do you expect your new life insurance sales to: | ||
| Answer Options | Response Percent | Response Count |
| Increase substantially | 28.1% | 377 |
| Increase somewhat | 44.6% | 598 |
| Remain about the same | 24.2% | 325 |
| Decrease somewhat | 2.6% | 35 |
| Decrease substantially | 0.4% | 6 |
| answered question | 1341 | |
| skipped question | 0 | |
What's making life insurance producers so optimistic? After all, U.S. application activity for individual life policies this year is down 2.3 percent compared to 2012, according to the MIB Life Index. The economy's still shaky in many areas. The government is still dysfunctional in all areas.
So we asked producers to tell us what they're doing to turn those cheery sales goals into reality. Here are five of their top answers.
Harnessing tax worries
It's no secret the U.S. government has some … uh … cash flow issues. Congress can't agree on a budget. There's a major debt ceiling fight coming up. There's Social Security. And Medicaid. And Medicare.
Payment for all of our government's obligations will have to come from somewhere, and most people agree that at least part of the bill will be passed on to citizens in the form of new and/or higher taxes.
According to the producers we surveyed, that threat has clients increasingly turning to life insurance, with its income tax-free death benefits, tax-deferred cash value growth and tax-favored access to cash values through withdrawals.
And life insurance products' popularity stands to increase because that tax-favored treatment looks like it's here to stay, at least for the time being. NAIFA recently asserted that new life insurance taxes wouldn't be happening anytime soon. And even if changes are made down the road, existing policies could very well be grandfathered in, some experts say.
Given all that, "The demand for prospects to have a way to get tax-free income without market fluctuations has increased dramatically," one producer said.
