Per LIMRA, Life Insurance policy sales were down 3% in the first quarter of 2019 year-over-year. There was a slight uptick of 1% in annualized premium and a modest 3% gain in Face Amount. The overwhelming damage done was by Universal Life (-8% in policies sold with nearly flat premiums and face amount) and Whole Life (-5% in policies sold with -1% change in premiums and -2% change in face amount).
These downward trends in policies sold have been amplifying over the past few years. I believe we will continue to see them – especially in permanent products – due to the massive shift in our industry towards managed money. When I started in this industry a decade ago, I felt like I was in competition for Life Insurance sales at least 60% of the time I walked into a meeting. If you ask advisors that have been around at least that long and longer, they will generally agree with that assessment. Algren’s offices receive dozens of case design requests a week. I have been keeping track of these requests for several months and less than a quarter of them see any type of competition from another broker.
This is one of the best times to distinguish your practice as one with Life Insurance expertise. There are many types of products out there that can be customized to any client’s needs, pricing has never been more competitive, and underwriting has never been more streamlined.
If that does not interest you, consider the following demographics. There are six hundred and thirty thousand Registered Rep in the USA. That’s one Registered Rep for every five hundred and twenty Men, Women, and Children. If the average American family is about two and a half lives, then each Registered Rep represents about two hundred families. According to recent studies 78% of U.S. workers are living paycheck to paycheck with more than 25% of them not putting anything aside in savings each month. Those Reps – with 200 families – with clients between twenty-five years old and fifty-five years old can expect twelve of their clients to die over the next ten years. Yet the risk management discussion is clearly being bypassed. The “Life Insurance as an Asset” discussion is clearly being bypassed.
I challenge everyone who is reading this. If you have clients that own businesses, think about what would happen to their businesses and their families if they passed tomorrow. If you have clients that have young families, think about what their surviving spouse and kids would do without them. If you have clients that are struggling to put away $250 or less per month, think about how much harder that struggle would be devoid of their income. If you have clients, consider your first conversation with their surviving family members where they tell you there was no Life Insurance in place.
For your clients, their businesses, their families, and for you, let’s work together to get people covered appropriately. Let us help you be in a position that when one of your clients passes, you show up with not only condolences, but the first step towards maintaining their financial plan.