Is the banking industry poised to take over life insurance? According to a new study by LIMRA, that could be the case as 13 to 46-year-olds are more likely to seek life insurance policies through their banks.
The study found that Generation X (ages 33 to 46) and Generation Y (ages 13 to 32) are more receptive to buying life insurance from their bank than buyers of the boomer and silent generations. Only one-third of boomers and members of the silent generation say they would seek life insurance through their banks.
In addition, 7 in 10 consumers that indicated they would consider purchasing life insurance from a bank are interested in simple products, while only one third of high-net-worth consumers would consider purchasing a more complex life insurance product from their respective bank.
In fact, a periodic LIMRA study discovered that awareness of bank-sold life insurance has reach 54 percent.
“Growing up in a post-Graham-Leach-Bliley environment, the younger generations are open to receiving a broad spectrum of products and services from their bank,” says Patrick Leary, assistant vice president, LIMRA distribution research to LifeHealthPro.com. “We also know these consumers are more likely to need life insurance than older generations. In addition, many of these younger consumers have no existing relationship with a life insurance agent or financial advisor…”
As part of the National Agents Alliance team, it’s important that, as a life insurance agent outside the banking industry, you target the younger generations and begin forming relationships with them. It may pay off in the future when they turn to you for their life insurance needs over their bank.
Not all life insurance agents are created equal, some like to go veer from the path of integrity and take advantage of unsuspecting clients, who truly need their help. A report from InsuranceNewsNet.com has revealed just what could happen to unscrupulous life insurance agents and the repercussions that can follow.
A North Dakota insurance agent is facing multiple felonies and jail time after he allegedly swindled a client’s money in order to pay off his credit card and purchase gold coins.
The 54-year-old Dickinson, N.D. insurance agent Scott Biggs allegedly withdrew $30,000 from a client’s trust account without the client’s knowledge or consent on Sept. 11, 2009.
Red flags were raised after Biggs told his client that the IRS had frozen his accounts when he attempted to withdraw money from them. In addition, Biggs also refused to provide documentation of the IRS’ involvement.
Officials reported that Biggs is accused of issuing two cashier’s checks from the client’s savings account, in which the first check was for $23,522 to pay Biggs’ credit card. The second check was written for $5,805, which was used to purchase three gold coins.
Biggs has been charged with four Class B felonies, which each carrying a penalty of up to 10 years of jail time and a $10,000 fine. He was also charged with on Class C felony that can result in five years in prison and a $5,000 fine.
The client’s identity is being withheld.
The Southwest District Judge Zane Anderson prohibited Biggs from conducting insurance business and must get a court approval to leave the state.
Are you being the best agent that you can be?—and by that I don’t mean having the most sales or the strongest team. I mean, are you providing your customers with good advice; explaining their benefits and policy options clearly and in a way that they understand? According to a recent survey, only about half of current owners of life insurance are happy with the advice they received from an agent who sold them a policy, LifeHealthPro.com reports.
The Deloitte Research survey looked at 1,071 U.S.-based life insurance policyholders and 1,000 individuals without life insurance in June 2011. The survey found that in learning about life insurance benefits, coverage needs, option and costs among current buyers, most satisfied reviewing their employee benefits package (67%), followed by speaking with an insurance agent (59%) and reviewing information packages from an insurance agent. Satisfaction levels were lower among those speaking with a financial planner (44%) and those either speaking with a bank representative or reviewing information packages received from a bank (36%).
When speaking with a client, it’s important to simplify what you’re trying to say—not because your client is not intelligent; it’s because it’s easier to understand when it’s in simple terms and not in confusing industry jargon. If you give a client a clear understanding of what they are buying and how it can benefit them—along with all the fine lines, and terms and conditions—you build trust and create repeat customers that will refer their friends to you.
In addition, the survey also found some other interesting points:
Among current policyholders who had received solicitations, two-thirds (67%) came directly from life insurers, with other sources, including agents (37%) and banks (30%), trailing behind. Twenty-six percent also reported receiving cross-selling offer from their auto insurers.
Furthermore, only about one-third of current buyers strongly agreed (14%) or agreed (21%) that they bought life insurance because of advice from a family member, friend or business associate. A similar percentage said they purchased it because of a recommendation of an insurance agent. Thirty-seven percent noted they were impressed by the brand name, reputation and/or rating of the insurer.
When current holders of life insurance were asked about factors that had influenced their last purchase decision, more than 8 in 10 (84%) either strongly agreed (35%) or agreed (49%) that they bought a life policy because the price was affordable, LifeHealthPro.com reports.
When discussing life insurance options with clients, there are only two things your client needs in order to have a well-rounded protection plan in place: Enough insurance and it should be active the day they die.
The first thing you need to determine when working with a client is how much insurance they need, and how long it will provide benefits to the surviving spouse.
One of the biggest mistakes people make when buying life insurance is only thinking of paying off the house and paying for the funeral.
Once the family breadwinner has passed, their spouse and family will not only be left without income, but a potentially large stack of bills. Many people only think about covering the funeral and burial costs, and paying off the mortgage. But, they need to look further into the future. The children may need to go to college and that lost income must be replaced to help keep the family afloat for months – possibly even years – to come, until they can start to replace that income on their own. It is even recommended that individuals purchase enough life insurance so that they will receive the same amount of their deceased spouse’s income for at least five years.
LifeHealthPro.com revealed that there are also many personal uses for life insurance like:
- Burial expenses: Life insurance will pay for funeral expenses, and benefits can be assigned directly to the funeral home.
- Mortgage and debt protection: Life insurance can pay off a mortgage, credit cards, a student loan and other personal debt.
- Education: The cash value in a life insurance policy can provide funds for a college education.
- Charitable giving: Life insurance can fund a donation or an annuity for a charity, church, foundation or nonprofit.
- Estate creation: Buying a whole life insurance policy gives the insured an instant estate and makes him worth a lot more money.
- Estate taxes: Life insurance can be used to pay estate taxes when taxes are due.
- Inheritance equalization: If the son inherits the family’s $2 million mansion, what does the daughter get of equal value? How about a $2 million death benefit from a life insurance policy? This gives both children an equal inheritance.
- Survivor income: Life insurance can provide a lifetime income to a widow or widower when the spouse dies. It’s instant security.
- Children’s insurance: Life insurance on a child not only guarantees a death benefit; it also ensures the child will be guaranteed insurable for future life insurance coverage.
Remember to always consider things beyond an individual’s immediate needs and begin examining what the landscape may look like down the road. Our clients need to be protected no matter what happens, and look to their National Agents Alliance representative to provide them with the information and recommendations to make the best decision.
Did you know that only 39 percent of U.S. households recall having an opportunity to buy life insurance in the past two years? According to data released by LIMRA, it seems that many U.S. households are being neglected when it comes to life insurance.
The data also found that single people were the most neglected, with only 26 percent remembering having the opportunity to purchase life insurance, compared to 74 percent of married people.
But, it seems like the single people should be who insurance salespeople should be targeting; because singles reported being almost as likely to buy life insurance as married couples (51 percent versus 58 percent).
Regardless of their marital status, the largest determining factor of whether life insurance will be purchased is if there are children under the age of 18 in the household. According to the data, nearly half of buyers have children living in their home, compared to 38 percent of non-buyers, LifeHealthPro.com reported.
In addition, single mothers also remain to be an untapped market. Earlier LIMRA research found that one-third of single mothers who are the primary wage earners in their families had no life insurance coverage. But, among those who purchased insurance only two-thirds believed that their families would only be able to cover living expenses for a few months if they were to die.
These are all great opportunities for our National Agents Alliance insurance team to provide valuable coverage to an obviously unsaturated market. Now hammer down and get to work!
Due to advancements in medicine, people are living longer – But, that doesn’t necessarily mean they have grown wiser, as Americans are failing to obtain life insurance to protect themselves and their loved ones.
An annual study conducted by the Life and Health Insurance Foundation for Education (LIFE), called “The Insurance Barometer Study” found that almost one-third of respondents believe they need more life insurance; that includes 20 percent of current policyholders and about half with no coverage.
The report also found:
- The two main excuses for failing to purchase adequate amounts of life insurance is because it’s too expensive (83 percent,) and because of other financial obligations (85 percent).
- When asked for an estimate of the annual costs of a 20-year level-term life policy for a 30-year-old, the respondents over-estimated at $400. Younger adults, those most likely to qualify for preferred pricing, overestimated the actual cost of $150 by a factor of seven.
- Consumers believed they couldn’t afford life insurance, yet they had no idea how much it actually cost.
- The respondents were found to be more concerned with paying their mortgage or rent (31 percent), or losing money on investments (26 percent) than with buying life insurance.
Obviously, there are huge misconceptions in the world of life insurance and the true cost to obtain this protection that could save families from losing their home, and prevent financial disaster in the event of an unfortunate death. It’s our job as National Agents Alliance insurance agents to bust these myths and explain to clients that life insurance is much more affordable than it’s widely believed, and how it can help keep a family in their home, their kids at their school and have everything they need after their untimely death.
LIMRA released a startling trend for men age 18 to 65 in September of 2011, and it’s possible those findings could be worse in 2012 if males don’t protect their loved ones by securing life insurance this year.
Men ages 35 to 54 have seen large declines in individual life ownership in the past 12 years. In many cases, this mean the person with the highest income in the home doesn’t have enough coverage for the family. Typically, middle-age men have families and need coverage and, in a lot of cases, serve as the main bread winner in the home.
Young males in the 18 to 24 age demographic are buying life insurance policies even less these days. This is troubling to think that an adult entering the workforce would not have any life insurance at all. LIMRA reported that only 13 percent had individual life policies in 2010, compared to a 30-percent rate back in 1998.
Husbands are not doing what they should by owning policies either! LIMRA found that in husbands ages 35 to 54 and those 65 and older there was a double-digit decline in the proportion owning individual life insurance in the past six years.
Since 2004, the likelihood of husbands having any kind of life insurance has declined across every possible income level – low, middle and affluent all have less coverage than in past reports.
Most certainly the economy plays some role in these numbers, but men and husbands need to remember that life insurance should not be the thing they do without because times are tight. If you can afford cable and internet each month, you should be able to find a suitable life insurance policy in 2012. It’s hard to imagine people don’t understand that, but LIMRA’s findings seem to support that kind of short-sided logic.
Thankfully, there are thousands of National Agents Alliance agents all over the United State eager to change those statistics for the better in 2012!
As crazy as it sounds, Americans just don’t have the life insurance coverage they need. The trend is alarming when you consider the following statistics provided by LIMRA.
- The proportion of U.S. adults with life insurance protection has declined to an all-time low, with 41 percent (95 million people) of U.S. adults having no life insurance at all (LIMRA September numbers).
- Men and women are less likely to own life insurance today than they were back in 2004 – 61 percent of men and 57 percent of women have some sort of life insurance coverage.
- Only one in 10 insured adults own both permanent and term life insurance – half as many in 2004.
- The likelihood of being without life insurance has dramatically increased for every age group since 2004.
There are a number of reasons for these troubling numbers. Many believe the economy plays the biggest role in those low numbers. People without jobs and companies scaling back benefits offered to employees has contributed to the decline in insurance coverage. In 2004, roughly one in every three households relied solely on employer-provided life insurance. That number is now one in every four homes.
Sadly, surveys suggest that people know they need life insurance and they want it. Many fear buying a policy only to have to cancel it because they don’t have money to cover the small cost each month or annually.
Luckily, National Agents Alliance is doing all it can to show people they can afford life insurance. With a diverse lineup of carriers, our agents can find the best possible fit for any budget. One of the goals for National Agents Alliance is to help protect every single person and family that seeks coverage.