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Is Life Insurance a Priority Again?

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As we approach the later stages of one of the longest bull markets, protection is back on. What has changed? COVID, Rates – Section 7702 relief, Financial Wellness Strategies, Technology — Simplified Processing. The reason why is less important, what happens next will be our focus.

In the bank channel, Simple Premium Life and Hybrid Long Term Care products typically represent 50% of a Broker-Dealers’ life insurance sales. These products are popular for a few client reasons. They fit a need or are focused on the mass-affluent or mass-market client segment. But what truly makes these products fly off the shelf are a dedicated distribution team and simplicity.

First, the dedicated distribution team. Whenever you are singularly focused on one thing, you gain more traction.

Next is simplicity. These products have a limited number of client questions, the applications are relatively quick to answer, and approval comes back right away. But are the simplified issue products really the best choice for the client? Could a client get a cheaper product if they went the fully underwritten path? For many healthy clients, the fully underwritten path could lead to a more economical product, but this does not mean it is best for the client.

Essential Factor in Product Selection. Clients are allowed the value these factors and pay a little more if that is right for them. As firms review their strategy to expand life insurance, either through different distribution channels in a sister business or by deepening the relationship with current clients, don’t lose sight of what works and what clients like. Don’t force clients to buy what the math deems are “best”; there are other factors to consider. Simplicity, simplicity, and time is valuable.

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