Americans Underinsured? Why?

[James]

I'm assuming that most have read about the flattening of Life Insurance Sales (including other lines such as DI) in the last decade or so. Basically, I'm wondering why? Term is getting cheaper all the time, the term length is longer and longer, in another thread someone brought up the 40 year term to go along with the 40 year mortgage. Yet while the discussion didn't go into their even being a 40 year term product, it is still an interesting discussion all do itself!

I'm yet wondering why the flattening of sales? Is due to the Insurance Carriers themselves? We all know they seem to have change marketing attempts, more and more these carriers seem to be moving to a BGA or whatever, moving the sale force outside of the company. Or does the problem lie in the Agents themselves along with the product? Or could it be the general public does not see value in it?

 

[STIBROKER]

because life insurance is a tough sale....people do not like to think about dieing......

Basically, I'm wondering why?

 

[James]

I'm assuming people didn't like to think about dieing years ago either, but...

 

[Krono]

It could be because we are becomming increasingly selfish. It is a choice:

Choice A: Lotsa 'stuff' now leaving your family in a bad sitch when you die.

Choice B: Lotsa insurance now leaving your family in a good sitch when you die.

Not much different that those that forego health insurance. My wife has a friend that 'can't afford' health insurance for her and her two sons...but she has a brand new shiny loaded Suburban in her driveway, eats out every day, and owns nothing but designer/name brand clothing...maybe my wife needs to find a new custome...er...uh...friend.

 

[James]

It could be because we are becomming increasingly selfish. It is a choice:

Choice A: Lotsa 'stuff' now leaving your family in a bad sitch when you die.

Choice B: Lotsa insurance now leaving your family in a good sitch when you die.

Not much different that those that forego health insurance. My wife has a friend that 'can't afford' health insurance for her and her two sons...but she has a brand new shiny loaded Suburban in her driveway, eats out every day, and owns nothing but designer/name brand clothing...maybe my wife needs to find a new custome...er...uh...friend.

No doubt, if insurance is sold as a commodity it'll likely not do well when put side by side with the new Ipod Cellphone.

Yet though, exactly how many people have small 50-150 grand policies via work? A lot I imagine, while not the best are the people suggesting that more insurance is not needed?

 

[James]

I'm told by some that digital is the way to go! If insurance can not be sold online than the death of Life Insurance and other types. Much like this sites that promote Term Only Financial Group (that is right, two sales per hour! I guess we won't be underinsured for long!), now I'm not sure, if online sales means selling NonMed with digital signature can we only imagine if we want to be in the biz to begin with. While I'm not against these policies per say yet I don't think they are all that great unless specifically place for short time need of insurance. Yet looking at the lapse rate being touted about on these plans I guess most feel the same way!

Ps, this is the claim on the website that I find in so many:

MAKE TWO SALES EVERY WORKING HOUR! -

• Clients CALL YOU!
• Work When YOU Want
• Never Leave Your Desk

 

[David C]

I've heard that the number of agents has shrunk through the years, combine that with the survey (LIMRA, I think) that says a large percentage of families have not been approached by an agent recently, and you get decreasing sales.

Additionally, I'll say that I do encounter resistance getting people to but the amount of life insurance they need.

 

[James]

I've heard that the number of agents has shrunk through the years, combine that with the survey (LIMRA, I think) that says a large percentage of families have not been approached by an agent recently, and you get decreasing sales.

Additionally, I'll say that I do encounter resistance getting people to but the amount of life insurance they need.

While obviously this problem has many reasons, not one of which is the so called "Need", and how one defines that.

 

[Alston]

There are fewer agents today for various reasons. Agents play a big part in "creating" the market for insurance. Fewer agents, smaller market. Smaller market, fewer agents.

The lower term rates mean lower commissions. Certain products can only be sold to certain prospects face-to-face. The lower commissions mean that they can't be sold profitably face-to-face. This means that fewer agents are talking about them. The market shrinks when people talk and think less about a product.

 

[James]

I would imagine at any time in any society you can define a "Need" and come away and state so many are Under-Anything! This is reminding me of the Retirement talk we all are hearing about, America is not ready for retirement, yet if you look there are studies that suggest quite the opposite or at least puts the picture in a better light. Such as this one, http://www.urban.org/UploadedPDF/1000252_saving_enough.pdf

I'm just wondering how we are defining the problem of UnderInsured? Here is one take that some might find helpful. Yet most that have Life Insurance fall under having enough to replace income of the death of the insured for 2.6 years. Most think that 5.7 years of income replacement is a proper amount.

http://www.flexfs.com/pdf/LIMRA-factsaboutlife2005complete (2).pdf