Overall U.S. life insurance application activity slowed in March, with the composite Index falling -4.9%, YOY, according to the latest edition of the MIB Life Index. For the first quarter, the MIB Life Index is off -1.0% versus Q1 2018.
MIB says the declines are due in large part to younger buyers, who account for 53% of the total Life Index, staying away from the market, while older buyers are doing their best to boost activity.
When broken down into activity by age groups, March application activity 0-44 was off -9.1% YOY, ages 45-59 were off -4.5% YOY, and ages 60+ were up 7.6% YOY. At the end of Q1 2019, activity ages 0-44 are off -6.1%, ages 45-59 are up 0.5%, and ages 60+ are up 12.6% YTD. Application activity ages 60+ are showing their first double-digit quarterly growth in nearly a decade.
March activity for the composite Index was up slightly (0.8%) from that of February. Much of the reason for the severity of the year-over-year decline in March, MIB notes, was that March 2018 comparative period was so good, being up a significant 6.7% from the year before.
The MIB Life Index is the life insurance industry’s timeliest measure of application activity across the U.S. Released to the media in the second week of each month, the Index is based on the number of searches member company underwriters perform on the MIB Checking Service database. Since the vast majority of individually underwritten life premium dollars in the U.S. include an MIB Check as a routine underwriting requirement, the MIB Life Index provides a reasonable means for estimating new business activity.
The problem is the new agents, replacing the old agents.
The new agents keep looking for way to cause the traffic to walk in the door.
Most consumers don't buy life insurance, they are SOLD life insurance. If the agent doesn't go out and find prospects, and then get them to meet and discuss their need for life insurance, the product will not get sold.
In fairness, it's harder than ever to contact consumers, particularly when you have "don't call lists" and people increasingly making it hard for sales people to contact them. We have the folks who carpet bomb those consumers with automated calling systems to thank for that.
Funny that other financial service sectors don't have similar declines. Banks are closing branches but remain as profitable as ever. I'm no expert on the problems in getting non-seniors to buy life insurance, but I know it's not DNC or producers afraid of door knocking, cold calls or working Project 200. Face it, nobody picks up the phone except the elderly..And nobody does home visits anymore except Jehovah's Witnesses, process servers, and yes, FE agents.
While made in jest, the title of the article hints at the larger problem with LIMRA et al. It's not the customer that has to pull her weight. Rather it's the companies and iMOs that develop products, market and sell like it's 1999.
agents may be taking path of least resistance. senior clients have the time, follow through, have the money, awareness of mortality, know people that have died or gotten sick. They have seen the reason for the coverage need. So, for agents, the senior market is not only easier to connect with & get cases approved/placed, but the premiums end up being large enough to make it worth the time & effort.
While the age 25-45 is the segment that needs the products the most, the opposite of above statements are true. when you take the age 25-45 term case to fruition, a $10-$25 per month term life sale will seem like nothing after spending many nights/weekends chasing down the client & rescheduling over & over.
Worksite marketing & PC agents will continue to be called upon to serve the 25-45 marketplace as they tend to have more interactions with the segment when they keep buying big new houses, new cars, new boats/jetskis/toys & take on more debt.
Time to sell larger face amounts:
TERM4SALE | Life Insurance Needs Calculator
And longer level term periods:
TERM4SALE | Go Long on Term Life Insurance
Allen hit it on the head. Even if you go up to $50/per policies, if you are selling non-SI term, you're talking 80-100% FYC with no renewals. Oh, and you get to spend your nights and weekends chasing after people.
Or you can work Monday through Friday, daytime hours by selling FE to seniors, AND get 100%+ FYC, up to 120% in many cases, PLUS renewals. And they don't duck you any more than working families, probably less.
That is a real tough decision…
Yes, there are underwear agents selling online, but that leaves a lot of the population who will never be a lead.
This is hilarious.
A younger generation that does not earn as much as its seniors is now being blamed for consumption failures in a market segment.
😀
while you do point out a real issue in terms of earnings, high priced concert tickets, gourmet coffee, craft beers, smart phones, travel & many other items are definitely not suffering from a lack of consumption by this market segment
Purchasing life insurance must not bring as much focus or fun as these items & many others.
We're overspending for the love of a 'like'. Here's how to stop.
our job is to find a way to serve the market as they need our products the most
I completely agree! Why anyone would work the younger market is beyond me. I quit working that market when I was around 30 years old. Crazy hours, stood up way to many times, no real money to be made, and quite frankly I could never understand why someone can’t figure out they need life insurance if the have kids. I would mention it to them once but I sure wouldn’t waste time trying to convince them they need it.
That can work sometimes, but unfortunately many in this age bracket don't (yet) realize the value of LI. To them its an expense that takes away $ from their lifestyle. Plus with the commercializing of "lowest priced term insurance" or "buy it on the internet for cheap" they are subconsciously trained to want to pay the least amount.
While I agree with what everyone has said below me, there is a bigger issue here. You ASSUMED.
I never blamed younger adults for not wanting to buy insurance. I simply said why agents are idiots if they chase after this group. The reward is not commiserate with the effort. Why is not something I can solve, but I can clearly see its not worth. Because even if working adults saw the value in life insurance and they wanted to buy it, you're still mainly going to be stuck working nights and weekends to sell it. And that is when I would rather spend time with my family.
There are some internet agents who are successfully making money with this demographic, but not near enough to properly serve it. And too many people are wise to putting their info in a lead form. Too many vendors sell it to multiple agents. To make it worse, many of these agents are actually call centers. Then you combine this with leads getting resold multiple times, and suddenly the phone never stops ringing. The same happens to email, the inbox explodes.
So right now this is a failed demographic for insurance sales. Without a core change somewhere, it really isn't that profitable for agents.
exactly. most in the age bracket are fortunate they have some employer coverage & at Least SS Survivors. While they should own their own for the right amount & duration, at least there is some safety net.
Again, carriers need to find a way to make it easy for this market segment to buy through worksite or in my mind through PC/multi line agents. Most other agents that used to serve this market either no longer exists or have discovered what you have stated & moved onward to work the senior, business life or affluent markets
Good lord i hate hate hate selling Non-SI term to people under 40 lol, They just never stop lying and complain about 20 dollars a month.