Most of us in the life insurance business tend to believe the sale of specialty products, such as impaired risk life policies, is reserved to traditional life insurance agents. That may need to change.
The prevailing view has been that these products require specialized underwriting, the ability to negotiate rates and a detailed knowledge of the workings of the life insurance processexpertise that stockbrokers, bank insurance sales people, and others do not possess.
The problem with that is, an insurance sales person at a stock brokerage firm or bank is just as likely to come upon a customer with a special need as is a traditional life insurance agent. In fact, in view of the volume of customers many of these sales people encounter daily, they may be even more likely to come across such customers.
As an industry, life insurance has traditionally kept its technical secrets to itself, attempting to avoid permitting access to some of the more esoteric elements of the life insurance process to those who are not well-established members of the life insurance community.
Yet, in the last decade, there has been a continuing shift of life insurance sales away from traditional distribution outlets. Whether we like the entry of non-traditional distribution outlets into the business or not, we still have an obligation to the consuming public to make sure its needs are well served–regardless of where the sales of our products take place.
Therefore, perhaps it is time for insurers that specialize in issuing impaired risk life products to open up the sales door to the newer entrants.
We realize that impaired risk products are complex to understand and require additional effort to put into place. Nevertheless, these products, and the underwriting process they require, are not at all beyond the capacity of any of the sales people who are currently selling the more traditional products.
We need merely to open the process to the entire scope of life insurance distributors and to create the training mechanisms necessary for the products and the process to be understood and implemented.
A small number of stock brokerage firms and bank insurance operations are already engaged in placing impaired risk and other specialized life insurance products, according to our information. Unfortunately, weve learned that this handful of distributors is, as yet, unable to cover the entire needs of their customers without receiving additional help in understanding and implementing these types of products.
Many non-traditional distributors have fully professional insurance specialists who can help point-of-sale personnel understand and implement these products. But before they can do so, they need help from insurers to simplify and more readily understand what is needed to satisfy customer needs in impaired risk situations.