Insurers Should Give Thought To Modifying DI For Non-Traditional Sales
By Norse N. Blazzard and Judith A. Hasenauer
The protection elements of the more traditional life and annuity products often tend to be forgotten as the industry increasingly turns towards distribution through non-traditional producers such as stockbrokers and banks.
As the insurance industry moves into the new millennium, this will need to change. Well see why after reviewing where things are now.
In the past few years, many new insurance products have emphasized tax efficiency, fomenting great interest in the industrys various “accumulation” products. Often, this has resulted in producers excluding the more “bread and butter” productsones long the backbone of the “protection” side of the businessfrom their sales presentations.
Few banks and stock brokerage firms even offer products like disability income insurance, for instance. Nor do these marketers emphasize the sale of such insurance.
As a result, consumers of these marketers often remain unaware of their crying need to protect themselves from the financial ravages of inability to perform their usual employment duties.
Further, most non-traditional sellers of accumulation insurance products seem to have no interest in, nor responsibility for, assisting customers with insurance products (except for accumulation products that most closely parallel the investments that are their primary area of interest). Unfortunately, this means their customers have little opportunity to become informed about the other insurance products that are so important to assuring financial security.
In addition, most non-traditional sellers perceive themselves as having no expertise in the underwriting of pure protection products. Hence, even if producers in such channels are convinced they need to offer protection products, few of their employers have the facilities to support that or the understanding of what is necessary to do so.
Compounding matters, most insurers do not have a marketing staff that makes protection coverages available to these non-traditional distribution organizations.