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July 20, 2003 at 08:00 PM
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Do you have clients who are 50 and older who recently purchased term insurance?
Do you have clients who are reluctant to buy variable universal life due to market volatility?
Has whole life proven too expensive for your clients permanent coverage needs?
If you answered yes to even one of these questions, then you may be leaving your client at risk and leaving commission dollars on the table.
Universal life products, particularly the new generation of products with secondary guarantees–which provide up to lifetime guaranteed death benefits–just may be the right solution.
Recent sales data reflects there is increased interest in UL with secondary guarantees. This has occurred for several reasons: market volatility has kindled a renewed interest in products with guarantees; and the geopolitical climate has reinvigorated many clients needs for security, while reducing their willingness to commit the significant premiums required to adequately fund VUL and WL contracts.
In addition, baby boomer demographics have played a significant role (fortunately, a far more predictable role than the capital markets or geopolitics).
Americans are living longer. The number of Americans ages 45 to 64 increased by 34% during the last decade, according to 2002 data from the U.S. Department of Health and Human Services. In fact, average life expectancy hit a new high in 2001 of over 77 years, up from 69.9 years in 1960, according to the CDC National Center for Health Statistics and National Vital Statistics System.
Despite this increase in longevity, industry sales data demonstrates that producers are selling more term coverage to people who are living longer. For instance, over two-thirds of individual insurance purchased in the U.S. during 2002 was term insurance, according to figures from LIMRA International, Windsor, Conn.
In fact, term sales have exploded. While the industry overall grew at 3% in 2002, LIMRA reports that term life sales increased 13% and level term represented 91% of all term face amount issued.
