Back in the September issue of Life Insurance Selling, Maria Umbach, M.B.A., CLU, authored an article that asked producers “to stretch our minds, so we can imagine a future state that doesn’t yet exist.”

In case you missed her provocative article, “The New Mutuality,” I want you to take a minute now to do just that.

Umbach hypothesized that, by combining the ability to collect and distribute funds quickly — as was accomplished very effectively in the immediate aftermath of the 2010 earthquake in Haiti — with the power of a social network like Facebook, a “Napster Moment” in insurance is possible.

Could an outside force — with little to no experience in the insurance market — all of a sudden show up with a radically new business plan and completely change the game? Beyond Napster leading to a revolution in the music industry, Umbach points to how Travelocity “moved the cheese” of the airlines and travel agents, and also makes reference to Netflix, LegalZoom and Lending Tree, among others.

It has been done, and Umbach says a social network like Facebook has the potential to reinvent the way people obtain something akin to life insurance coverage. Could it emerge as a successful new model before states could define and regulate it as insurance? When I think about what Napster did to the music industry, I wouldn’t rule it out. Here’s a brief excerpt from Umbach’s article:

Facebook and other forms of social media have three key elements that are required for insurance to work:

  1. A large, diverse pool of people.
  2. The ability to track and store large amounts of data and make predictions from it.
  3. Awareness of the burden of uninsured risks.

And it has four things that today’s insurance industry does not have, but probably wishes it did:

  1. Significant levels of involvement and engagement by users.
  2. Viral marketing power.
  3. Instant feedback about what people like, dislike and what is attracting the most attention at any given moment.
  4. A natural hedge against anti-selection.

Could forces outside the insurance industry “jar” — like Facebook joining forces with AT&T and PayPal — actually pull this off? I don’t think it’s on their “to do” lists at the moment, but who’s to say someone in a position to make forces like these align doesn’t at least have it on the radar?

Twenty years ago, who imagined iTunes would be the way you bought music?