Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

First Annual LifeHealthPro Industry Survey

Your article was successfully shared with the contacts you provided.

This year, Senior Market Advisor, part of, decided to do its first-ever Industry Survey to gauge the current attitude of advisors and others in the business of marketing insurance products to seniors as well as their outlook for the future. We also asked what gives their client sleepless nights. What did we find?

We found a lot of worried people, that’s for sure. Worried about stock market volatility that leaves retirement accounts flush one day and down in the dumps the next. Worried about legislation that could make an advisor’s job ever harder or make the products they sell less attractive. Worried about the next presidential election and what that will mean to the economy.

Perhaps owing to the erratic times we live in, products that offer safety (albeit with less upside potential) and guaranteed income are proving best-sellers right now. Indeed, of the nearly 200 respondents, 40.7 percent said annuities and 30.8 percent said life insurance were their top sales success stories currently. Garnering a number of write-in votes were Medicare Supplement contractsa sign that more and more baby boomers are hitting age 65.

Such safety-first options are proving popular because in a turbulent economy, they represent a comfort zone, a place where money may not grow tremendously, but principal is nevertheless protected.

And it’s that unpredictable economy that is keeping advisors up at night; 36.6 percent of advisors said so. Lead generation took second place (30.2 percent) followed by industry legislation (15.7 percent).

It’s no surprise, therefore, that with the economy top of mind nearly 70 percent said economic policies will be the deciding factor when they go into the voting booth in 2012. When asked who they would vote for in the upcoming presidential election, 60 percent pointed to the Republican candidate, while nearly a quarter (23.2 percent) said “other” and 17.3 percent favored President Obama.

Reading over the comments, it’s clear there is a deep dissatisfaction about what is going on in Washington, D.C. and skepticism over whether anyone can do the job. “Undecided as of now. Whoever I think will screw up the least,” said one respondent.

What they are looking for in a presidential candidate? Said one: “Someone who will follow the constitution, make our government smaller, bring back and encourage jobs in the U.S. and quit running up the national debt.”

Though the GOP may be overwhelming favored by advisors, not all took a conservative slant, however. One respondent stated the country would be benefit by “having a system where taxes are paid proportionally on income.”

Clients worried, too

If advisors and industry insiders are worried, so, too, are their clients. When asked what their clients biggest fears are, a clear majority answered the economy (64.1 percent), seconded by health care (52.4 percent). Rounding out the list were outliving their money (51.8 percent); the government (45.3 percent); and having to work longer than they planned (43.5 percent).

The response by advisors to those concerns is to be, well, an advisor. A majoritynearly 70 percentagreed they have taken on more of a teaching and coaching role with clients (and their employees) since Wall Street had its epic financial breakdown. This invariably brings the discussion to so-called “safe” products.

“Now, as seems common when the market collapses, prospects and clients may be looking for safer alternativesfixed/indexed annuities,” said one survey participant. “The market volatility and the low interest rates at the bank leave room for an educational/advising role to commence with existing clients.” 

Seniors vs. boomers

As more baby boomers enter retirement age, advisors have had to adjust their strategies accordingly. Roughly 73 percent conceded that their business has been impacted as the oldest of the baby boomer generation graduates to the senior class. (Interestingly, when asked if they customized their sales and marketing approaches between senior and boomer clients/prospects, most51.8 percentsaid no.)

“It has changed our marketing and services,” declared one respondent. “The boomers tend to leave a larger portion of their portfolio at risk with B/Ds [broker-dealers]. When they move some of those funds to FIA or other insurance products the B/Ds tend to slack off on their services to these clients. So, we have become securities licensed to move the entire portfolio under one roof to increase service and monitoring of the portfolio.”

Long-term care issues are also coming to the forefront. “Quite often, they’ve had LTC experience/knowledge with family members and friends,” said one survey participant.

“I am being overwhelming with people turning 65 and knowing nothing about Medicare and Part D,” said another. “The average time for an interview and applications for a Med Supp and Part D app is two hours.”

If there are differences between boomers and seniors, then there must be differences in selling to women versus men, right? Well, maybe not. Seventy percent said they do not customize their marketing approach for either gender.

Yet in their comments, advisors concede a change in tactics when working with men as opposed to women “Women are more into guarantees and risk averse while men still think they can do it all for free on the web,” said one participant.

“I am more low-key with women than with men,” stated another advisor. “With men, you usually have to be more aggressive in the reason for the coverage.” 

And the rest of the survey said…

Other findings from the survey were interesting, to say the least. Despite all the emphasis on technology to build a practice, survey participants were less than enthusiastic about social media, tablets and personal websites. While nearly 40 percent agreed that such new-fangled methods have increased productivity, 32.7 percent said they “complicated things” and 29.2 percent found they have “taken away the personal touch.” Somewhat surprisingly, only a bit more than half54.6 percentsaid they had a website or a blog.

That could be a mistake. Warned one survey participant: “You must keep the personal touch, but seniors are more technologically literate these days.”

Participants also weighed in on the never-ending debate over whether to get a securities license or not. The split was nearly 50/50 between those with a securities license (45.9 percent) and those without (54.1 percent). Of those without a license, 91.4 percent said they had no plans to get one.

Asked how they reel in new prospects, nearly 90 percent of survey participants said they come via referrals. Partnering with other professionals (such as CPAs or attorneys) and direct mail were also cited as successful methods by 46.3 percent and 28 percent, respectively.

There was good and bad news for FMOs: 50 percent said they do not work with an FMO. Of the advisors that did, 81.7 percent said their current FMO provides value.

Looking ahead, 50 percent cited Social Security maximization strategies as an area they were most interested in learning about or adding to their product mix. Next up was ways to combine fixed and fixed index products (41.6 percent).

As to where they see their business expanding in 2012, life insurance sales got the most votes (66.5 percent), followed by long-term care (48.8 percent), indexed annuity sales (47.6 percent) and Medicare Supplements (33.5 percent). Again, a flight to a comfort zone.

So there you have it. Where the industry stands and where it’s going in 2012. We’ll check back with you next year.

Want more information on our 2011 Industry Survey? Click here to read Part II.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.