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MIB Life Index: Small Victory

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Thank goodness for small victories. I mean really small victories.

After years of negative figures, life insurance application activity appears to have actually risen by a miniscule amount in 2011. This according to the MIB Life Index, the industry’s timeliest measure of application activity in the United States.

Thanks to a strong December (+5.8%), the MIB Life Index was able to squeak out a 0.2% overall increase in application activity for 2011. It’s not much of a positive number, but it is on the plus side instead of a minus, reversing a disturbing trend in the index.

“The index has lost more than 4% since 2007 but the pace of decline has lessened,” says Lee Oliphant, MIB’s CEO. “2011 is slightly positive and a strong fourth quarter is cause for optimism as we look toward 2012. We believe market stability in challenging economic conditions may signal a new floor from which the industry can grow.”

Let’s hope so. In addition to the index being off 4.1% since 2007, it is down 15.3% since 2003. Those figures back up LIMRA’s study back in 2010 announcing that the proportion of U.S. adults with life insurance coverage had declined to a 50-year low. That study said 30% of U.S. households (35 million) had no life insurance coverage whatsoever — up from 22% in 2004.

Study after study seems to confirm Americans know they need life insurance — or more life insurance coverage for those who are dangerously underinsured — but they won’t do anything about it until someone contacts them about it. And they aren’t being contacted. In January, LIMRA released a report saying only 39% of U.S. households recall having an opportunity to buy life insurance in the past two years. I’d peg that figure as being optimistically high.

Producers need to see the people and give them the chance to do the right thing. Don’t let them have that easy excuse of, “no one ever asked me about it.” Do your part in helping the MIB Life Index hit 1% growth for 2012.