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Life Health > Life Insurance

Cold World, Warm Cocoa

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The mutual insurers that sell traditional products such as participating whole life insurance tend to be leery of trying to predict the future.

The only things certain under the sun are death and taxes.

“Past performance is no guarantee of future results” has become something like a secular hymn for the more respectable members of the financial services community.

But participating whole life has been around for generations, and there is something about pairing it with long-term care (LTC) benefits that seems as natural to some marketers as pairing warm cocoa and a warm chocolate chip cookie, or fluffy slippers and a big armchair.

Tara Reynolds, a corporate vice president and marketing specialist at Massachusetts Mutual Life Insurance Company, Springfield, Mass., said in an interview that she thinks financial services consumers are showing more appreciation for history than they were a few years ago, before the economy cooled.

MassMutual started selling individual long-term care insurance (LTCI) in 2000 and now has a 7% share of the individual LTCI market, Reynolds said.

The company has been selling dividend-paying whole life insurance since the 1860s.

“Whole life has been around for an awfully long time,” Reynolds said. “That tells us something.”

MassMutual sells stand-alone LTCI policies, and it also sells an LTC rider along with whole life policies. A purchaser who qualifies for LTC services can use the rider to accelerate payment of a portion of the death benefit payment.

A few years ago, the stereotypical young financial services customer was a daytrader — a kid with a laptop who was more interested in reaping returns in the course of a few minutes than in planning seriously for old age.

Today, Reynolds said, she sees young people talking about bread-and-butter protection needs and talking more about whole life.

Younger consumers seem to be much more interested in products that can help them manage risk, not just maximize short-term returns, Reynolds said.

Along with returning more to a slow-and-steady approach to financial services, younger consumers seem to be giving fees the kind of close, steely-eyed attention that Granddad might have given them.

MassMutual has tried to respond to consumers’ growing emphasis on value by avoiding moves to impose fees that might surprise customers, such as fees for customers who use the LTC benefits acceleration rider, Reynolds said.

MassMutual also works to appeal to the traditionalist by pointing out that it sells coverage through a force of 5,000 career agents. 

MassMutual does advertise, and it does have active Web and social media marketing programs, but “we don’t solely have to rely on advertising,” Reynolds said.

MassMutual is depending on the fact that those career agents are part of their communities — and have been part of those communities for many years — to appeal to consumers who have discovered that stability is an important virtue.


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