5 industry trends to watch in 2014

I’m talking about a quintessential type of life insurance product, one that can meet clients’ evolving needs — or their children’s needs — over the years, one that can provide early access to the death benefit if needed, one that offers a longevity rider that can provide an additional income stream if the conditions of the policy are met.

This type of flexibility can be invaluable in helping to ensure that clients have solutions not just for death but also for life. After all, today’s middle-market consumers are frequently challenged to try to fulfill multiple types of needs with fewer products. However, even high-net-worth clients can appreciate contingency plans and may benefit from having access to their life insurance policy if, for example, they suffer a stroke and need extended care or have other expenses arising from their condition.

Regardless of one’s station in life, it’s sobering to know that 70 percent of people turning age 65 can expect to need some form of long-term care during their lives, as the U.S. Department of Health and Human Services has pointed out. It’s absolutely critical that our industry provide products structured with the flexibility to be a solution for that type of need as well as other needs. Every consumer ought to be able to have reliable protection for a lifetime.

Evolving health care needs

Opportunities in 2014 lie elsewhere, too. Many consumers and those of us in the industry continue to keep a watchful eye on the evolving health care landscape, given (among other factors) the uncertainty that exists regarding the full ramifications of the Affordable Care Act.

The time seems ripe, therefore, for carriers and distribution partners to leverage the public scrutiny over health care access and costs to deliver groundbreaking products that give clients affordable safeguards against the financial perils of unforeseen accidents and potentially devastating medical conditions. With the knowledge that medical bills are a contributing factor in nearly 60 percent of bankruptcies, according to a study in the American Journal of Medicine, all of us in the industry have an enormous role to play in protecting clients from the unknown.

Given the often daunting costs, both direct and indirect, of unforeseen accidents, supplemental accident products can be common-sense solutions for many clients. Of great importance, as well, are optional accelerated benefit riders on other products to help protect against critical, chronic or terminal illnesses. These types of riders on the right products can be key financial solutions for clients — and matching appropriate solutions to client needs is where all of us in this business must focus.

Middle market consumers

Do take a closer look at the aforementioned middle market and your opportunities to expand your reach there. The market environment over the past year, combined with the American Taxpayer Relief Act of 2012 (ATRA), which took effect Jan. 1, 2013, have generated some robust opportunities to help clients adapt to the evolving economic and tax landscape. As a result, agents now have easy, online access to a wealth of carrier-produced materials that support life insurance planning in the new economy.

Some of the most pressing needs today include basic survivorship planning and helping clients determine whether the amount of insurance they purchased a few years ago is still sufficient to address their needs and objectives today. It is my belief that all of us in the industry bear the responsibility to help consumers hone in more closely on their needs, and determine the right amounts and kinds of products that can serve as solutions.

Carriers realize that producers focus intently on building out their own product packages and creating additional value for clients. Keep in mind that carriers with smart, nimble solutions can be terrific partners to enlightened brokers. We can best help you match specific products to consumer needs and drive your business if you invest the very worthwhile time to learn how the products work.

It’s also critical to understand with whom you are partnering — to take a close look at the balance sheets of the companies you represent. When I reflect upon the years that I served as a life insurance agent and then think about our industry today, the carriers that can meet the most stringent regulatory standards are the carriers that, if I were still an agent, I would strive to know more about.

As we all ride recent market developments and trends into the new year, I believe that the power to more strongly sustain and grow your business will likely correlate closely to the financial strength of your carrier partners and their ability to couple consumer-focused thinking with the design of superior, differentiated and flexible solutions for clients and prospects. If the emphasis is first and foremost on serving those who look to our industry for guidance by providing them with smart solutions for a lifetime, the challenges of today transform into the opportunities of tomorrow.

For more on the year ahead, see:

Reflections from an optimistic NAILBA 32

Insurance regulation: 5 things to watch in 2014

The New Year’s resolution every advisor should make