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The new life insurance sales process

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Why don’t advisors sell more life insurance? It’s the  process, not the  product.
Which weighs more, a pound of bricks or a pound of feathers? They both weigh the same: one pound. But, which process is harder? Each brick weighs more than a feather. So, which job is easier, gathering a pound of bricks or gathering a pound of feathers? You make the choice.
Which is more income:
  • $100,000 from selling life insurance;
  • $100,000 from selling investments;
  • $100,000 from selling annuities; or
  • $100,000 from providing financial planning advice?
Right. They are the same. But, which process is easiest? No one gets declined or rated when they invest or buy annuities? Suitability is a much easier standard to achieve than life underwriting. No one has to pee in a cup or see a medical professional for an investment or annuity.
Life insurance companies need to streamline the process of selling life insurance. And, many have. Take online applications. Repetitive information on the forms can be pre-filled and drawn from existing computer records.
Underwriters are beginning to understand the real risks and are offering underwriting concessions to ease the process. What are the odds of any term insurance policy ever paying a death claim? Most term policies lapse before the insured lapses. High early year cash value policies have lower risk that their traditional counter-parts, and therefore have lower risk.
Life insurance agents got seduced by assets under management (investments). But, the values go up and down, unlike traditional cash value. So, investment advisors got seduced by variable annuities with lifetime benefit riders (to protect the downside of investment risk).  If they can make the income they want without underwriters, why involve the underwriting process?
With that said, I strongly concur with the Life Insurance Foundation for Education (LIFE), “Without life insurance, a financial plan is just an investment portfolio that dies with you.”
I am providing you with this communication in my role as a Registered Investment Advisor of  Baystate Financial Planning  which is separate and unrelated from my role with Baystate Financial, MetLife or MetLife Securities, Inc.  Neither Baystate Financial, MetLife, MetLife Securities, nor its representatives offer these services