This is an age in which niche products are getting more attention.
Interest rates may be rising but are still low. The demographics of the population are changing. Regulations are confusing. Growth rates for sales and revenue for the products life and health insurers still are, possibly, happy about selling, are often in the low single digits.
One way for agents and brokers to cope is to look for products that haven’t received much attention in recent years, and might sell pretty well if they just got a little more love.
One candidate: children’s life insurance.
Gerber Life Insurance Company, a unit of Nestle, has helped promote the idea of “juvenile life insurance,” and put some awareness of the concept of life insurance in the heads of small American children, by marketing its life insurance products for children heavily throughout the United States.
Some of the first conversations U.S. parents have with their children about life insurance often occur when the children notice the Gerber Life baby looking out from a Gerber Life ad.
But most other players in the sector take a low-key approach to discussing the products. Many life insurers of all sizes list “juvenile life insurance” on their product menus, but trade groups rarely rush to publish quarterly or annual juvenile life insurance market updates.
Craig Simms, the chief marketing officer at Vantis Life, a Penn Mutual unit, is responsible for helping Vantis Life market juvenile life insurance, along with the company’s other life products.
For the most part, the product “really doesn’t get a lot of attention,” Simms said in a recent interview.
One challenge is that talking about the alleged primary purpose of a life insurance policy for a child is difficult, Simms said.
The last reason most parents would consider buying a juvenile life insurance policy is the death benefit, Simms said.
“God willing, your child will never need the death benefit,” he said.
U.S. insurers sell a number of different types of juvenile life insurance, including juvenile term life, juvenile whole life, and juvenile indexed universal life policies.
Products come from a wide range of companies, including Gerber Life and many other life insurers of all sizes.
The current size of the U.S. juvenile life market is not clear.
True Blue Life Insurance says in the baby life insurance section on its website that it believes that insurers have millions of juvenile life insurance policies in force in the United States.
Babies and small children who buy the policies often can lock in coverage at very low rates without little or no medical underwriting, and the policies that cover them often come with future benefits increase and coverage purchase options.
The Gerber Life Grow-Up Plan policy, for example, comes with a built-in feature that doubles the amount of coverage in force when the child turns 18, without any change in the premium, and gives the policy owner a built-in option to buy more coverage at several points in the insured’s life.
A baby who started with $50,000 in coverage could end up $100,000 in low-priced coverage at age 18, and would be able to exercise options that could increase total coverage to $500,000, according to marketing materials posted by a Gerber Life product distributor.
Analysts from Life Happens and LIMRA teamed up to publish some survey data on how consumers see juvenile life insurance.
The survey team found that about 20% of the parents and grandparents who participated in the survey had already purchased children for their life insurance or grandchildren.