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An Agent’s Case for Term Life

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What You Need to Know

  • Term life suits the needs of young families.
  • The coverage is affordable.
  • Agents can help clients customize it.

The COVID-19 pandemic has caused everyday Americans to seriously consider their own mortality and the potential financial consequences for their loved ones. As a result of people’s heightened focus around health and financial security, we have seen an increased awareness of the value of life insurance — particularly with younger generations.

In the first six months of 2021, the total number of policies sold increased 8%, compared with prior year results. This is the highest policy sales growth recorded since 1983, according to LIMRA’s Second Quarter U.S. Individual Life Insurance Sales Survey. LIMRA’s research also shows that 36% of Americans plan to purchase life insurance this year and when it comes to millennials, 48% say they plan to buy coverage.

The affordability and flexibility of term life policies have always made them popular life insurance products. Drawing people to the product now, is not just the protection of a death benefit, but also the protection of insurability. After all, a consumer will probably never be as healthy as they are today.

Agents and advisors have a compelling case to make to consumers: Term life offers a simple, affordable and flexible way to protect yourself and loved ones from financial hardship.

1. Term life is straightforward.

It is easy to understand how the policy works and its reciprocal benefits. If a consumer needs life insurance for a specific period of time, term life insurance enables them to match the length of the term policy to the length of the need. Most commonly, people buy this policy to protect their families from financial hardship due to loss of income.

2. Term life is cost effective.

It is affordable and allows people to buy just the right amount of coverage they need for when they need it most. For example, single parents are often concerned about their children being able to afford college tuition in the event of their premature death, but term life can account for that.

Typically, premiums remain the same throughout the length of a term life policy. And,

younger policyholders gain a greater amount of value for less cost. This means that for any younger consumers thinking about life insurance, term life makes sense to consider sooner rather than later.

3. Term life can be customized.

In an age of personalization and innovation, term life insurance can be structured to fit a consumer’s unique financial situation and requirements. This is particularly appealing to millennials, a generation accustomed to being able to tailor and customize everything from their social media feeds to their investment or savings products.

Term Life can be customized in several ways: value of the death benefit; term length; level or decreasing death benefit the life of the policy; whether the policy is renewable; and riders. With these important options available, it comforts consumers to know that term insurance can be more than a death benefit.

When the capabilities of life insurance are clearly described to consumers, many people may be surprised when they see what their dollars can do for them.

Understanding a person’s needs and having the most efficient and constructive conversations about solutions — whether for term life or otherwise — will help people feel confident in their future and be as best prepared and protected as possible. The qualities of term life are clear.

(Image: WS-Design/Adobe Stock)

Mark A. Peterson (Photo: AIG Distributors)Mark A. Peterson is executive vice president of and chief distribution officer for life insurance at AIG Financial Distributors.