Heard In The Hallways: LIMRA Life Insurance Conference

Question: On a scale of one to 10 with 10 being the most promising (highest), where are life insurance sales heading in 2015?

“I’d give it a nine. My reason is I believe the recession of 2008-09 is over and people are focusing on their needs for retirement. This is especially the case with the 30- and 40-year-olds who realize they will be on their own for retirement income. They do not have traditional pensions, though they may have 401(k) retirement plans from work. So they are realizing they need to be diligent in investing and saving. That means the industry will see a boom, and it will happen this year. This will include life insurance. I think life insurance will be the forced savings plan for many, along with annuities. There are whole life plans being sold that offer a lump sum rider. The rider allows the policyowner to dump in additional funds to up to, say, three times the policy’s annual premium. Some allow additional deposits of up to 10 times the premium. The advisors are recommending this for people, such as those age 40 and up, who want to save for retirement when they have additional cash. The lump sum rider is elected and underwritten. It pays dividends. The funds go into the policy’s cash value, increase the life insurance in force, and can be drawn upon later on by loans or withdrawals. Advisors are selling this as a retirement package. This is one type of life insurance that is doing well today. Our company offers this kind of product, and our whole life sales were the strongest last year as they have ever been.”

– Barbara Repscher, new business manager, OneAmerica, Indianapolis, Ind.

“It will be 6 to 6.5, a little above flat-lining.  I think the industry will see a slow trend up from where we’ve been since the 2008-09 recession. One reason is that carriers are getting more innovative in products. For instance, we are seeing life policies with a ‘senior twist,’ meaning they have features that older buyers will want. There are also new forms of return-of-premium policies, and policies issued with ‘instant decision underwriting’ (where the agent gets an underwriting decision instantly by phone or internet. Another reason is the companies are getting more sophisticated in their use of technology, making greater use of call centers, and increasing their adoption of multi-channel distribution. However, the changes are happening slowly, so that is why I’m not predicting high growth in sales. The sales will grow, but slowly.”

— Mitch Dougen, director-administration systems, Americo, Kansas City, Mo.

“Industrywide, I think it will be a five at best. However, it will be higher for my own company, because we’ve been growing life sales by 10 percent to 15 percent a year for the last 15 years. We’ve been able to do that because we only sell pre-need and final expense life insurance. That’s a niche market. The products appeal to people who may not be able to afford traditional individual life insurance but who still want to pre-arrange their funeral and see to it that a little is left over for their heirs. They can afford a small-face, low-cost policy for this purpose. As for the life insurance industry in general, I see no reason for the sales to go up a whole lot this year, other than for sales of niche policies, retirement products (especially for baby boomers), and annuities. It’s all based on customer needs, and for many people, the need is not for high-priced life insurance.”

– Gary Means, vice president-information services, National Guardian Life, Madison, Wis.