American National Insurance Company 2020 Carrier Forecast

Nothing Is More Expensive Than A Missed Opportunity

Was 2019 a flat or down year for you? Not for American National Life Insurance Company which had another stellar year of life insurance production growth. Although complete details are not released yet, I can say we are happy with our continued year over year growth while the industry remains relatively flat. Why are we consistently growing our life business? A lot of credit must be given to an opportunity we seized upon in 2011. This opportunity is the focus of a vast number of agents and agencies as a catalyst to grow their business year over year too. What is that opportunity? First ask yourself the following questions with regards to your production in 2019:

  • Are you increasing your life sales with existing personal clients?
  • Are you increasing your life sales with existing business clients?
  • Are you increasing your life sales with new personal clients?
  • Are you increasing your life sales with new business clients?

If you answered “no” to any question above, don’t continue to miss out on this huge opportunity in 2020. What is the opportunity you are missing? It is as simple as adding living benefits as a core product in 2020. Living benefits offer your clients access to the death benefit while they are still living, assuming an event or trigger has occurred which has dramatically shortened the insured’s life expectancy. Products offering living benefits should include the full suite of chronic illness, critical illness and terminal illness. All three are part of a complete package of protection for your client.

Offering living benefits will increase both personal and business sales enabling you to help your clients be better prepared for the unexpected while living. Here are some examples of how you can make 2020 your year of increased life sales by offering living benefits as a core product.

Existing Personal Clients—Review your book of personal clients. Do any of your clients have the “outdated” type of life insurance or the “updated” type of life insurance? Outdated life insurance does not contain living benefits. Updated life insurance contains all three living benefits. When was the last time you offered your clients a no cost life insurance checkup to make sure they have updated life insurance? Try it. Your clients will respond positively, and your life sales will grow by doing what is right for your clients.

Existing Business Clients—Review your book of business clients. How many have buy/sell coverage in place which is outdated….not containing living benefits? Why should you be concerned with buy/sell coverage where no living benefits are included? Think of it this way. What happens if one of the owners in an outdated buy/sell agreement survives a severe heart attack but can’t return to work due to complications from the heart attack? The business, which the buy/sell was supposed to protect, must continue to operate as normal without one of the business owners. The business will probably lose customers, income or may have to close altogether without two healthy owners. The healthy owner(s) must somehow pick up all the responsibilities no longer covered by the health impaired owner, while continuing to pay the health impaired owner a regular salary. Remember the current outdated buy/sell agreement is triggered at the death of a business owner, not when a business owner has a life shortening illness and cannot return to work. If the health impaired owner’s life expectancy has been dramatically shortened, this is where living benefits may be able to pay a benefit to help the business continue during the health impaired owner’s absence.

New Personal Clients—If you are struggling to develop new clients, begin offering life insurance checkups as part of your practice. Many existing policies do not offer living benefits and therefore leave policyholders exposed to devastating health events. An example may include an insured who was required to have a life insurance policy as collateral for a loan thereby paying off the loan if the insured passes away. But what happens if the insured suffers a life shortening health catastrophe and cannot work? The loan still needs to be paid, yet the insured may not have the income to continue paying the loan. This is where living benefits may be able to assist the insured with much needed cash flow enabling the insured to continue to meet loan obligations.

New Business Clients—Consider offering a no-cost business insurance checkup to potential business clients. Again, does the business owner have the outdated or updated life insurance? Just like the previous buy/sell example, all business insurance should include living benefits. For example, let’s look at key person coverage where there is an existing key person policy for $1,000,000 on a 55-year-old. The key person is the head of operations managing all personnel, plant and equipment allowing the owner to develop marketing plans and focus on sales. This is a very successful team allowing each individual to focus on their strengths while minimizing their weaknesses. When the key person experiences a life-threatening stroke and cannot return to work, the owner now must fulfill the role of operations manager too but cannot afford to allow marketing and sales to suffer. The existence of a simple life insurance policy without living benefits cannot help the owner’s cash flow to assist in hiring the key person’s replacement to continue the business. Nor does the current policy offset lost sales while the owner now is managing both operations and sales. Life insurance with living benefits is the answer.

If you have been missing the opportunity of offering living benefits to existing customers and new customers alike, stop. As I. M. Pei, the great Chinese-American Architect once said, “Stop worrying about missed opportunities and start looking for new ones.” Offering the complete suite of living benefits is your new opportunity. Educating your existing clients about living benefits and offering living benefits to potential clients is your new opportunity for 2020. Don’t offer any life insurance to anyone without first exploring all the benefits of living benefits.

As you can see there is a huge opportunity for you to grow your business by adding living benefits as a core product in all your sales opportunities, personal and business alike. When you decide to move forward with offering living benefits, make sure of the following:

  • All products offered by the carrier should include living benefits. Many carriers offer no living benefits or only offer living benefits on a few products. American National offers all living benefits on all products including term, guaranteed universal life, indexed universal life, universal life and whole life.
  • If purchasing term, make sure the product(s) available for conversion includes living benefits. Some conversion products do not include living benefits or have limited living benefits available.
  • Living benefits should include chronic illness which offers a benefit when an insured cannot perform two of six Activities of Daily Living (ADLs) or experiences a severe cognitive impairment. Be careful where there is a healthcare professional attestation requirement confirming the chronic illness is permanent. Healthcare professionals are very hesitant in providing this attestation.
  • Living benefits should include critical illness which has as many as 16 triggers as with American National’s products. Some companies have branded other names to the same triggers included in the critical illness living benefit offered by American National. The quantity of triggers may vary by state.
  • Living benefits should include terminal illness which offers benefits when the insured’s life expectancy is less than 12 or 24 months depending on the state where the policy is sold.
  • Lastly, check the limits of coverage and waiting periods with all three living benefits. Many carriers promote living benefits while at the same time dramatically limiting the amount available for a claim or require long waiting periods before a living benefit is available.

Although the discussion above centered around reviewing existing policies to update them to include living benefits, replacement of business may not be suitable for every client even if the existing coverage does not contain living benefits. Every client is different thereby every situation needs to be suitable for the individual client.

To all of you, agent and agency alike, who are growing your business with American National Insurance Company, we want to say, “Thank You!” for another great year in 2019. For those of you who have not had the American National experience, we ask that you give us a chance to earn your business in 2020 so we can help you grow your production using living benefits as we have done for so many in the past.

All the best for you in 2020! [CK]

Craig W. Klenk, CLU, ChFC, MSFS, Vice President Brokerage Sales, American National Insurance Company