In a recent news release from our industry’s most admired information-gathering institution, the great folks at LIMRA offered some insight and optimism (perhaps a somewhat tarnished silver lining) about life insurance purchasing gains during year two of the COVID-19 pandemic (https://www.limra.com/en/newsroom/news-releases/2022/limra-2021-annual-u.s.-life-insurance-sales-growth-highest-since-1983/). Released on March 16, almost two years to the day from the date that I was forced to succumb to the reality that the initial strains at least of COVID were real, scary, and that life as I knew it would have to be altered quite substantially. My wife and I had to fly home from The Marketing Alliance meeting in New Orleans to attend to a family emergency. Just before leaving, NOLA had announced that the first two confirmed cases of COVID-19 had been found at a Marriott on Canal Street—fortunately the one on the other side of Canal from the Marriott hosting TMA. By the time we had arrived home my wife had a pronounced sinus infection (as she occaisionally gets from travel) and visited her doctor—who determined we had just traveled and indicated she needed to quarantine for 14 days. There were no tests yet. By the time her quarantine was served, our intention to travel to Oregon was squashed by severe warnings against air travel and airports, mandatory quarantines upon arrival for visitors, and complete lockdowns banning all visitors to hospitals and care facilities. Grocery shelves were soon barren and hand sanitizer and TP virtually became black market boondoggles. Thank God Oregon wasn’t run like New York. Bought Mom almost another full year.
Awkward segue back to the LIMRA info. I quote: “Propelled by 26 percent fourth quarter premium growth, total life insurance new annualized premium grew 20 percent in 2021, representing the highest annual growth since 1983, according to LIMRA’s Fourth Quarter U.S. Retail Life Insurance Sales Survey.” Further, “Policy sales improved two percent in the fourth quarter. For the year, policy sales were up five percent, which is the highest annual growth since 1983. With the exception of term products, all major product lines experienced policy sales growth in the fourth quarter and for the year.
“In 2021, whole life (WL) new premium grew 20 percent, year-over year. WL held 35 percent of the individual retail life insurance market in 2021. LIMRA is forecasting whole life sales to grow as much as 10 percent in 2022, with continued growth in 2023. Year-to-date, VUL new annualized premium increased 74 percent. VUL market share was 12 percent in 2021, which is the highest it has been since 2008. For the year, IUL was 21 percent higher than 2020 results. IUL represented a quarter of all individual life premium in 2021. Fixed UL ended the year up 10 percent and held eight percent of the total premium market share. In 2021, term new premium increased five percent, compared with 2020 results. This represents the highest premium growth for term premium since 2007.”
But term policies issued actually declined by one percent from 2020 (https://www.limra.com/siteassets/newsroom/fact-tank/sales-data/2021/q4/fourth-quarter-2021-individual-life-final.pdf). Quite frankly this is the number that surprises and significantly dismays me.
One could and maybe should see the numbers from LIMRA as very encouraging, particularly when viewed through the lens of all the drastic changes to the life insurance sales process brought on by the pandemic. “Life insurance is sold, not bought” is a phrase I’ve by and large considered gospel for my entire career serving this industry. And face-to-face is the best way of course…but COVID said “Not no more.” You all are to be applauded for your ability to morph your efforts to continue to be able to protect families.
And it makes absolutely perfect sense that devastating fatality numbers from COVID-19 would slap a significant percentage of Americans in the face with their own mortality and spur them to move purchasing life insurance closer to the front burner and hopefully turn up the heat. But let’s consider this. Of all life products, term is the one most easily commoditized and that has shown the most positive foothold in online/contactless sales thanks to great innovators like SelectQuote. And I’m harangued daily on Sirius by “Big Lou…he’s like you…he’s on meds too.” (And I freely admit that I’m unreasonably put off by his divination that I am, in fact, “a bit porky.”)
Where is all this going? I’m frankly shocked that the figure on term policies sold wasn’t positive and much much higher. The positive figures in the LIMRA results are all for products with higher premiums than term and I would have hoped that the lower price of term combined with the ease of access would have brought more lower income “Somedayers” into the ranks of the insured—at least at some level. We’re all aware that there is a vast chasm in the populace of the un- and under-insured. Looking at just the words under-insured and uninsured, one must grant that there are some among the wealthy that feel their assets are sufficient and they see no need to purchase any or perhaps more life insurance despite its clear financial advantages. Most poignant is the fact that there are way too many in our society where even the lowest premiums would actually take food off the table. Both these demographics skew the statistics as they aren’t now nor are they likely to be realistic prospects for life insurance, yet they are hypothetically or by projection included in the impact of the numbers. So, it is assumed, are those whose health makes them uninsurable.
But let’s not cloud the issue with the facts. It’s undeniable that there is still a vast multitude of families out there who could afford and qualify for our products, albeit with some changes to their budget perhaps, and who are without any or sufficient coverage to insure their spouse can remain in the family home and their children might have the ability to go to college.
As great friend and Broker World columnist Dave Murphy eloquently illustrates in this month’s Focus article, they are the people who, in near anonymity, make every day of our lives better, easier, more satisfying, less troublesome. The mechanics…servers…administrators…bar tenders…cashiers…HVAC guys…or maybe the new marrieds who finally made enough two wage earner income to move in down the street last month and wave every time they see you walking your dog. The list is almost endless. And you don’t even have to “prospect” for them. They are right in front of you every single day. You have your own unique expertise that they likely haven’t been sufficiently exposed to. You can help their families. You’ve earned enough in this great industry that they are able to be of service to you on a daily basis. Maybe carry a few extra business cards in your wallet and please ask just a few questions to see if you, in turn, can be of service to them.[SPH]
