Results from a 2018 Life Insurance Needs survey completed by Allianz confirms what we in the financial services business have long suspected. Whatever we’ve been doing to sell/recommend permanent life insurance is no longer working. Some interesting findings as follows:
· 66% of consumers are unsure or don’t believe benefits paid from life insurance are not taxable.
· 51% are unsure or don’t believe cash value from permanent life insurance can be used to help fund college educations, supplement retirement income or meet other financial needs.
· 85% said that a source of tax-fee income in retirement is what they find most valuable in a financial product
According to LIMRA, the share of Americans with at least some life insurance has fallen to less than 60% from 77% in 1989 and the sale of individual life policies has fallen by 40% since the 80’s. These are all fairly dismal statistics that beg the question, what is the industry doing about it? All other industries have gone “Netflix” where the life insurance industry is stuck in “Blockbuster” mode.
The life industry continues to operate like Ned Ryerson (remember the pushy salesman in the movie Groundhog Day?) with hard to understand multi page paper illustrations that are impossible to sell from. This causes producers and agencies to slight compliance procedures and create custom spreadsheets by taking hours to “cut and paste” from the illustrations onto an Excel file. This while all other industries are selling their products and services online and digitally. But just like Netflix had the vision.to stream digitally in 2007, then in 3 short years pushed Blockbuster to bankruptcy in 2010, I believe the life insurance industry is currently at that same stage. Adapt or die. Life insurance carriers and distribution must develop a digital strategy to adapt.
What if I told you that there is a platform that takes illustration data for up to 40 carriers and 280 plans and creates automatic spreadsheets and an interactive visuals called “The Morningstar of Life Insurance” by Financial Planning Magazine. Finally, a digital platform that is built for today’s consumer that enables the agent/advisor to educate and explain how cash value life insurance works. The platform is called Ensight made by a tech firm in California named Assurance. Some key features that Ensight provides:
Single Entry of data: You enter the insured information and case design details once and then select the carriers and plans you want to illustrate. No more toggling between carriers to rerun illustrations
Automated spreadsheet: With the push of a couple buttons you can create side by side comparison spreadsheets with the complete carrier illustration attached.
Fiduciary compliant: Through a revision history, the platform retains every illustration added, taken off, printed and sent to a client. It is also a platform that shows features and benefits of several options enabling the demonstration of “best interest”.
Speaks Robo: While the illustrations is able to be shown in side by side comparison spreadsheets, they are also rendered in linear graphs that are interactive.
Enables online selling: Since Ensight is a visual digital platform, it is best suited to be shown either on a tablet in front of the client or through video conferencing. No more flipping through endless pages of illustrations. A simple, clean visual proposal platform that clients can actually understand.
Platform Video here: https://vimeo.com/252256256/bc46e300b7
When I first got in the business too many years ago (which predates carrier illustrations), I was taught to recommend permanent life insurance through a method we called “Educate to Sell”. It was a process by which we would do an initial fact finder, identify the potential needs of the prospect and once we had done that, educate them by explaining the various types of life insurance through graphs. Then after having explained visually the differences between Term, Variable, Whole Life, UL, etc, we would ask the client, “what type do you think makes the most sense for your situation?” while looking at the graphs. After having been educated on the various types of life insurance, they could make an educated decision on what product type made the most sense for them. Ensight is essentially “Educate to Sell” for the digital age. The majority of prospects and clients simply won’t buy what they don’t understand (and if they’re coerced into buying, it won’t stick). Educating them through a clean interactive visual format is by far the most effective way to do this type of business in the Netflix and Amazon era.
So I have hope that the industry can pull away from the statistical downward spiral as the tools used become more current and easier to use. The next several years will see some carriers and distributors go the route of Blockbuster while others will see the future and go the path of Netflix. How about you?
“You never change things by fighting the existing reality.To change something, build a new model that makes the existing model obsolete.” -R. Buckminster Fuller
PS-Full Disclosure: I am involved in the tech start up Assurance that has developed the Ensight Platform trying to drag the industry kicking and screaming into the digital era