Individual life insurance sales picked up in the early parts of 2015, according to a new study released by LIMRA. The uptick in sales was strong across all sectors, which indicates increased interest in the value of life insurance.
The LIMRA study noted that this represented an improvement from last year. Years of low interest rates caught up with the insurance market in 2014, and forced many providers to raise their prices. This curtailed consumer spending, but it’s evident that demand for these products remained strong. The rebound in life insurance sales demonstrates a strong market demand for these products, and hints at ways that financial professionals can further expand their sales.
Retirement planning strategies
Financial professionals who want to capitalize on the increase in life insurance sales should focus on combining life insurance policies with other options that also offer retirement income benefits. Even the wealthiest clients are concerned about sustainable retirement income that will protect their principal from unexpected medical costs and other expenses. Producers can work with clients to build retirement plans that provide consistent income through a combination of life insurance products.
Life insurance is a crucial part of this strategy. A new study conducted by One America analyzed a range of life insurance portfolio options, and compared the retirement incomes provided by each portfolio. Researchers concluded that the ideal retirement strategy incorporates investments, single-life annuities and life insurance rather than relying on investments alone. This portfolio yields greater income overall and gives the client greater legacy potential.
Annuities provide an opportunity
While life insurance sales were up overall, and individual sales were particularly strong for life insurance, annuities slid in the past few months. During the first quarter of 2015, LIMRA reported annuity sales declined 7 percent when compared to the previous year.
This decline signals a space for financial professionals to expand their business. The increase in life insurance sales indicates that consumers are interested in insurance solutions as part of their financial planning strategy, but the decline in annuity purchases points to an incomplete understanding of how best to maximize retirement income. Financial professionals should aim to educate their clients about the value of a plan that combines these products, and can work with consumers who already have a life insurance policy to expand their portfolio for additional retirement income success.
Time for review
Regular policy reviews help financial professionals stay abreast of their clients’ changing needs, and provide a quick way to identify areas where a client’s current portfolio is falling short. Different clients have different goals for their financial future, but the ability to tap into retirement income is a universal desire among consumers, according to a survey from LIMRA. Clients who did not structure their portfolios with an eye toward retirement income may need a review to see their current plan’s issues. This can lead to additional sales as the financial professional adjusts a client’s holdings to bring them in line with the person’s financial goals.
Financial professionals who are creating a comprehensive plan for retirement income should not ignore long-term care policies either, or ones that combine life insurance coverage with long term care riders. These act as a powerful safeguard against medical expenses and other costs that can rapidly eat into a client’s principal. Any insurance portfolio requires consistent upkeep to remain relevant to a client’s needs and desires. By engaging in regular policy reviews and presenting clients with a wide range of products, financial professionals can give their clients financial confidence that builds a trusting relationship over the long term.