Life Insurance Awareness Month: Part 1.
It’s an exciting time to be in life insurance. (Yes, you read that right.) Although the old adage that life insurance is “sold not purchased” may still ring true, life insurance product innovations over the last 15 years have piqued the interest of consumers. Especially since insurance distribution channels 1 have moved beyond captive agents and now include stockbrokers and investment advisors in addition to independent insurance agents.
The numbers prove the point. As of Q2 2017, sales were record-setting, particularly for indexed life.
‘Indexed life second quarter sales were $485.0 million; a figure that was up more than 11.2% when compared with the prior quarter, and up nearly 10.0% as compared to the same period last year. “Indexed life sales are on track to set another sales record in 2017” exclaimed Sheryl J. Moore, President and CEO of both Moore Market Intelligence and Wink, Inc. She added, “The most recent trends in product development are absolutely translating to increased sales of these innovative products.”’ 2
So what are some of these new innovations in life insurance?
To start with, many policies and policy riders have come about in order to answer the needs of Baby Boomers–10,000 of whom are turning 65 every day and will continue to do so until 2030.3
Family and spousal financial protection in case of a death is the basis and genesis of all life insurance, and this hasn’t changed. But in addition to that, life insurance companies are now answering pre-retiree and retiree demand with permanent insurance policies which can also offer lifetime income in retirement, spousal transfer benefits, long-term care coverage, disability coverage, income tax mitigation and tax-advantaged wealth transfer.
In particular, Shurwest offers financial advisors access to many types of life insurance policies, including IUL (Indexed Universal Life) policies which provide permanent life insurance along with the potential to grow the value of the cash portion of the policy based on the performance of a designated index or indexes. An IUL policy is not actually invested in the stock market, but interest is credited to the policy based on its index’s performance as spelled out in policy contract provisions. Some of the policies offered by Shurwest are uncapped in terms of crediting, and some offer new, simplified underwriting based on lifestyle indicators from a client’s “electronic footprint.”
Indexed Universal Life policies are not right for every client, but they can be good for some. IULs are sometimes called a “rich person’s Roth” by industry insiders since there are no income limits placed on them.
Watch for Part 2 in two weeks, when we will go into more detail about IUL policies.
If you are a financial advisor and would like more information about the ways Shurwest can help you and your clients with unique life insurance strategies, call us at 800.440.1088.