Life insurance is the industry’s bland middle child.
Clients ought to have a policy or two and it’s a good earner for agents, but few heartbeats accelerate at its mention. This neglected by dependable old product may enjoy some unaccustomed attention this year, particularly from customers who are getting sick at the equity market’s carnival-ride perturbations.
Ernst & Young have released their outlook study for 2019. They note that one factor hurting traditional insurance products has been low interest rates. Low rates are good for equity markets. Many investors have earned big and perhaps learned to live with the nauseous swings. This year, a strong jobs situation and rising interest rates suggest that traditional life policies may again find favor with clients.
Lincoln Financial’s president told an industry conference recently that life insurers are more interested in the interest spread than the rate itself. Spread compression has been cutting into his company’s growth in recent years he said. While nobody likes excessive volatility, life insurers could benefit in this situation, he said.
The so-called Millennials, the generation advisors and agents are most keen to crack, seems little interested in life insurance – they’re too busy living for today. But as the worrisome news filters in, they are perhaps becoming more interested in weaving a safety net. Are the Millennials reachable? Do they simply need time to age and mature? We think they need far more attention from insurance agents, because there’s no escaping life’s risks.
Longevity trends look worrisome. The US opioid crisis is now so severe that its ravages are showing up in declining life expectancy. Insurers must also consider whether Ebola or another virulent viral strain could emerge and their clients must be apprised of any risks as they are clarified.
For more information, please read:
5 Questions About Life Insurance for 2019 | ThinkAdvisor