Archives for May, 2012

Missing an Opportunity

May 31st, 2012, Comments Off.

Financial advisors often miss the opportunity to speak to their clients about the important role life insurance products can play in financial planning, according to a recent survey by Saybrus Partners, Inc.

The survey found that more than half (56 percent) of financial advisors do not speak regularly to their clients about life insurance. The survey polled advisors at the Financial Advisor Retirement Symposium held this May in Florida.

Only one-third (34 percent) of financial advisors said they were “very comfortable” in recommending life insurance to their clients. Nearly one in five admitted to being “uncomfortable” or “very uncomfortable” in recommending life insurance policies to their clients.

“Our experience has shown that clients are looking to their financial advisors for comprehensive financial planning. Standard practice is that the planning process should begin with a foundation of protection and conclude with a wealth- distribution phase,” says Kevin Kimbrough, national sales manager for Saybrus Partners. “Therefore, it is critical for advisors to consistently include life insurance in their clients’ financial plans.”

The reluctance of financial advisors to speak to their clients about life insurance is consistent with consumer perspectives that were found in a survey conducted by Saybrus Partners last year.

Lack of regular policy reviews Even if a client has a life insurance policy, financial advisors don’t necessarily make it a part of their annual review. Less than half of those surveyed (47 percent) said they review existing life insurance policies with their clients on an annual basis.

Twenty percent said they only assess their clients’ policies when they know of a major life change, such as marriage or the birth of a child. That review is most often narrowly focused on whether the policy is adequately meeting their current needs. Some financial advisors (10 percent) discuss clients’ policies only if clients raise the issue.

“Advisors are constantly reviewing the performance of their clients’ stocks and other investments. By contrast, they are reviewing their clients’ life insurance policies far more infrequently, based on life events or client requests,” says Kimbrough. “This means that many of their clients may be lacking essential protection for themselves and their families or missing opportunities to more effectively transfer their wealth to the next generation. Life insurance is not a set-it-and-forget-it product. It should be monitored and adjusted, if needed.”

“For example, market volatility can have a strong impact on the performance of variable life insurance products, and fixed products can suffer in a low interest-rate environment, potentially leading to unintentional policy lapse. Other issues include the possibility of missing out on more affordable rates and newly available features like LTC riders,” Kimbrough adds.

When asked what would contribute to making them more comfortable in discussing life insurance, 42 percent of financial advisors said they would be interested in becoming more comfortable discussing life insurance either through working with a life insurance specialist who can help identify solutions for their clients or attending a life insurance seminar aimed specifically at financial advisors.

The survey of 103 financial advisors was conducted by Saybrus Partners at the 2012 Financial Advisor Retirement Symposium. The 2011 survey was conducted online within the United States by Harris Interactive on behalf of Saybrus Partners from July 22 to July26, 2011, among 2,410 adults ages 18 and older, of whom 786 said they currently have a financial advisor.

Saybrus Partners, Inc. is a life insurance partnership firm that helps institutions and financial professionals nationwide make life insurance a consistent part of their practice. For more information, visit www.saybruspartners.com and www.phoenixwm.com.

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By Ayo Mseka
Editor-In-Chief
Advisor Today

 

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Shopping for Insurance at Work

May 29th, 2012, Comments Off.

A LIMRA study of Americans’ buying habits found that nearly 20 percent who shopped for life insurance went through their place of work, and 75 percent of workplace shoppers actually bought life insurance.

“More and more people are turning to their place of work to get the financial products they need,” says Kim Landry, analyst, LIMRA Group Product Research. “Clearly, the convenience of having the resource at their place of work, coupled with the feeling of security felt by working with someone their employer has (implicitly) approved, is drawing consumers to this channel.”

Thirty percent of workplace shoppers for life insurance products revealed that they shopped simply because the product was offered to them at work. LIMRA’s research has shown that life triggers, such as changing one’s marital status or having or adopting a baby, are the most likely to drive people to shop for life insurance. Similarly, in the workplace, a change of marital status or a new baby rounds out the top three reasons consumers said they shopped for life insurance.

Defining the workplace shopper

According to the study, workplace shoppers are more likely to be male than female (55 percent vs. 45 percent). More than three-quarters are married or living with a partner, and a majority with children who are under 18 in their households shopped at the workplace. Workplace shoppers also tend to be

younger than those who shop through other channels; they have higher average incomes than other shoppers and tend to have more investable assets.

Rating producers

LIMRA also asked these shoppers to provide their opinions of the producer they met at work. The good news is that 8 in 10 workplace shoppers felt their producer provided good information about the policy, and was very knowledgeable about insurance in general. Nearly three-quarters felt they could trust their producer.

Unfortunately, shoppers also provided some negative feedback. Nearly half of workplace shoppers said their producer failed to follow up with them (a third of workplace shoppers who didn’t buy said that they were not finished shopping), and 4 in 10 workplace shoppers didn’t feel that their producer considered what they could actually afford. More than a third said they didn’t receive enough product options.

Enhancing your ratings

LIMRA identified three things workplace producers can do to improve the opinions of workplace shoppers:

  • Since workplace shoppers tend to be younger and less experienced, producers should ensure that these workers fully understand the products and how they work.
  • Provide additional information if needed during the decision-making process, such as printed reference materials or a link to information online.
  • By all means, follow-up with the workplace shopper.

“We were surprised to see so many workplace shoppers feeling that they needed more follow-up from the sales rep, which was a significantly higher percentage than we found for consumers who shopped through other channels,” notes Landry. “Our behavioral economic research indicates that consumers may need time to consider their decision and, as our study found, if we don’t follow up with them, we may be leaving money on the table.”

For more information, contact Catherine Theroux at 860-285-7787 or at www.limra.com.

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By Ayo Mseka
Editor-In-Chief
Advisor Today

 

Tags: ,