October 4, 2010
Letter to the Editor
The Wall Street Journal
1211 Avenue of the Americas
New York, NY, 10036
The Complete Picture
Shift to Wealthier Clientele Puts Life Insurers in a Bind (Oct. 4, 2010) It is true, wealthier Americans spend more on life insurance than middle-income Americans – they generally need more coverage and therefore pay higher premiums. Many experts recommend buying enough life insurance to cover six times salary so the family can meet its financial obligations if the primary wage-earner dies. Clearly – larger policies will be bought more often by more affluent households.
But this doesn’t provide the complete picture. When LIMRA releases its sales results, we always give two metrics: premium and policy count. The reason we share both is because each is very important to get a complete picture of the life insurance market.
Let’s take a look at what happens when you look at policy count.
The majority of existing permanent policies are owned by middle-market consumers. The affluent (household income of $100,000 or more) own just 27 percent of existing permanent life insurance policies while 73 percent of the existing permanent policies are helping average Americans. Those earning $25,000 to $99,000 comprise 55 percent of the population, but own almost 60 percent of existing permanent policies.
If you look at new sales by policy count, consumers earning under $100,000 represent 72 percent of newly purchased permanent life insurance policies. So by this measure, it is truly middle America who are buying permanent and benefiting from it.
Recent LIMRA research found that 30 percent of U.S. households do not own any form of life insurance—a 50-year low. We also know that 75 percent of households have less than a month’s savings. What will these families do if their primary wage-earner died unexpectedly?
This is not the time to make buying life insurance less attractive. Collectively, we should be finding more ways to encourage consumers to get the coverage they need.
Finally, as researchers we know that it is critical to look at all the data before making conclusions. We encourage others to do the same.
Robert A Kerzner,
President and CEO of LIMRA, LOMA and LL Global
Windsor, Connecticut
As a life long Texas resident, an Award Winning Insurance Agent, and Best-Selling Author, I have been in the insurance industry since 1994 starting out as an Auto Claims Adjuster and then an Auto Claims Office Manager. Anyone call sell you insurance, but it's when you need to use it that you count on an experienced insurance professional to guide you. We offer affordable, low cost coverage to meet your budget. We are different because We Think Outside The Box!
Click on Book to order your copy NOW!
Best-Selling Book Co-Authored with Brian Tracy
Subscribe To "Ask A Houston Insurance Agent"
Posts
Comments
No comments:
Post a Comment