I see trouble on the horizon for life insurance agents. It’s not breaking news that they’re marketing a product that many prospects would describe as complicated and opaque. But their already challenging business is about to become all the more so because the political and economic environment in which they’re marketing is rapidly becoming more uncertain. And the more uncertain the environment, the more their prospects tend to hold onto their cash. It doesn’t mean that they won’t buy life insurance. But, more than ever, they’ll have to hear a clear and convincing case that the policy they buy will more than pay for itself today and tomorrow.
To the extent that agents are marketing through social media, they’ll have to do these things going forward to make that case. I’ll focus now on the middle market but will follow up with thoughts on the advanced market.
Identify Intended Audience
Every day, I see postings intended for the middle market that enumerate reasons to buy life insurance. The postings often link to an article that appeared in a personal finance magazine or a piece written by an insurance company or other third party. The agent just adds an introduction or some annotation, often garnered with emojis. With notable exceptions, the articles themselves are by and large targeted for a given market, well written and technically correct as far as they go. But the articles aren’t the problem. It’s the agents’ introductions or annotations, often neither well targeted, well written, technically accurate or even proofread. They distort and obfuscate the messaging to the point that the reader can’t tell who it was written for or whether they should bother reading it.
Shine a Spotlight, not a Floodlight
With this as a backdrop, the point is that agents have to sharpen the focus of their postings so that it’s clear whom they’re posting for and why those in that market segment should read them. Not surprisingly, most postings about “why to buy life insurance” can’t pass this litmus test. They’re bromides, so general as to be meaningless and not worthy of a reader, meaning a prospect’s, attention. So, if an agent posts for accumulators, speak to them directly. Tell them why buying life insurance at this stage of their lives will not only address today’s concerns about family security but also give them a tool for saving, investment and, yes, future family security that will give them far more flexibility to deal with the issues and expense associated with entering conservation. See “Life Insurance Planning for the Merely Well-to-Do.”
If they’re posting for conservators, or more likely, those on the cusp of that stage, tell them with some specificity how having life insurance in place will give them far more flexibility with the key financial decisions they’ll face in conservation than they’ll have without the security of the life insurance for their spouse. The bottom line is that the posting should enable the reader to say, “Hey, they’re talking about me! I need to read this.”
Posting for Conservators
As I’ve written before, the middle market is comprised of individuals and couples who are in one of three sequential financial lifecycle stages: accumulation of assets, conservation of those assets for the rest of their lives or distribution to the next generation. Agents presumably agree with their prospects on the definition of accumulation and when it stops and conservation begins. But they don’t agree on the definition of “conservation” and, more particularly for couples, when conservation stops and distribution begins. As expressed in their marketing, agents define conservation as ending and distribution beginning at the death of the first spouse to die, leaving planning for the surviving spouse as a part of distribution to the next generation. But “real people” don’t see it that way. For them, conservation extends for the lifetime of the surviving spouse. This is a huge disconnect that hinders effective messaging and product sales. Why? Because instead of focusing on what people care about and are willing to pay for, which is protecting one another for their lifetimes, it abruptly and arbitrarily moves providing for the survivor into distribution, which means estate planning, which unnecessarily complicates the planning process and makes it much more expensive. It also assures that conservators won’t finish reading the posting. I’ve suggested how agents can recast their message to align with how prospects think about their “financial timeline.” See “Is Your Marketing Message Missing the Mark?”
Speak Directly to Prospects About Taxes
At least under current law, cash value life insurance offers a constellation of tax advantages that one would be hard-pressed to replicate in any other form of vehicle. Those benefits include deferral of income recognition, conversion of taxable income to tax-free income through loans and withdrawals, diversification from the way other typical investment and retirement savings vehicles are taxed, flexibility to exchange policies for new policies or other insurance vehicles without triggering gain and, yes, tax-free death proceeds. See “Life Insurance as an Investment for Retirement” and “A Boomer at the Crossroads of a Vintage Policy.”
Agents often write or link articles about these advantages. However, they too often just list them without giving the reader context for their personal application. Instead of just lumping all of the advantages into one posting directed to neither type of prospect in particular, agents should speak directly to each of the respective prospects and give them both the tax and investment context for why a given set of advantages could make a real difference to them over the long term.
Addressing Product
This one will get some pushback, but I’ll mention it anyway. With the world writ large in such a state of flux, a flexible premium policy that doesn’t necessarily offer (or require the higher premium for) guarantees could be far more attractive to many prospects than one that requires or only allows a fixed premium. There’s just too much uncertainty out there to be locked Into a policy that cuts the owner no slack on the premium when that flexibility is needed nor allows the owner to seamlessly put more premium in when it’s on hand to boost the long-term cash value or enable them to cut back on premium but retain death benefit when they’re older. At the very least, write about them both! Of course, some agents’ business models or risk tolerance may not allow them to do that. They’ll only write about the fixed premium products or guarantees. In that case, a prospect who follows up with such an agent should expect to hear a wall of words about the risks of flexible premium products or lack of guarantees. On the other hand, those agents should expect well-informed prospects to consult with other agents who are not so constrained.
And We Should Call You Because…?
Time and again, I see agents’ posts that give people a multitude of reasons to buy life insurance without giving them one reason to call that agent to continue the conversation. Agents should be able to give the “You should call me because…” message in no more than three sentences. Absent that personalized messaging, the posting agents are just doing a favor for their competitors.