Life Insurance Industry Must Do Better Controlling The Important Conversations.

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Can you remember a life insurance company ad campaign targeting the LPGA, The Masters, The World Cup or the X games with direct to consumer ads about the virtues of annuities, or the differences between permanent life insurance and term insurance? Each of those events reaches the demographics for our industry. What if Apple did not advertise directly to their smart phone users? What if Ford did no advertising or marketing targeted directly to SUV buyers but GM and Toyota spent hundreds of millions of dollars targeted right at those consumers?

Imagine if these companies left the sole messaging responsibility to their local, privately owned distributors? They wouldn’t. It would be disastrous in every way.

And yet, it is exactly what life insurance and annuity companies do; almost without exception. This is not about brand advertising. There is plenty of money being spent on pointless “feel good” ads while Suze Orman, Ken Fisher and Dave Ramsey have taken control of these conversations. 

Why are these companies not advertising and marketing their products to their policyholders? One explanation suggests they do not sell directly to consumers and as a result, it is not their responsibility. Insurance companies rely on a variety of distribution methods to sell to and reach their policyholders, mostly through a network of individuals and small businesses who specialize in the sale of these products. 

Distribution in the automobile industry is similar. For example, as consumers, we are unable to purchase a BMW directly from the BMW company. Nor can we buy a Cadillac directly from GM. We buy from their middleman, their dealerships. The car companies support their distributors in many ways and one way is through direct to consumer advertising and marketing. 

We have reached the point where our product manufacturers must seize this responsibility and begin to advertise, promote and market the products they manufacture. Over the past several years, there has been an obsession to “crack the code”, to find a way to create consumer demand for life insurance and annuities. Unfortunately for all stakeholders, there is no magic bullet or undiscovered code. The insurance companies can help us create demand for these products. We are the industry’s “dealerships” and we simply cannot afford to shoulder this responsibility without their help.

The time is now for the industry to use its formidable resources and take control of these conversations. The carriers must begin inspirational advertising campaigns that are singularly dedicated to influence consumers to take action. This messaging requires complex, multi-media campaigns that are costly, no doubt. I believe the ROI will be significant on many levels, especially on new sales. 

Without this change, calculated misinformation from our competitors will continue to control the conversation about our products. Consumers will lack the education based information to make informed decisions. In other words, as the whole pie continues shrinking, so too will the overall slice for each distributor. Think of the descent of permanent insurance over the past 50 years. All of the industry statistics validate these very things. 

And now we have a crisis of uninsured’s and under-insured’s. I also say we have a crisis of incorrectly insured’s. There are millions of policyholders with term insurance in their 50’s and 60’s who are worried about their options when their term expires. They didn’t convert, they can’t convert, their health has changed and their budgets may not allow them to acquire what they need. Suzy Orman, Dave Ramsey and Art Williams told them to buy term and invest the difference. Nobody did. There is plenty of pain and blame to go around but we need to do better.

It is our competitors who define our products, our services and our professional status. They spend more, they market better and their distributors have huge support from their banks, their brokerage firms, the wealth management firms and even the media. With all due respect to the few journalists who cover and do know the insurance and annuity space well, there are far too many others making incorrect and un-rebutted claims about our industry. I cringe every time I see an article about life insurance and annuities written by journalists without the credentials to critique these products. The misinformation from these writers is concerning. Asking the distribution system to be solely responsible for pushing back against these misinformation campaigns is ineffective. By definition, we are easily dismissed for lacking objectivity and impartiality. 

The time has come for insurance companies to step up and take control of the conversations concerning the core products of our industry. I hear rumblings about direct to consumer campaigns from time to time. Let’s hope those rumblings turn into a roar that roar becomes the status quo. 

I can be reached at Life Cycle Planners, Email or Facebook.

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Also published on Medium.

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Ted Bernstein

Dedicated to helping people create the ultimate retirement security and protection plan to safeguard their families and businesses. I stress guaranteed income solutions, indexed annuities and state of the art wealth preservation strategies. As the innovator of life insurance products without commissions, my recommendations are impartial, objective and always in the best interests of my clients.

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