April 29 1.30pm Steve Worley


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April 29 1.30pm Steve Worley

  1. 1. Steve Worley(Baby Boomer)(Individual Life Agent in Group Life World)(Voluntary Permanent Life is All I Know)Stepping off the Financial CliffWhy Employees Need Permanent Life Insurance2
  2. 2. Create new thinking?Change beliefs?3Employer Provided Benefit Plans
  3. 3. • In firms with 50 or more employees, over 50% have access• In firms with 500 or more employees, 85% or more have access• In all firms where there is access, there is a 95% or more acceptance rateFull-time and part-time workers; U.S. Bureau of Labor Statistics, Economic News Release, National Compensation Survey, March 2011, Life Insurance BenefitsCivilian Private Industry State and Local Government# ofEmployeesAccess Participation Take-up Rate Access Participation Take-upRateAccess Participation Take-up Rate1-4938% 36% 95% 37% 35% 95% 63% 61% 96%50 to 9955% 54% 97% 55% 53% 97% 66% 64% 98%100 to 49970% 68% 96% 70% 67% 96% 73% 72% 98%500 or more85% 84% 98% 86% 84% 99% 85% 83% 97%Group Life - 20114
  4. 4. 5Life Insurance Needs
  5. 5. How do we normally sell our products?VerbalPersuasion6
  6. 6. Learn to use a story“The Boy Who Cried Wolf”“Goldilocks and the Three Bears”“Little Red Riding Hood”7
  7. 7. • Create a vicarious experience• How to handle problems• Examine real life issues• Common language• Universal appeal• Imagination• Teach critical thinking• Teach lessonsLearn to use a story8
  8. 8. Create new thinking?Change beliefs?Change the story!9
  9. 9. Whoo has plannedahead for their lifeinsurance needsduring retirement?10
  10. 10. Whoo will have lifeinsurance in forcewhen they die?11
  11. 11. Whoo knows what theconversion rates fortheir group term lifeinsurance will be?12
  12. 12. Whoo can afford toconvert their groupterm life insurance?13
  13. 13. Whoo can helpthe employeesplan ahead?14
  14. 14. Whoo can solvethe problem?15
  15. 15. A new story forGroup LifeInsurance16
  16. 16. 1911Equitable Life Assurance Society of New York121 employeesPantasote Leather, employer paidWhoo sold the first Group Life certificate?17
  17. 17. Whoo knows how many Group Lifecertificates there were in 2011?112 Million Certificates$8.1 Trillion in FaceAmerican Council of Life Insurers, 2012 Life Insurers Fact BookThere are 12 zeros in 1 trillion (using the "short scale")1 million = 1,000,000 = 1061 billion - 1,000,000,000 = 1091 trillion 1,000,000,000,000 = 101218
  18. 18. • Widespread adoptionGroup Life has . . . .19
  19. 19. Benefit CostEmployee Benefit Research Institute, “Finances of the Employee Benefit System” (Updated November 2010) 20
  20. 20. Group Life CostEmployee Benefit Research Institute, “Finances of the Employee Benefit System” (Updated November 2010)(As percentage of all benefit cost)21
  21. 21. • Widespread adoption• Less than 1% of all benefit expensesGroup Life has . . . .22
  22. 22. 2011917,000$19.8 BillionGroup Life Insurance Payments to Insurance BeneficiariesWhoo knows what amount was paid tobeneficiaries from the group life insurance?American Council of Life Insurers, 2012 Life Insurers Fact BookGroup Life23
  23. 23. • Widespread adoption• Less than 1% of all benefit expenses• Significant economic impact - $19.8BGroup Life has . . . .24
  24. 24. So, what’s theproblem?25
  25. 25. Group Life PricingTable I – Uniform Premiums for $1,000 of Group-Term Life Insurance Protection• Age rated• Increases as theinsured ages• Dramatic increaseafter age 50Age Per $1,000 Monthly % IncreaseUnder 25 $0.0525 to 29 $0.06 20%30 to 34 $0.08 33%35 to 39 $0.09 13%40 to 44 $0.10 11%45 to 49 $0.15 50%50 to 54 $0.23 53%55 to 59 $0.43 87%60 to 64 $0.66 53%65 to 69 $1.27 92%70 and above $2.06 62%26
  26. 26. National Vital Statistics Report, Vol. 59, No. 10, December 7, 2011Group Life Pricing27
  27. 27. Aging PopulationBoomers getting older“Beginning January 1st, 2011 every single daymore than 10,000 Baby Boomers will reach the ageof 65. That is going to keep happening every singleday for the next 19 years.” (The Boomer Stats,www.BBHQ.com)Headed for retirement“In 1950, each retirees Social Security benefitwas paid for by 16 U.S. workers. In 2010, eachretirees Social Security benefit is paid for byapproximately 3.3 U.S. workers. By 2025, it isprojected that there will be approximately two U. S.workers for each retiree.” (The Boomer Stats,www.BBHQ.com)28
  28. 28. “For slightly more than half of all full-time employees inmedium and large private establishments who have employer-provided life insurance while working, such coverage ceases atretirement.”(Monthly Labor Review, “Life Insurance Benefits for Retired Workers,” 1990)29
  29. 29. “I didn’tknow!”SPD(Sorry, People Die)Section 1.In the event that you live past retirement, things willchange. You can’t keep the coverage you have becauseit gets too expensive. But that’s OK because youprobably won’t need life insurance after you retire.Section 2.If you do, you can convert your group term to anindividual policy without having to prove that you areinsurable as long as you can afford to pay the premiums.Or, you can continue your group term by buying someportable coverage which is reasonably priced, butincreases in cost as you age.Section 3.In simple terms, you should have planned better. Don’tblame the plan for your failures.30
  30. 30. Losing coverage options myths“Things I’ve Heard,” S. Worley1. “They are purchasing individual policiesthrough their agent.”31
  31. 31. “They’re buying their own coverage.”LIMRA, “Household Trends in U. S. Life Insurance Ownership,” 2010• “Life insurance ownership in the U. S. has hit a 50-year low. Three in 10 households carry no lifeinsurance on anyone in the household, and half of U.S. households now believe they are underinsured.”• “Ownership of individual life insurance declinedamong all markets—low-, middle-, and high-incomehouseholds.”• “Despite high unemployment, the study reveals acontinuing increase in the proportion of insuredhouseholds having only group term lifeinsurance—37 percent in 2010, up from 32 percentin 2004 and 29 percent in 1998. This is primarily dueto households with group coverage not buyingindividual life insurance.”Do you haveenough lifeinsurancecoverage?32
  32. 32. Losing coverage options myths“Things I’ve Heard,” S. Worley1. “They are purchasing individual policiesthrough their agent.”2. “They don’t need life insurance after theyretire.”33
  33. 33.  Percent of US workers with savings of less than$1,000:30% Percent of people who believe they will haveadequate retirement savings at 65:14% Percent who retire with less than $25,000 insavings and investments:60% Percent of private sector employees age 25-64who have no retirement plan in their current job:58%“They don’t need life insurance.”17 Frightening Facts About Retirement Savings in America, 2012They are NOTplanning ahead!34
  34. 34. Increase in senior households with credit card and installment debt:1998: 4.2% / 2001: 18.4% and risingAverage age of a US home buyer:45 years oldLength of time in a house:6.2 yearsAge at mortgage maturity:74(not counting re-financing)National Association of Realtors, 2011Financial Services Review, 2005, MasterFiles, 2002“They don’t need life insurance.”They are NOTplanning ahead!35
  35. 35. aarp.com• Medical or funeral bills• Mortgage loans or otherdebts you may leavebehind• Everyday living expenses“They don’t need life insurance.”36
  36. 36. LIMRA, LIC/LIMRA Final Expense Insurance Survey 2009Final Expense• Of 18 companies…newpremium increased by 72%from $63M in 2006 to$108M in 2009• Companies providinginformation increased from25 to 32, new premiumand in-force more thantripled from $290M to$885M“They don’t need life insurance.”2,500,000 in 0.15 seconds37
  37. 37. Losing coverage options myths“Things I’ve Heard,” S. Worley1. “They are purchasing individual policiesthrough their agent.”2. “They don’t need life insurance after theyretire.”3. “They can convert to an individual policy if theyreally need coverage.”38
  38. 38. “They can convert to an individual policy.”• Large school district in Texas• Conversion premiums for non-participating whole life policy• Guaranteed issueThey CAN’Tafford groupconversion!39AgeMonthlypremiumper$1,000$100,00060 $4.30 $430.0065 $5.55 $555.0070 $7.23 $723.00
  39. 39. “Things I’ve Heard,” S. Worley1. “They are purchasing individual policiesthrough their agent.”2. “They don’t need life insurance after theyretire.”3. “They can convert to an individual policy if theyreally need coverage.”Losing coverage options Myths40X
  40. 40. Whoo believes there is a problem?• Elephant keepers in India have an interestingway of keeping their elephants from runningaway. They tie them to a wooden peg with arope.• It doesn’t make sense on the surface, since arope like that has no hope of holding a grownelephant. But ask any elephant keeper and hewill chuckle and explain:• When a baby elephant is born, the herder ties itto a peg with a rope. At this point, the rope isstrong enough to hold the elephant.• The baby elephant quickly learns that trying toescape the rope is futile. And he keeps thatlearning with him, even as he grows up and therope becomes far too weak to hold him.• And like that rope, we often form beliefs thatmight be useful at first, but then hold us back inlife, long after the original reasons are gone.Did someone tie a rope to your leg?41
  41. 41. Do most people need life insurancewhen they die?• 50% of U.S. households have unmet life insurance needs• 58 million say they do not have enough life insurance• 29 million household heads think they will purchase lifeinsurance…in the next 12 monthsLIMRA – “Household Trends in U.S. Life Insurance Ownership” 2010Whoo believes there is a problem?42
  42. 42. What is the best way to provideemployees access to competitivepermanent life insurance products?• 51% of working Americans obtain most of their financial andretirement products where they work• Nearly 70% of employees say non-health benefits are astrong influence on their workplace loyalty—which is up from51% in 20089th Annual MetLife Study of Employee Benefit Trends, 2011Whoo believes there is a problem?43
  43. 43. If you provide access topermanent life insurance,what will happen?Whoo believes there is a problem?Employees willtake advantageof theopportunity!44
  44. 44. When verbal persuasion doesn’t work?How do you change strongly held beliefs?45
  45. 45. 1. Use fact-based value statements in theintroduction to the product• Experience the benefit of having yourproduct without actually owning it2. Use real-life, personal (yours) stories• Tell the whole story• Including credible and vivid solutions (theyhave to recognize what they need to do to bethe hero)• Solution needs to provide hopeVicarious Experience46
  46. 46. 3. Give them an opportunity to create their ownpersonal experiencePersonal Experience47
  47. 47. To Change Beliefs1. Review optional permanent life plans that are available inthe market2. Read an SPD for one of your group life plans3. Meet with one of your best employers to review thecompany’s group life SPD; review conversion cost orportable coverage costs4. Then meet with a 55+ year-old employee, making less than$50,000 annually, who has 10 or more years of tenure,explain the SPD, conversion options and cost to convert5. Review your findings with the employer6. Ask the employer to take action48
  48. 48. To Change BeliefsChange the Story49
  49. 49. Thank you!For more information, please stop by booth 702 to discuss. 50