A recent survey from ICR Custom Market Research, of more than 500 adults aged 66 and older showed that the majority of life insurance owners allow their policy to lapse.
Generally, lapse rates in policies tend to go up during harder economic times, as consumers are forced to cut payments across the board. In addition, lapse rates usually increase with age, as premiums on policies increase. However, according to the recent study, the phenomena of lapsing policies is even more prevalent among retirees.
The results showed that 55 percent of the respondents lapsed on their policies. However, the younger individuals, those aged 66 to 74, with higher annual income and education, were more likely not to allow their policy to lapse. Furthermore, the results showed that 82 percent of the respondents were unaware that a life settlement is an alternative to allowing a policy to lapse. Experts note that policyholders need to be educated on the ins and outs of a policy, and how they can avoid lapsing.
"These numbers indicate that there is a large segment of the senior population that would benefit tremendously from a life settlement without even realizing it," said Scott Page, president and CEO of life settlement provider The Lifeline Program.
Tips on targeting new clients
While getting the word out to clients about avoiding policy lapses is critical for building any life insurance business, generating new leads could be considered equally, if not more, important.
The research firm CEG Worldwide recently released results of its 2012 survey of financial advisers, showing how to generate a strong flow of referrals.
According to the results, the top sources for professional referrals came from accountants, with 68 percent of respondents votes. From there, the top five was rounded out with estate planning attorneys (61 percent), life insurance specialists (35 percent), mortgage brokers (29 percent) and personal property and casualty agents (12 percent).
Interestingly, the survey showed that advisers who were able to obtain the most high-income clients also had the most clients.
"It may come as no surprise that the most successful advisors had the greatest number of clients and referrals, giving them the greatest likelihood of falling into the high-income ($500,000 or more per year) group," reads an article from lifehealthpro.com
