A niche market big enough to fuel your life insurance business

A report generates some ideas on how to reach an important market segment.

By Lloyd Lofton

One question I hear all the time is about leads. Qualified leads. Good lead companies. Leads that work.

Whew! It’s exhausting!

So I usually respond, “Maybe you need more ‘qualified’ leads, or maybe what you need are more leads to qualify.”

It’s about your marketing plan and your activity plan — those are the things that will drive your business.

LIMRA recently released a report about what’s fueling the purchase of life insurance in a niche market. Lo and behold, right inside of this insightful report we see an outline of a marketing plan.

Let me show you how I find a marketing plan in this report.

The report informs us that this niche market has a higher level of financial concern than the overall population, and that financial concern has been exacerbated by COVID-19. Does this mean a marketing message that addresses how this financial concern can be tackled would resonate with this niche market?

What if our marketing message told a story of how consumers in this niche market can ensure their family could pay their monthly bills or their mortgage while preventing their loved ones left behind from facing a difficult situation due to a premature death?

OK, I know. Duh … that’s what life insurance does.

But this is a primary concern for 44% of this niche market, the report states.

Here’s the thing: The report tells me this niche market is more likely than the general population to own individual life insurance. So would the right message, targeted to this niche market with a strong call to action, generate activity? And didn’t we mention we need activity?

Nearly six in 10 members of this niche market (58%) own individual coverage. Compare that percentage with the 52% of the general population that owns individual life insurance, and it seems like a big market.

Another insight I found in this report is 25% of this market segment owns group life insurance, a 5% increase from 2020. We all know what happens to group life insurance when you leave your workplace or you retire. So there’s a marketing message that can be targeted to this specific niche. What do you think?

One in four Black Americans — that’s 10 million people — self-identified as needing life insurance.

Why do they buy?

People buy on emotion and are moved to action by logic; even people who say they buy logically buy that way because of how it makes them feel.

So why do members of this niche market buy life insurance?

An interesting insight I found from this report is that this niche market has the perception that life insurance is only for final expenses, a perception the report points out could result in their family not having enough coverage for income replacement. This perception also could make them lose the opportunity to use life insurance to transfer wealth to their loved ones. Are you seeing a powerful call to action with this insight?

You have the opportunity to help dispel this perception and protect their families.

I’m seeing a marketing plan start to come together. What about you?

As I start putting my message together, I find in this report that members of this niche market also see life insurance as a solution for things such as: » Supplementing retirement income. » Paying off their mortgage. » Replacing lost income.

Now, to me, I see three different marketing messages I can use in three different email marketing pieces, three different Facebook ads, or three different talking points to open a conversation.

Here’s what I advise agents and advisors who ask me about leads: Decide what problem you solve, who has this problem, where they congregate, and where they get their information from. Then create your marketing message.

Next, look for a growing market, one whose members recognize they have a problem, are willing to spend the money to solve this problem, and see you as someone who can help them solve these problems.

Black American life insurance product ownership

A growing market

Now as I look at this report, I find some of these elements: This niche market is 44 million strong, 13% of the population. And they grew more than 20% in the past 20 years. Wow!

Their median age is 38, with 30% of them below 20. That indicates a growing market to me. Their median annual income is $45,870, with nearly one in five earning $100,000 or more a year. Maybe they can afford your solutions?

Finally, 43% of those in this niche market say they have used a professional financial advisor, with 30% telling you they are currently seeking a financial advisor, according to the report. This is six percentage points higher than the general population. There’s a lesson in that data for you!

So what is the marketing message you should start with to reach this niche market?

According to this report, of the 44% of Black Americans who are uninsured, onethird believe they need life insurance.

That’s right, this niche market is the Black American market.

And this report tells us that, uninsured or underinsured, one in four Black Americans — that’s 10 million people — self-identified as a market who say they need life insurance.

Yes, they overestimate the cost of life insurance, believing it’s too expensive. This reinforces exactly why you need an ongoing, engaging marketing message that starts with curiosity, a powerful call to action, and an easy way to do business with you.

The most important message I gleaned from this report is that 55% of Black Americans would face financial hardship within six months following the death of a primary wage earner.

That’s why they need you.

Lloyd Lofton is the founder of Power Behind the Sales. He is the author of The Saleshero’s Guide To Handling Objections, voted one of the 11 Best New Presentation Books To Read in 2020 by BookAuthority. Lloyd may be contacted at lloyd.lofton@innfeedback. com.

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2.98%

LIMRA: Annuity sales pop to $77.5B in second quarter

1.82%

1.69%

Oct 2019 • 3 year avg FRD rate • 3 year avg CD rate

0.64%

Jun 2022

Swirling economic headwinds did not hurt annuity sales in the second quarter, LIMRA reported. In fact, the turmoil might have helped.

Total U.S. annuity sales increased 22% to $77.5 billion in the second quarter, according to LIMRA’s U.S. Individual Annuity Sales Survey.

It marked the highest quarterly sales ever recorded since LIMRA began tracking annuity sales and nearly $9 billion above the previous record set in fourth quarter 2008 during the Great Recession.

Rising interest rates, continued inflationary pressures and talk of a looming recession had consumers flocking to safety.

Total fixed-rate deferred annuity sales were $28.2 billion in the second quarter, 76% higher than second quarter 2021 sales. This is the best sales quarter for fixedrate deferred annuities ever recorded. In the first six months of 2022, fixed-rate deferred annuities totaled $44.1 billion, a 44% increase compared with the same period last year.

Fixed indexed annuity sales also had a strong quarter. FIA sales were $19.7 billion in the second quarter, up 19% from prior year.

BILL WOULD MAKE IT EASIER FOR ADVISORS TO SELL RILAS

Financial advisors may find it easier to get into the business of selling registered indexlinked annuities after a congressional committee approved a proposal to lower some of the market entrance barriers.

In 2021, RILA sales were $38.7 billion, 61% higher than in 2020, and current

growth remains strong. RILAs promise growth beyond a simple fixed rate of return while providing guaranteed protection from losses in market downturns.

But while capitalizing on RILAs’ growing popularity, financial advisors have complained the requirements are complicated, burdensome and unnecessary.

Those objections led to HR4865, a bill to lower barriers to retirement income products by requiring the Securities and Exchange Commission to revise rules regarding developing and offering certain annuity products, including RILAs.

The bill creates a dedicated SEC form for RILAs that would provide clients with disclosures tailored to these products and would streamline filing requirements for issuing companies.

INSURERS RUSH NEW INDEXLINKED ANNUITY PRODUCTS TO MARKET

Insurers are ready to ride the RILA train for a little bit longer.

Also known as buffered or structured annuities, RILA products produced big sales jumps for the past several quarters. While growth has slowed some, LIMRA

reported RILA sales up 5% to $10.5 billion in the second quarter. In the first half of 2022, RILA sales were $20.1 billion, 5% higher than prior year.

At least three insurers unveiled new RILA products recently. Global Atlantic announced ForeStructured Growth, the first RILA to be issued by a company subsidiary. The LiveWell Dynamic Annuity was issued by Midland National Life — a member company of Sammons Financial Group.

QUOTABLE

Continued equity market declines and rising interest rates drove investors to purchase recordlevel fixed-rate deferred annuities in the second quarter.

— Todd Giesing, assistant vice president, LIMRA Annuity Research Finally, Great American Life expanded its fee-based product line with the launch of the Index Achiever Advisory RILA.

INTEGRITY MARKETING GROUP ACQUIRES ANNEXUS

In a deal that shook up the industry, Integrity Marketing Group acquired Annexus Group to create a potential annuity selling powerhouse.

Terms were not disclosed. As part of the transaction, Ron Shurts, co-founder and CEO of Annexus, will become a managing partner of Integrity. Previous Annexus investors, including funds managed by Blackstone, will sell their interests as part of the transaction, Integrity said in a news release.

The marriage combines Integrity, an insurance distribution company with ties to 450,000 agents and more than $20 billion in assets under management, and Annexus, a product design and distribution company with $45 billion in combined sales and partnerships with some of the biggest companies in the industry.

“This will be a game-changer for Integrity,” said Sheryl Moore, founder and CEO of Moore Market Intelligence. “This makes them an annuity heavyweight.”

DID YOU KNOW ?

The first variable annuity, the CREF Stock Account, turned 70 years old in 2022.

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Brighthouse SmartCare® is a hybrid life insurance and long-term care product. It offers a simplified underwriting process, giving your clients some power over the unexpected. And thanks to its 100% digital approach, it makes the process for you as a financial professional easier. The Brighthouse SmartCare application process makes the process simple and seamless in a number of ways: • Eliminates labs and exams for most applicants • Provides simplicity with a totally digital application process • Offers flexibility to complete requirements from the comfort and privacy of home Brighthouse SmartCare is the smart way to gain some power over the unexpected. Learn more at brighthousefinancialpro.com.

Brighthouse SmartCare® is an indexed universal life insurance policy with long-term care riders issued by, and product guarantees are solely the responsibility of, Brighthouse Life Insurance Company, Charlotte, NC 28277 (“Brighthouse Financial”). All guarantees, including any optional benefits, are subject to the claims-paying ability and financial strength of Brighthouse Financial. Each issuing insurance company is solely responsible for its own financial condition and contractual obligations. Brighthouse SmartCare has exclusions, limitations, reduction of benefits, and terms under which the policy may be continued in force or discontinued. May not be available in all states or firms. Brighthouse Financial® and its design are registered trademarks of Brighthouse Financial, Inc. and/or its affiliates. 2109 BDUL1108864 3704363.1[08/11/2023]