by shooter » Fri Aug 16, 2024 10:58 am
You've touched on a significant trend in the insurance industry. There was indeed a time when term insurance was the go-to product for online and phone sales. However, the landscape has shifted, and final expense insurance has gained a lot of traction. Here’s why many agents are gravitating towards final expense insurance:
Higher Commissions:
One of the primary reasons agents are favoring final expense insurance is the commission structure. As you mentioned, commissions for final expense policies can be around 120% or more, compared to 90% to 100% for term insurance. This higher commission rate is a strong incentive, especially for agents who are looking to maximize their earnings.
Ease of Placement:
Final expense policies are generally easier to place than term insurance. The underwriting process is often simpler and quicker, which means agents can close deals faster and with less hassle. This ease of placement is another key reason why many agents prefer selling final expense insurance over term insurance.
Market Demand:
The demand for final expense insurance has grown significantly. Many people are looking for affordable, straightforward policies that cover end-of-life expenses without the complexities of term insurance. This growing demand has made final expense insurance a more attractive product for both agents and clients.
Term Insurance Challenges:
While term insurance still has its place, it’s facing challenges that make it less appealing for some agents. The lower commission rates and the fact that agents often don’t get paid for the policy fee on many term products are contributing factors. Additionally, the competition in the term insurance market remains fierce, which can make it harder to stand out and close deals.
Final Expense vs. Term:
When deciding between selling final expense insurance or term insurance, it comes down to your business goals. If you’re looking for higher commissions, easier placements, and a product with growing demand, final expense might be the better route. However, if you prefer working with clients who need more substantial coverage, term insurance still offers significant opportunities.
Conclusion:
The shift towards final expense insurance is driven by higher commissions, ease of placement, and strong market demand. While there may be less competition in the term insurance space now, final expense offers many benefits that are hard to ignore. It’s worth considering where your strengths lie and which market aligns better with your business objectives.
You've touched on a significant trend in the insurance industry. There was indeed a time when term insurance was the go-to product for online and phone sales. However, the landscape has shifted, and final expense insurance has gained a lot of traction. Here’s why many agents are gravitating towards final expense insurance:
Higher Commissions:
One of the primary reasons agents are favoring final expense insurance is the commission structure. As you mentioned, commissions for final expense policies can be around 120% or more, compared to 90% to 100% for term insurance. This higher commission rate is a strong incentive, especially for agents who are looking to maximize their earnings.
Ease of Placement:
Final expense policies are generally easier to place than term insurance. The underwriting process is often simpler and quicker, which means agents can close deals faster and with less hassle. This ease of placement is another key reason why many agents prefer selling final expense insurance over term insurance.
Market Demand:
The demand for final expense insurance has grown significantly. Many people are looking for affordable, straightforward policies that cover end-of-life expenses without the complexities of term insurance. This growing demand has made final expense insurance a more attractive product for both agents and clients.
Term Insurance Challenges:
While term insurance still has its place, it’s facing challenges that make it less appealing for some agents. The lower commission rates and the fact that agents often don’t get paid for the policy fee on many term products are contributing factors. Additionally, the competition in the term insurance market remains fierce, which can make it harder to stand out and close deals.
Final Expense vs. Term:
When deciding between selling final expense insurance or term insurance, it comes down to your business goals. If you’re looking for higher commissions, easier placements, and a product with growing demand, final expense might be the better route. However, if you prefer working with clients who need more substantial coverage, term insurance still offers significant opportunities.
Conclusion:
The shift towards final expense insurance is driven by higher commissions, ease of placement, and strong market demand. While there may be less competition in the term insurance space now, final expense offers many benefits that are hard to ignore. It’s worth considering where your strengths lie and which market aligns better with your business objectives.
