Are you fulfilling your duties as a financial advisor?

By Steven McCarty

Imagine one of your clients wants to buy life insurance (it happens!), but you never get around to selling the product because you have bigger fish (read: products) to fry. Or, what if you knew a client had a large life insurance need, but you never raised the topic because you were just too busy? In both scenarios, did you fulfill your duty as an ethical financial advisor?

We might ask the same question of the entire life insurance industry. That’s because millions of Americans need life insurance today, but they’re not getting an opportunity to buy due to changing field force demographics. Consider these statistics:
  • According to LIMRA, the number of life agents has plummeted from about 250,000 in 1975 to less than 154,000 in a recent year. Meanwhile, the number of agent recruits has fallen to about 35,000 per year, down from 55,000 in 1975.

  • Not surprisingly, the industry is only selling about nine million life policies a year, down from 17 million in the mid-1980s. Yet over this time frame, the number of U.S. households with children increased by about 20 percent. Talk about a missed opportunity!

  • Making things worse, 50 percent of Americans say they need more life insurance, and 25 percent say they’d buy if given the opportunity. But fewer and fewer are getting that opportunity (only about 1 in 4 around the turn of the millennium).

  • And the outlook will likely remain cloudy since the distribution force is aging (the median age of an independent life producer is 56) and has largely migrated to the affluent end of the marketplace.
But there’s good news. Many insurers have launched alternative distribution models that leverage Internet efficiencies to tap the vast middle market. But more can be done, if you’re up to the challenge. Here are a couple things to try:
  • View the risk of dying too soon as a pivotal financial risk. If you’re not equipped to handle it, be sure to refer your client to someone who is.

  • Recommend life insurance sales as a potential career to the unemployed people you know. Same for the young college graduates who continue to have trouble landing their first jobs.

  • If you do a lot of life sales, considering hiring a college intern to assist you. You never know how the seeds you plant today will take root in the future.
Finally, if you’re a member of the National Association of Insurance and Financial Advisors (NAIFA), make sure they’re providing your name to the Agent Locator on This will give consumers access to one more agent who will answer life’s call.