The April 2024 issue of the Insurance Journal highlighted that Co-operators, Empire Life, and Sun Life allow consumers to purchase simplified issue life insurance online by themselves.
At Empire Life, this offering has indirectly benefited advisors, explains Mike Stocks, Vice President and Chief Marketing Officer, Retail.
"More times than not, the people who go online to research and get a quote for life insurance connect with an independent financial advisor to close the sale," he observes.
Stocks says that when people research online and check prices at Empire Life, they want to learn more. "At that point, they want to talk to an advisor for advice," he adds.
Lead generation
Empire Life anticipated this. "We put a tool on our direct-to-consumer website to give them the option to connect with an advisor. It’s more of a lead generation approach for us to connect customers with advisors," he says.
Stocks reveals that about 250 independent financial advisors, active with Managing General Agencies across the country, participate in the insurer’s advisor referral program.
He explains that an advisor must already have a certain volume of premiums with the insurer to access this program, although he declined to disclose the amount. He describes the approach as a recognition program for advisors who are loyal to Empire Life. The lead generation strategy is paying off.
"We send leads to those advisors who end up, in most cases, selling a fully underwritten product," he asserts. Unlike simplified issuance, this underwriting method involves several detailed questions and often requires medical exams or bodily fluid tests.”
“We know that there's a group of consumers that don’t want to speak to an advisor, so we have that off-ramp to be able to buy our simplified issue product direct to consumer. It's a very small percentage of our sales today,” acknowledges Stocks, who did not specify the percentage.
Term only
On its direct-to-consumer site, Empire Life only offers simplified issue term insurance (Simplified 10; Simplified 20). This product allows clients aged 18 to 55 to insure themselves for up to a maximum of 1 million dollars. The Simplified 20 policy cannot be issued beyond 55 years old. The Simplified 10 policy can be issued up to 60 years old. In this case, the maximum insurance amount is set at 500,000 dollars for clients aged 56 to 60. Empire Life's simplified term insurance is not convertible, as Empire Life does not offer permanent insurance with simplified issuance. The insurer offers a guaranteed issue permanent product, called Guaranteed Life Protection, with a maximum insurance amount set at 50,000 dollars.
Selling point
According to Stocks, the fact that the renewal premiums for Empire Life’s simplified term product are not guaranteed encourages the sale of fully underwritten term products, which do guarantee them.
“The feedback that I have heard on this product is advisors would prefer to have a guaranteed renewal premium product. They don't like having it not guaranteed because it's unknown for the client what it will cost 10 years down the road or 20 years down the road depending on the product.”
On the other hand, the client might be attracted by the convenience of the simplified issue product, adds Stocks. Advisors report that some clients will agree to pay more to insure themselves immediately by answering just a few questions. He estimates that the simplified product usually costs 15 to 20 per cent more than fully underwritten term insurance. Advisors say they prefer the simplified product for clients who are non-standard risks. This allows them to avoid subjecting the client to additional underwriting requirements.
This article is a Magazine Supplement of the April issue of the Insurance Journal.
