Pandemic Sparks a Renewed Interest in Life Insurance Careers and Coverage

Like many other industries, insurance was impacted by COVID-19’s recession-induced record unemployment. Today, as the economy begins to slowly recover, some sectors of the insurance industry continue to struggle, while others have experienced an uptick in growth.

According to research conducted by the Life Insurance Marketing Research Association (LIMRA), one market sector of the industry that has managed to come through the pandemic relatively unscathed is life insurance. In fact, at the height of the pandemic, LIMRA research showed that candidates’ interest in testing for field sales positions in 2020 increased 31%.

What comes as an even bigger surprise is that, historically, life insurance candidates are typically sourced from the financial services sector. In 2020, however, LIMRA research showed that a higher proportion of life insurance candidates came from a number of industries outside of financial services, including some of those hit the hardest by the pandemic, such as hospitality, transportation, construction, and health care.

“Typically, the largest subset of new field sales candidates are drawn from financial services,” said Margaret McManus, Ph.D., assistant vice president, research and predictive analytics, Talent Solutions, LIMRA and LOMA. “In comparison to other industries, the life insurance market remains relatively stable. This may have attracted many people looking to find a new career.”

But a career in life insurance isn’t for everybody. To be successful requires not only an in-depth understanding of what life insurance is, but also a comprehension of the ins and outs of individual products and how to properly assess the specific needs of customers. Due to these factors and because so many initial applicants in 2020 came from more-nontraditional industries, there has been an 18% drop in the number of candidates at the end of last year, compared with 2019’s non-pandemic year. LIMRA research shows that out of these nontraditional industries:

  • Thirty-three percent of applicants admitted to knowing nothing or very little about a career in life insurance, compared to just 17% of applicants with a financial services background.
  • Forty-six percent of applicants said they had very real concerns about their ability to answer questions from prospects and clients.
  • Three in 10 applicants said they were worried that prospects and clients won’t view them as a trusted adviser and, consequently, cost them sales opportunities.

“Life insurance is a multifaceted and complicated industry. Effective salespeople have to be knowledgeable about a vast array of products and how they fit into a client’s financial plan,” said McManus. “These nontraditional candidates may need more information about the industry, its culture and its practices.”

In addition to being an employment opportunity during hard times, another pandemic-related driver behind the increased interest in a life insurance career can also be attributed to more consumers being interested in buying coverage. In fact, LIMRA research shows that 32% of consumers who applied for coverage in 2020 did so because of COVID-19-related concerns. Research also showed that during the pandemic, there was a 35% increase in consumers’ choosing to purchase coverage online compared with 14% in 2019. 

Conclusion

Being a life insurance agent is a rewarding career in that it allows the ability to help prospects and clients obtain a sense of security knowing their family is financially protected in the event of the policyholder’s untimely death. Today, it’s uncertain whether the trend in the increase in candidates or sales in the life insurance field will continue during the process of recovery from COVID-19. What is certain is this: In 2021, with only 54% of Americans owning a life insurance policy, there remain vast opportunities in the life insurance sector.                  

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