Today’s Advisory Career

The Future Of Life Insurance

Four dynamics that will alter the trajectory of your industry

by Bill Unrue

Mr. Unrue is CEO of Ensight, a leading Life & Annuity digital sales platform.

To say that 2021 has continued to be a transformational year is an understatement. We have seen entire industries recreated, forcing the nature of product distribution to change that under different circumstances would have taken years.


There is almost no sector of our economy that hasn’t been permanently altered over the past two years.

While the repercussions of the pandemic have touched many industries, changes within the field of insurance are among the most widespread. Some of these changes were underway before 2020 and have now been accelerated, while some changes caught the industry completely by surprise.

Below are a few of the biggest observations we are seeing, based on our work with the leading national life and annuity carriers and over five hundred distributors across the country.

In our point of view, these trends will reach growth inflection points in 2022.

The Growing Focus on Retirement Tax Efficiency

Every decade, the human lifespan continues to stretch – and more and more Americans face an increased need for long-term financial planning strategies so as not to outlive their money.

This is what is now referred to as “longevity risk”. And it is becoming an increasing dynamic in long-term financial planning.

As consumers begin to re-evaluate their financial retirement plans under new light during times of medical advances and innovation, financial professionals are increasingly shifting conversations about retirement to post-tax retirement savings strategies, such as the Roth 401K and life insurance used for supplemental retirement.

About 75% of employers with a workplace 401(k) allowed employees to save money in a Roth account in 2019 — up from 69% the year prior and 46% a decade earlier, according to the most recent data from the Plan Sponsor Council of America.[1] Unfortunately, automatic enrollment, a popular feature of roughly 60% of 401(k) plans, may be limiting growth. Companies often don’t set Roth savings as the default option, meaning employees would have to proactively switch their allocation. But the growth of Roth 401K is indicative of a growing focus on post-tax or “tax-advantaged” retirement savings.

Cash value permanent life insurance is also becoming an increasingly common post-tax retirement strategy, complimenting qualified retirement plans where individuals max out the annual contribution limits. In addition to providing liquidity in the event of an unexpected death, the cash value generated in some permanent life insurance policies can also provide additional lifetime financial protection. The cash value funds can be used as a source for tax-advantaged retirement income, as well as a volatility buffer during down markets.

As more focus is placed on post-tax retirement strategies to create greater tax efficiency during a longer retirement period, using permanent life insurance as a supplemental retirement strategy is sure to receive greater interest in 2022 and the years ahead.

Should Congress make changes that put backdoor Roth IRAs out of reach starting in 2022, we are likely to see an even greater inflection in cash value life insurance growth.

The Transition to Digital Brokerage Agencies & Marketing Organizations

The broad trend in the economy today is the emergence of new types of consumer and “advisor-centric” distribution models.

Whether it is Tesla going direct through the mall (vs traditional dealership), or the ubiquity of Amazon for all consumer goods and services – the consumer experience is king. Signal Advisors is a new “Digital IMO” now on the map.

The US economy is rapidly shifting to a “platform economy”. An economy where the business model of today’s Fortune 500 leaders is based on a technology platform. Think Amazon, Tesla, Apple – the list goes on and on. This has been underway for several decades. And these are likely the market dynamics for the foreseeable future.

Silicon Valley Venture Capitalist Ben Horowitz said, “software is eating the world”. A corollary in financial product distribution could certainly be – “technology is eating distribution”.

Life and annuity distribution has traditionally been focused on relationships and traditional distribution partner platforms (i.e. people and expertise plus services). This will not change, but a new dynamic in the business model is emerging. There is an unprecedented shift happening today – the introduction of distribution technology platforms and the elevated importance of the agent or advisor experience.

The age of “hybrid” digital brokerage agencies and marketing organizations is here.

What is the “hybrid” BGA and IMO business model in this regard? My simple definition – a fusion of people and technology-based servicing, where technology is streamlining the “80%” of low-value interactions, while redirecting the focus on the “20%” of high-value activities, which require a “human touch”, whether due to customer demand, the complexity of the interactions, or the strategy behind the service model.

Yes, of course, this a simplification.

But this is the future of financial services, including Life and Annuity distribution. Just look at the growth of Vanguard™, which focused its business model on an intuitive digital user experience; making it easy for clients to take action; and integrating the online experience with other channels. Vanguard re-envisioned what types of transactions are more appropriately ‘self-serviced’, relative to those which require a financial professional’s touch.

What does the new hybrid digital brokerage or marketing organization look like?

Cash value permanent life insurance is also becoming an increasingly common post-tax retirement strategy, complimenting qualified retirement plans where individuals max out the annual contribution limits...

Digital BGAs and IMOs straddle several hybrid dimensions –

  • Digitally teaching “how to sell”, while focusing the back-office on complex cases
  • Servicing producers via people (relationship) & via an advisor-centric platform
  • Providing both a B2B model experience & “D2C” sales enablement for producers
  • Ramping up self-service education resources online, while offering “virtual live” training
  • Supporting traditional policy analytics, while shifting to more “visual” and intuitive storytelling sales approach

No doubt this is a limited list.

But today’s pace of change is only quickening. And every BGA should be preparing for tomorrow’s digital reality. Over the past two years, we have seen new digital BGA and IMO entrants, such as Signal Advisors and others.

We believe 2022 will mark an inflection point in the growth of new digital entrants, but also the transition of current BGAs and IMOs towards the new model.

The Sales & Service Shift to a Virtual Engagement Model

Millennials now age-up to 40 years old. As they surge into the ranks of wholesalers, financial advisors and insurance agents, millennials are demanding that insurance carriers, FMOs and IMOs “up their game”. They are not only the first truly digital generation but also the first “app-centric” generation.

Millennials are using Robinhood, Acorns, Betterment, and other fintech apps daily and are naturally conditioned to expect a similar digital experience in the workplace, including an advanced digital sales toolset for life, LTC and annuities.

A consistent refrain that we hear is: “I am tired of trying to explain life and annuity products using PowerPoints and PDF brochures. Every other financial services experience is application-based. Even my 401K experience is interactive now.”

In other words, millennial wholesalers and financial professionals demand a more visual, interactive, and intuitive way to sell life and annuity products that matches their every-day fintech experiences.

Indeed financial advisors today have already completed the shift to digital financial planning platforms.

Whether it is EnvestNet Money Guide Pro (MGP), eMoney, RightCapital, AssetMap, or RetireUp, the financial planning experience today is managed through the medium of a fintech platform. These platforms have simplified the discussion and engagement between the financial advisor and the client, making it easier to understand financial options and their impact/benefits for the overall financial plan.

This is the expectation – digital, visual, interactive, and easy to understand.

If life and annuity carriers and distributors want to return to growth – and increase sales within advisory and agent channels – they will have to “speak the language” of the market; selling and servicing products through modern digital delivery.

The transformation of the traditional wholesaling model for carriers and distributors is now underway. Wholesaler demand for digital sales enablement and marketing tools is growing by the day.

What digital sales enablement capabilities are wholesalers crying out for in 2022?

In our experience, this has been concentrated around three critical areas:

  • Digital, interactive product analysis tools that support virtual sales engagements
  • Modern platform-based product training, education and marketing experiences
  • Real-time data insight – to drive proactive and targeted case and account follow-up

Which brings us to a final area of future change and innovation.

The Arms Race of “Instant Issue” Life Insurance

The broad trend in the economy today is the emergence of new types of “consumer-centric” distribution models.

The future of term life insurance in many ways is quite similar to the evolution of direct-to-consumer (D2C) car insurance distribution. Today we are bombarded by TV and online advertisements by carriers and new digital “aggregators” to purchase car insurance. The experience is quick, simple, and instant issue. Life insurance – at least for the majority of the population – is rapidly heading in the same direction.

In the next five years, we can expect to see an arms race in “instant issue” underwriting. Why do I say it will be an “arms race”?

It’s simple. We now live in an on-demand economy, where consumers want an immediate “purchase and delivery” experience. In this context, financial professionals are looking for products and service delivery that can help meet their client’s expectation. Financial professionals and agents will prioritize instant issue products in selection. Insurance carriers, in order to remain competitive, will need to continuously innovate and meet this demand – starting in term, and quickly moving into permanent life insurance.

HavenLife, Banner, Ethos and Ladder Life have already started down this route. The dynamic will only continue to spread.

Every insurance carrier should be thinking about where they need to be in the next 3-5 years. While permanent life insurance will remain an advised sale well into the future, the future of life insurance underwriting will most likely be an immediate digitally underwritten sale.

It makes sense for the consumer. It makes sense for the agent. Prepare for the arms race.




1 “More 401(k) plans are adding Roth accounts — but investors aren’t following”, CNBC, August 24, 2021 (