Marketers take cue from other industries

Article Abstract:

Insurance marketers are borrowing techniques from other industries to expand their business into markets with lower incomes. The marketing focus of life insurance products is shifting from a narrow targeting of upper-income clients to a more broad approach, but new methods are needed to sell to people who can only spend $350 per year compared to $4,000 for the high-income market. Insurers have used vertical marketing techniques developed by the food service industry to improve efficiency, and have used database marketing to make buying their products through banks easier.

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Term warfare: divide and conquer

Article Abstract:

Life insurance companies continue the price war in the term life insurance market. Many insurers are subdividing their preferred class of insureds into premium categories. Insurers then offer their best rates to these groups of very healthy consumers. As a result, insurance companies are scrambling to refine their underwriting standards and premium rates to attract very healthy consumers. Agents need to be cautious when quoting term life rates, as not all insureds will qualify for the best rates.

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Preferred risk plans grow in popularity

Article Abstract:

Preferred-risk programs are becoming more popular among life insurers in the 1990s. A preferred-risk program generally results from the splitting of a nonsmoker class into two classes, standard nonsmoker and preferred nonsmoker. Preferred nonsmokers will receive lower rates, but standard nonsmokers' rates will be raised. Therefore, insurers hoping to gain the business of preferred nonsmokers risk losing the business of some standard nonsmokers.

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