Life insurers hit $2.6b in new sales

New business premiums are 34% ahead in the first half of 2010. There are several possible reason for this scorching rate of growth.

• People are using life insurance to provide their families with more than just money for final expenses and limited replacement income if something should happen to them. They may be interested in providing enough money to fund a life annuity to support their spouses, as well as enough money to provide for their children until they can support themselves. If they want to provide university money for their children, additional insurance may also be needed.
• Dual-in-income families often depend on both incomes for necessities, and must protect themselves against potential loss of this income if one spouse should die. This means both spouses need to purchase insurance.

More people are buying increasingly larger policies to maintain a standard of living for their families rather than just provide for necessities. Part of this may be because consumer goods and services that were previously considered luxuries are now considered necessities (air-conditioning, personal computers, higher education, etc.) Also purchases of larger policies will likely be part of formal financial planning as people suddenly realize how much insurance they actually need to protect their families against the possibility of their untimely death.

Financial planning itself will become more commonplace and will no longer be a planning tool only for the affluent.