This research develops a plan for the marketing of term life insurance in the State of Florida. The elements of the plan are considered with respect to (1) the product, (2) the target market, (3) the market, and (4) the sales organization.
The product which is the subject of this marketing plan is term life insurance. Term insurance provides coverage for a specific period of time, or term.1 If the insured dies during the term of the policy, the life insurance company promises to pay the face value of the policy to the insured's beneficiar ies.
Term life insurance is available in a variety of formats. Two of the most common are decreasing term and level term. The face value of a decreasing term policy declines each year, while the face value of a level term policy remains unchanged over the life of the policy. The product which is the subject of this marketing plan is a level term policy.
Term life insurance policies do not generate cash or investment values. Their advantage over other forms of life insurance is a significantly lower cost. As an example, the annual premium for a $100,00 term life insurance policy
1 2(renewable) for a reasonably healthy 35 year old male non smoker approximates $115, while the annual premium for a uni versal life policy on the same individual for the same face value would approximate $4,870.2 At the end of the first year of paying premiums, the universal life policy would have a cash surrender value of approximately $4445, while there is no cash surrender value for a term life insurance policy. The net annual cost of the universal life policy in the first year is, thus, $425, compared to $115 for the term life insurance pol icy. This price advantage will be emphasized in the marketing of the term life insurance product.
Life insurance is a difficult product to sell, because most people tend to associate the product with death, as opposed to protection. A high level of per...