A general shift toward whole life insurance sales could spell new opportunities for advisors. As clients both young and old become more risk-averse, they are seeking the security, simplicity and guarantees offered by whole life insurance, according sales statistics and insurance advisors.

Canadian whole life sales were up 10% in 2009 over 2008, according to LIMRA International. That surge continued into this year, when whole life sales saw a 25% increase in the first quarter of 2010 over the first quarter of 2009.

> Talk to clients whose term insurance is coming due

“There has been a change in thinking and mindset,” says Lawrence Geller, president of L.I. Geller Insurance Agencies Ltd. of Campbellville, Ont. “More and more individuals who have 10-year term insurance are recognizing that they will need insurance for a long time. They are not on track with their plans.”

Consequently, Geller says, when these clients’ term insurance comes up for renewal, typically at a much higher premium, they end up choosing whole life, he says.

>Target young professionals

Aging boomers are fuelling the growth of whole life sales, according to John McVittie, president of APK Wealth Retention Inc. in Toronto. But they are not the only group driving the trend.

“Younger professionals, generally in their mid-30s, are buying whole life as an asset class with guaranteed benefits and a strong cash flow,” McVittie says.

These are relatively affluent clients, who can afford the cost of whole life insurance in which they pay premiums for a limited period, five or 10 years, in order to be are covered for life. At the same time, cash value builds up in these policies, which can be used for a variety of financial planning purposes, particularly estate planning.

McVittie adds that many clients prefer to keep their investment accounts separate from their insurance policies and, as a result, are moving away from hybrid products such as universal life policies, which combine insurance and investing. “They are realizing that insurance is insurance,” he says.

> Offer whole life to risk-averse clients

“The increase in demand for whole life has a lot to do with market values,” says Susan St. Amand, president of Ottawa-based Sirius Financial Services. Most universal life policies have an investment component that includes equities — which were affected by the downturn in the stock market in 2008 and 2009. This in turn has caused risk-averse individuals with universal life policies to revisit their insurance options.

IE