Insurers See Inquiries Rise, Still Wait for Boost in Sales

The loss of thousands of lives in terrorist attacks Sept. 11 has prompted a flurry of consumer interest in life insurance, but it’s unclear whether these inquiries will translate into greater sales, life insurance experts said.

Insurers had been struggling in the months before the attacks, with life insurance sales down 11% from a year earlier because of changes in tax law and state regulations, as well as the tumbling stock market.

Quotesmith.com, an Internet service that provides quotes on life insurance polices, said consumer inquiries had been declining all year and dropped off significantly in the days after the attack. But last week, the number of quotes requested rebounded to 24,000 a week--levels not seen since June, said Willard Hemsworth, senior vice president for the company.

“The week after the [World Trade Center] towers went down, everyone was walking around in a state of shock,” Hemsworth said. “But now we’re seeing some high levels of interest.”

Typically, about 1% of the quotes requested result in policies being purchased, Hemsworth said. Since life insurance purchases typically take two to three months to complete, insurers won’t know until the end of the year whether the attacks actually boosted sales.

Several insurers said their agents fielded more calls in the last three weeks, although many were from existing customers asking about the limits of their coverage.

For example, many callers to Allstate agents were checking to make sure their homeowners, business and life insurance policies included coverage for terrorist attacks, said company spokeswoman Emily Daly.

Joe Davidheiser, a State Farm agent in Thousand Oaks, said he hasn’t noticed any increase in life insurance inquiries. But he said the Sept. 11 attacks seem to have made it easier to close sales with clients who already were contemplating buying a policy.

“The attitude now is, ‘Just do it.’ Before, I was hitting apathy and procrastination,” Davidheiser said. “Their mortality has been pointed out” by the terrorist attacks, he said.

Rising concerns about mortality have shown up in at least one other area: do-it-yourself estate planning.

Online sales of Quicken Lawyer 2002, a program released in August that includes a do-it-yourself will kit, tripled in the week after the attack, said Ralph Warner, chairman and founder of Nolo, the Berkeley-based publisher that produces the software with San Diego-based Intuit Inc.

“It’s almost all we were selling,” Warner said. “I think the whole country is feeling fragile, and this is something tangible you can do.”

The trend doesn’t seem to have spread to the professionals, however. Several attorneys in Southern California say they have noticed no increase in estate planning inquiries.

For life insurance companies, a rise in sales would be a sharp contrast to the trend earlier this year.

A volatile stock market has cooled interest in once-popular variable life and variable universal life policies that combine life insurance with an investment option, said Elaine Tumicki, researcher for LIMRA International, a life insurance research group. The number of variable policies sold so far this year is down 25% from a year ago.

Sales of so-called “survivorship” policies--coverage designed to pay estate taxes--also have declined, thanks to the estate tax repeal bill that President Bush signed into law this year, Tumicki said.

Sales of term insurance, which provides pure life insurance with no investment component, are down 20%, Tumicki said.

Term policies were a hot seller in late 1999 and early 2000 as agents warned that new state regulations, known as Triple X, would increase their cost. The regulations failed to have much effect on costs, however, and premiums for term life insurance are now at record lows, Hemsworth said.

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Times staff writer Michael Landsberg contributed to this report.