From a spot in the pharmacy section of a Wal-Mart Supercenter in this Atlanta suburb, the 44-year-old MetLife Inc. manager eyed a kiosk nearby that urged shoppers to "get life insurance today for only $5." That buys the first month of a policy with a death benefit of as much as $50,000.
The kiosks are part of a push by the biggest U.S. life insurer in assets to reverse a long slide in sales of life insurance to the middle class. Instead of the army of agents that used to sell policies door-to-door and over conversations at the kitchen table, MetLife is trying an experiment that includes touch-screen-equipped kiosks at 223 Wal-Mart Stores Inc.
As he watched for about 90 minutes, just two shoppers stopped to check out MetLife's insurance offer. No one took a $5 card needed to activate the new coverage with a follow-up phone call. "You don't go into something like this assuming you'll have a blockbuster," said Mr. Burton, wearing bluejeans and a determined expression. "It's a learning process."
MetLife won't disclose financial results for the Wal-Mart effort, but the New York insurer said in June that it expects to suffer about $40 million in losses this year on startup costs and other expenses tied to direct-marketing initiatives in the U.S.
Even rival insurers are hoping for the best. "As an industry…we need to change these [sales] trends," said Mark Hug, an executive vice president in Prudential Financial Inc. individual life-insurance unit. The Newark, N.J., company also is trying to sell more policies to middle-class Americans, including through websites and branches of banks across the U.S.
MetLife's premiums on policies sold to individuals last year totaled $409 million, a decline of 26% from $553 million in 2005. Industrywide sales of individual life-insurance policies are down 45% since the mid-1980s, according to industry-funded research firm Limra. About 30% of American households have no life insurance at all, up from 19% about 30 years ago.
The U.S. market is one "we think we can win in," Mr. Wheeler added. A Limra spokeswoman said recent signs show "insurers are finding new ways to connect with Americans."
For generations, many middle-class and lower-income families saw life insurance as a staple of basic financial planning. MetLife prospered with its strategy, born in the late 1800s, of hiring agents to canvass neighborhoods with "workingmen's" insurance, typically just big enough for burial expenses.
MetLife and other insurers got another big boost from "permanent life" policies, which combine a death benefit with a tax-deferred savings vehicle.
But traditional life insurance began losing popularity with the rise of mutual funds and 401(k)s in the 1980s. Financial planners urged many Americans to buy cheaper, bare-bones "term life" coverage—and pour more money into products aimed at helping them have enough money in retirement.
The lower premiums on term-life policies chased agents who rely on commissions out of the insurance business or into products aimed at wealthier Americans, including variable annuities. Permanent life policies remain popular among people in higher tax brackets because savings grow tax-deferred.
Another reason for the sales decline: MetLife, Prudential and other insurers that went public in the 1990s and early 2000s got more fixated on the bottom line. As a result, insurers shrank their ranks of in-house agents to save on recruitment, training and other costs. They farmed out sales to securities brokers and independent financial advisers, who also tend to have well-to-do clients.
Melina Ahmadpour didn't know that her mother, a hair stylist in a Las Vegas casino, had no life insurance and little savings until shortly before the mother died of cancer in 2009 at the age of 52. "No one ever talked to her about it," said Ms. Ahmadpour, now 24 years old.
Relatives pulled together about $20,000 for Ms. Ahmadpour and her older sister. Nearly half of it was spent on burial costs. To raise more money, the sisters put their mother's property up for sale on Craigslist.
"Strangers came into our apartment, bargaining to get the price down," she said. Ms. Ahmadpour has had 10 different jobs since her mother died and lost a college scholarship because her grades suffered. Ms. Ahmadpour believes she would have earned a master's degree by now if her mother had bought life insurance.
Last year, MetLife got 16% of its total operating earnings of $6.29 billion from the company's U.S. individual life-insurance business and 25% from retail annuities. In addition, about 30% of MetLife's operating income now comes from outside the U.S.
Prudential, the nation's second-largest life insurer, earns about half its operating income in other countries. During the financial crisis, Prudential and MetLife both acquired non-U.S. life-insurance operations from American International Group Inc.
Insurers have been successful at persuading companies to offer life insurance as an employee benefit. But that makes some Americans feel even less need to buy life insurance on their own, even though employer-provided coverage can be lost when a job ends and usually carries a small payout amount.
One rule of thumb among insurers, financial planners and consumer advocates is that a family's breadwinner should have enough insurance to replace five to 10 years of income. But only 4% of private-sector workers who have employer-sponsored policies are covered for more than two years of earnings, according to a Labor Department survey in 2013. More than 60% are covered for just a year's pay.
Unlike most industries, online sales of life insurance haven't taken off, largely because getting the best rates depends on the applicant's health and requires a review of medical records and a blood sample.
To overcome that hurdle, MetLife is developing a website that will connect to prescription-drug, motor-vehicle and other databases to verify and analyze information submitted by applicants for policies as large as $500,000.
MetLife also has begun selling "final expense" policies for the first time in decades. Such policies carry
payouts as small as $2,500 and are less risky to the insurer than bigger policies. Coverage can be bought with no medical questions asked.
Buyers dial a toll-free number, and MetLife's technology automatically routes calls to agents with the correct state licensing. MetLife is ramping up its use of television ads to promote the policies.
The Wal-Mart experiment began in 2012 with "insurance in a box" that was displayed on shelves. The boxes contained a prepaid card good for one year of coverage.
"It looked nice, but it was expensive to produce the box" and displays, Mr. Burton said. Another problem: Many shoppers were put off by having to decide the size of their new life-insurance policy at the store and pay a one-year premium at the checkout counter. It usually cost a couple hundred dollars.
The first kiosks were installed in 2013. After the initial $5 payment for the first month of coverage, buyers switch to a monthly premium based on gender and age. Rates are set at a "blended" level between the insurer's normal premiums for excellent and poor health and smokers and nonsmokers.
That means people with the best health can get better prices elsewhere. MetLife isn't aiming to be the cheapest seller. It wants to offer an affordable price that is easily accessible.
Mr. Burton said many consumers use the digital screens on kiosks to calculate how much insurance they can buy for $20 to $30 a month, working backward to the size of the policy.
The kiosks at Wal-Mart pitch a death benefit of as much as $50,000, but MetLife's call-center agents can sell coverage with a face value of as much as $100,000 to buyers who want bigger policies.
One afternoon in May, Gene Richards, 51, checked out a MetLife kiosk while waiting in a pharmacy line at a Wal-Mart in Greenville, S.C. He wanted the rates for a 65-year-old, since he hopes to retire at that age from his job as a machinist at a packaging manufacturer.
"Too dad-gum high," Mr. Richards said of the $66.75-a-month cost for a $20,000 life-insurance policy. "Maybe I'd do better putting money in the bank to pay for my funeral."
When buyers call a toll-free number at MetLife to activate the policy, employees ask about a dozen specific medical issues. Buyers with heart conditions and certain other illnesses could be offered smaller policies with two-year restrictions on payouts, according to MetLife.
Skeptics question whether the direct-sales approach can ever match the effectiveness of real-life insurance agents. "People still have to be moved from the intellectual 'I need to do this' to the actual doing it," said David Woods, 77, an agent since 1966 with Massachusetts Mutual Life Insurance Co.
MassMutual, a policyholder-owned insurer based in Springfield, Mass., remains committed to hiring and training a large sales force.
For now, MetLife's pilot project with Wal-Mart is limited to Georgia and South Carolina, which rank in the bottom half among U.S. states in median household income. Mr. Burton said the results there are "intriguing" enough that MetLife will expand to a couple of other states soon.
"I have to figure out something," said Bob Hester, a forklift driver who looked at a MetLife kiosk while shopping one evening in Commerce, Ga. He decided not to buy a life-insurance policy on the spot because "it seems like $5 here and $15 there. It adds up."
Yet other facts of life nagged at him. Mr. Hester has three school-aged children and almost no savings. He ought to buy a policy, he said, but "it's just taking time to do it."
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