The surprising way the world’s largest life insurance policy was sold

The $201 million life insurance policy sold last week offers insight into a successful marketing technique most Canadian brokers aren’t using.

Headlines were made last week when it was revealed that an anonymous Silicon Valley tech company billionaire in California had taken out the largest life insurance policy ever with a death benefit of US $201 million, more than double the value of the previous record-holding policy.

Dovi Frances of SG LLC, the lucky Southern California-based financial services adviser who arranged the policy, declined to disclose his client’s identity but did say that the annual premiums for the policy will be “in the low single-digit millions.”

The life policy, now verified by Guinness World Records officials as the largest in history, was underwritten by 19 different insurance companies, each taking responsibility for less than $20 million — any more would cause the insurer to “go into bankruptcy if the insurance policy is called,” said Frances.

Perhaps even more interesting to brokers is the method Frances used to procure his deep-pocketed client: direct mail.

Direct mailing campaigns have drawn their share of skeptics in recent years, particularly among the insurance community, says Ontario broker Glenn Cooke of However, the impressive success in California may mean Canadian life insurance brokers will want to rethink their strategy. (continued.)

“I haven’t seen a single life insurance broker market through direct mail. There seems to be a sense in Canada that you’re carpet bombing, basically,” said Cooke. “I’m kind of thinking after the California incident that I should be trying it in addition to what I do in internet marketing.”

Statistics seem to be in Cooke’s favour.

A 2007 survey from Canada Post reveals that 91 per cent of Canadians read or review their mail the same day it arrives, while another 68 per cent read it as soon as it’s received. A full 84 per cent of addressed advertising pieces Canadians receive are actioned — meaning they are read, saved for later or used for purchase.

Even unaddressed direct mail pieces may be successful. The same survey suggests that 67 per cent of print pieces received in the mail without an address are actioned.

It appears that direct mail is far from dead, and given the lack of competition in the marketing channel, investing in the medium may pay off for enterprising brokers.