SWOTT of Life Insurance
SWOTT is an analysis or comparison of “strengths, weaknesses, opportunities, and threats that helps executives formulate strategy”, according to Bateman & Snell (2004, p. 122). An industry must capitalize on the information gathered, accept what the data states, and then form a plan of utilization, counteraction, and alleviation (Bateman & Snell, 2004). The life insurance industry is no different in this regard than any other business. An examination of the strengths, weaknesses, opportunities, threats, and trends will be discussed from the external public’s view, commonly known as the policyholder.
Life insurance customers have two options: whole life and term. The strengths of whole life are: (1) upon death, a lump sum can be disbursed to the beneficiary or some companies offer a monthly allotment, (2) the premiums are set, (3) “cash value” will increase as the policy ages with the added benefit of a disbursement if the policy is surrendered, and (4) participation will earn dividends (Turner, 2008). Term life insurance has slightly different benefits: (1) the premiums are less, and (2) it is an ideal solution for younger adults with large debts that will be left in the event of their death (Acculife, 2008).
The disadvantages or weakness of whole life is the expense of the policy, especially initially and the premiums are higher than term as well. Term life insurance have many: (1) the obvious is payment is only made in the event of death, which most term life policy holders are a younger age, (2) the policy does not build equity, (3) premiums will increase at time of renewal, and (4) there is a risk of being “uninsurable” at the term expiration (Bell, 2008).
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