Walmart's clout attracted the insurerShane Winn, a MetLife spokesperson, said the joint venture with Walmart will provide the largest U.S. life insurer in the U.S. with access to the retailer's broad consumer base. "With 84 percent of Americans having shopped there in the past year, Walmart provides the type of reach and scale that MetLife seeks, so we can bring this product to the widest possible audience," said Winn. Winn described the partnership as "a pilot program" with no immediate plans to offer policies beyond South Carolina and Georgia. But if sales are good in those states, he noted, it would make good business sense for MetLife to consider marketing to other regions. The policies vary according to age and how much coverage you want. People aged 60 to 65 pay $429 a year for $25,000 worth of coverage, while those 18 to 44 can get a one-year, $10,000 policy for $69. So how does the process work? Walmart shoppers buy cards equal to the policy's cost. From there, they'd call MetLife, which would ask questions about their health and, if approved, activate the policy. Those who don't qualify can get a refund at Walmart, Winn says. (See: " Life insurance basics.")
New life insurance trend: cutting out the middle-manMetLife has made it clear since its earnings report in May that it wants to cut expenses by $600 million by 2016. One of the ways to do this is to focus more on direct sales -- like selling insurance on the web or at Walmart. Direct sales of life insurance could climb to 13 percent of the nationwide life insurance market in 2016, up from the 8 percent in 2010, according to a company presentation following the report.
But Winn stressed that the Walmart partnership is not about cost cutting; it's more about finding an untapped revenue stream in a new market.Sarah Spencer, a Walmart spokesperson, told Bloomberg news that this is the first time the retailer has sold insurance. She added that Walmart is trying to expand its financial services offerings and that it's too early to judge customers' response to MetLife's products.