Terms of Enrichment

By Gordon M. Henry

Arthur Williams, 44, was once renowned in Columbus, Ga., for coaching winning football teams at Kendrick High School. Now, 15 years after his retirement from the gridiron wars, Williams is building a nationwide reputation for racking up remarkable scores in the life insurance business. Last year his Atlanta-based A.L. Williams General Agency, which sells policies that are underwritten by a firm called Massachusetts Indemnity and Life Insurance, sold $65.6 billion worth of coverage, an increase of 71% over 1984. With that performance, the ex-coach enabled Massachusetts Indemnity to replace Prudential, which sold $46.4 billion of new coverage, as the world's largest life insurance vendor.

Williams' astonishing success in an $820 billion-a-year industry stems from a fervent, evangelistic selling style with a single-minded concentration on one product: inexpensive term insurance. This kind of no-frills policy makes a payout only when the insured dies. For that reason, term-insurance premiums may be only 20% of what customers pay for the more common whole-life and universal-life policies, which still make up about 89% of the U.S. market. These more expensive forms of coverage offer policyholders a so-called cash value that increases over the years and can be pulled out at any time. Whole- life and universal-life policies thus give people a way to invest for the future, but Williams argues that they should buy a cheap term policy and invest the money they save on premiums in a mutual fund.

Williams hammers home the gospel of term insurance through a door-to-door sales force of 140,000 spread across 49 states and Canada. The sellers are linked by a $5 million private satellite TV network, over which the stocky, balding Williams delivers daily pep talks. Nearly all of the employees are part-timers, and many hold other jobs, as teachers, firemen and even mayors. He claims that by using part-time agents his company spends 75% less than competitors on everything from desks and chairs to phones and plants.

The Atlanta supersalesman became a believer in term insurance because of a bitter personal experience. During his junior year at Mississippi State College, his father died of a heart attack at 48. Two small whole-life policies left his mother barely enough to get by on, and Williams had to struggle to support her. For the same premiums, he later discovered, the family could have had more coverage by buying term insurance. After learning the business in three years of selling term door to door for the ITT Financial Services Group, Williams started his own company in 1977.

Critics charge that Williams' sales force encourages clients to transfer money from existing insurance into term policies, wasting their original investments. Harold Leff, a vice president at competitor Metropolitan Life, contends that people who buy cheap term insurance often do not use the money saved from low premiums to start investment programs.

Nonetheless, more and more people seem convinced that term insurance offers the most protection for the least money. Williams expects the amount of new coverage that he sells this year to surge by 38%, to $90 billion, and he predicts $120 billion for 1987. He boasts, "We are positioned to dominate the largest industry in America for the next 20 to 25 years." At the rate he is going, that may not be much of an exaggeration.

With reporting by B. Russell Leavitt/Atlanta and Raji Samghabadi/New York