Enemy mine: don't blame regulators; the misuse of sales gimmicks is the life industry's enemy. (Selling Insight: Life/Health).

The faces may change over the years, but when life insurance pea pie get together, the buzz is always the same: "Why do the regulators have it in for life insurance?"

If not the regulators, substitute "Congress" or "consumer activists," and the paranoia boils over. Clearly, the bad guys are out to get the good guys--that's us, of course. At least that's how we like to see it.

In truth, this may be revisionist history. The facts tell a different story. A few examples may help clarify the issue that perhaps regulators, Congress and consumer activists have had good reasons to question some industry practices, including using gimmicks for selling products.

More than a decade ago, the insurance industry was busy promoting minimum-deposit life policies. Huge amounts of permanent life insurance were sold on the basis that the purchaser could borrow the premiums and deduct the interest, if certain requirements were met. In effect, this made a whole life policy cheaper than term coverage. Unfortunately, a few agents saw an opportunity to sell the product to many who could not benefit from the deduction.

The insurance industry was surprised when the IRS determined that the interest on the loan wasn't deductible. The gimmick was gone.

Should the Feds be blamed for closing this loophole? No, the actions of a few over-zealous life people did it.

More recently, the corporate-owned life insurance and bank-owned life insurance brouhaha has us buzzing. After all the corporate shenanigans of the past three years, the headlines now tell us that companies are collecting death benefits of life insurance policies they had purchased on employees who didn't know the coverage existed or who had moved on to other jobs.

What could be more damaging than corporations creating the impression that they were lining their pockets with millions of dollars of cash from life insurance policies on employees, while the deceased employee's family got nothing? Whatever the facts, it looks like corporations were funding themselves on the coffins of their employees.

Did corporate America dream up this scheme? Are the consumer activists the culprits for exposing this abuse? And abuse is the right word, since it was the perceived secretive way this was done that caused the negative reaction. It was done legally, but not appropriately, in light of what happened at such companies as Enron, Tyco and WorldCom.

Without question, these types of nonqualified deferred compensation plans are of significant benefit to millions of American employees. To lose this financial planning technique would have tragic effects.

There's one more questionable practice: the split-dollar deal or the ownership of a policy by several parties. While the current crackdown doesn't hit 100% of these plans, a perfectly appropriate product is being tarnished.

It isn't the Feds who are to blame for the changes to the rules. Again, it was a few agents marketing split-dollar who did it by pushing the sales envelope too far.

What's next? Will it be the loss of the tax-free build up in a life policy? Will that be the next to go under pressure from Congress or the IRS? Don't be too sure that this provision is untouchable. If it is changed, it's not just the life industry that will suffer, but middle-class Americans who count on life insurance for financial security. In the interest of "creative marketing" strategies, we may be endangering the financial security of those who look to life insurance to help maintain their family's standard of living should they die too soon.

In the end, the gimmicks haven't been much help. At least, annual sales figures don't seem to reflect much success. The life/health industry posted an 18% decline in after-tax operating income for 2002, following a 30% drop in 2001, the poorest results in recent history, according to A.M. Best Co. Whatever the contributing factors, including 9/11, it's difficult to suggest that we are doing a very good job selling our products.

Yet, the problem is not what we sell, but how we attempt to sell it. The culprit isn't Congress, the regulators or even the consumer activists. While our industry has taken steps to police itself with each of these excesses, those who are charged with protecting the public respond to how we pitch and promote our products. The more we base our sales efforts on gimmicks, the more vulnerable we are to the swinging political pendulum.

Sales growth doesn't depend on such nonsense. What is it about life insurance that makes it so valuable to consumers? Why is it the product we can count on for a secure financial future? Life insurance is the only vehicle available for replacing financial resources. Life insurance is not for those who die, but for the living. That's something to get excited about, particularly when other investments are performing so poorly.

That's no gimmick. That's a fact. It's time to change the buzz.

Ronald D. Verzone, a Best's Review columnist, is president of United Underwriters Inc. of Exeter; N.H. He can be reached at [e-mail].