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Technology provides flexibility and choice for a rapidly diversifying consumer market

  

Blending the power of technology with innovative and affordable products to address one of the nation’s greatest challenges. 

By Josh Millman, Head of Partnership Strategy, Haven Life

“I don’t want to think about death.”
“I have life insurance at work, so I don’t need more.”
“I’m not old enough to need life insurance.”
“I’ve heard the process is a pain in the neck.”
“Isn’t insurance really expensive?”

It seems the more life insurance technology advances, the more “dog ate my homework” reasons Americans come up with for remaining uninsured or underinsured. Reading the above, even I can understand the reluctance to engage in this difficult process. Fortunately, that’s no longer the case. 

Technology has smoothed the bumps in the road to life insurance over the last 10 years and PIMA has made great strides in making life insurance more accessible to consumers through its work. So why do 41% of Americans surveyed by the Life Insurance Marketing and Research Association (LIMRA) say they have insufficient life insurance coverage?

It may be a lack of information on behalf of consumers who do not understand the role life insurance plays in their overall financial plan. Another study by LIMRA and Life Happens showed that consumers who feel uncomfortable or uninformed about life insurance are likely to avoid the subject altogether, missing a crucial building block toward financial security and an opportunity to build generational wealth. But consumers aren’t the only accountable party. Many employers don’t offer financial wellness guidance, financial advisors may not be an option, and people are often just too busy to make a plan. That’s where insuretechs come in, easily accessible and able to educate partners, employers and the public on just how easy it is to apply for life insurance.

Yes, the insurance gap is…gaping
A 2022 Haven Life survey found that 75% of individuals believe they would be unable to sustain their standard of living if they were unable to work. This impact would, of course, apply to an individual’s loved ones should he or she pass away, which underscore how important it is to have life insurance to help mitigate the loss of income when the unimaginable happens.  

Everyone has motivation to solve America’s underinsurance issue:
●    From an employer’s perspective, life insurance information can reduce stress and financial concerns among employees for improved morale.
●    Businesses that guide customers to life insurance options may well cement their customer loyalty.
●    Americans who buy life insurance can achieve peace of mind that they’re protecting their family’s financial future and building generational wealth.

The “one size fits all” approach no longer works
A single type of solution cannot meet the needs of customers that include the Millennial, Gen X and Baby Boomer generations – all of which have unique budget priorities, financial needs and customer experience preferences. The consumer landscape is evolving and we must focus on developing and offering tools and products that give a wider range of options and solve a wider range of solutions. 

Technology enables fluidity between advisor involvement and a burgeoning do-it-yourself culture. Today’s successful insurance carriers must be flexible enough to incorporate customer expectations into their business model.

As a case in point, technology has enabled Haven Life to streamline the life insurance application process so that it is no longer invasive or something to be “endured”. Haven Life even offers a next generation instant issue, no medical underwriting capability matched with affordable pricing to help cover more consumers than ever before.

Insuretechs that meet the current standard of flexibility might want to refine their message so that they don’t come across as more “tech” than “insure” to the partners, employers and Americans they hope to reach. Education efforts can emphasize that technology has made the life insurance process as simple for a customer as entering their information, reviewing a quote, and saying “yes” to instant coverage.

Affordability belongs in the same conversation as simplicity 
We find ourselves at the crossroads of an underinsured American population with unprecedented access to efficient and affordable life insurance options. As insurance companies increasingly use technology to streamline the purchasing experience, the life insurance industry must keep pace with its outreach. Closing the insurance gap is a worthy goal and a win-win-win for consumers, carriers, and the businesses that embed life insurance into their consumer offering.

Published in the Spring 2023 issue of Insights Magazine.

PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the affinity market.

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