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The Department of Labor Changes are Coming, Are You Prepared?

Department of Labor It’s no surprise when the regulatory environment shifts. Insurance companies are nearly always adjusting to new regulations and legal interpretations of existing regulations. 2016 looks to be a little different, however, with the Department of Labor’s (DoL) redefining the fiduciary definition to include insurance product sales people, agents and advisers. With the DoL unveiling a final version of the fiduciary rule changes this week, it is not yet defined how the fiduciary definition will be applied to life and annuity products.

Several trends are likely to result. It is difficult to know how the rule changes will affect the industry long term, but there are several actions insurers should accomplish immediately to prepare. The below actions should be underway or started as soon as possible:

  1. Create a User Story Inventory – The first step is to create a user story inventory of interactions between consumers and their sales person. Whether group retirement, individual, or voluntary products, documenting the user story will help insurers understand where the impacts of the DoL changes will be greatest. The goal of the inventory is to make visible the interaction points in preparation for the DoL changes to the fiduciary rules. Documenting the interactions and work streams will facilitate a rapid response when the DoL finalizes the changes. The user story inventory should be gathered by first interviewing key stakeholders from distribution, operations, service, sales, marketing, technology, relationship management, legal and compliance. Gathering all of these touch points in documented user stories will allow you to create a matrix that categorizes each story by several dimensions including:
    • Type of interaction, such as lead acquisition, proposal, selling, enrollment, service, question/response and others.
    • Distribution channel and selling style.
    • Mutual fund or Annuity (type of product(s)) involved in each story.
    • Documentation of the information commonly gathered (and not gathered) during the interaction and where it is captured and stored.
    • Categories of interactions such as ERISA/Non-ERISA, large case exemption/non-exemption, best interest contract exemption/non-exemption, etc.
    • An overlay of the systems that support each user story.
  2. Understand How Your Agents and Brokers Sell – Categorize your sales force into various categories based on the user stories that were developed in step one. By knowing how many sales people fall into each sales story type, you will be able to much more easily identify who will be impacted by the new rules. This will be easier for insurance companies that have captive distribution, but it should be completed by all companies regardless of distribution channel.
  3. Prepare for Product Innovation – Look at your product process to see how prepared your organization is to develop new innovative products. Our experience tells us that many companies are good at creating slight variations to existing products, but have difficulty being innovative with new products. Too often insurers don’t know who is making product decisions, they don’t know their system or operational capabilities, they don’t know how to effectively test products in the marketplace, and they struggle to create products targeted to specific niches. All of these problems are fixable and insurers should immediately begin creating product development processes that will serve them for the next several years.
  4. Seek out new Partners – New innovative distribution partners will be vitally important to identify those distributors that can fuel your growth. To identify these, insurers will need to capture data about distribution partners that indicate the types of partners you value. For example, if you want to find fee-based advisers, you may create a data profile that allows you to track these to identify the best.

While it might feel too late, completing these recommended steps within a couple of months will make you much better prepared to adjust to the rule changes. Putting this off until later, will force your sales, service, and systems departments into rapid tactical solutions rather than finding the advantages through strategic solutions.

A Thanksgiving Table of Insurers

ThanksgivingIt’s that time of year again, to gather at the table, look back at the year, and say your thanks. If insurers were to gather at the same table and discuss their thanks for 2015, the conversation would be lengthy. Insurers have much to be thankful for, but at the same time, it would not be easy to keep concerns out of the conversation.

According to an estimate from LIMRA, life insurers should be giving thanks for an increase in demand for insurance, allowing premiums to rise. “This was the fourth consecutive quarter of premium growth for individual life insurance. Every major product line except variable life recorded positive growth,” noted Ashley Durham, Assistant Research Director of LIMRA Insurance Research. “In the first half of 2015, strong whole life and indexed universal life sales resulted in a 7 percent increase for overall individual life insurance premium, the highest mid-year growth since 2010.”

Even though insurance sales are rising, LIMRA’s 2015 Insurance Barometer Study found that nearly one-third (30%) of Americans believe they need more life insurance, but the majority of Americans (54%) say it’s unlikely that they will purchase life insurance within the next 12 months. Insurers may be able to give thanks for the interest in attaining more life insurance, but now they need to turn their attention to that coverage gap and consumer adverse perceptions regarding the purchase of insurance.

At this Thanksgiving table, insurers should be thanking the emerging technologies that are enabling underwriters to spend more time on activities such as decision-making and solution development. For the insurers that are early adopters, technology is allowing faster underwriting cycles and automated underwriting. Insurers are boosting customer satisfaction by delivering policies in reduced time frames, while at the same time affording their underwriters the ability to expand their capabilities.

An aging workforce as well as the shift in underwriting tasks is leading to a need for increased capabilities and enhanced skills for each underwriter. As insurers look for new talent, they will need to mitigate their knowledge loss and operational risk, while trying to find qualified candidates for a changing position.

Finally, the American markets should be breathing a sigh of relief that there were no major catastrophes leading to large numbers of claim payments this year. Every year that we can say this is a good year, for obvious reasons. While insurers look around the Thanksgiving table, counting their blessings, there also needs to be thoughts of 2016 and all the challenges and opportunities that wait for them.

Learn How to Mitigate Your Risk in the Coming Year

Download our whitepaper, The $74 Million Dollar Project Question to find out how to mitigate your project risk and have another fruitful year.

Insurers, Shed that Rotary Dial Image

Rotary phoneInsurance companies have a reputation as being one of the oldest, most conservative businesses around, and this perception is not unearned. We work with many of these companies and they tend to be large, slow-to-change organizations that aren’t focused on true innovation. If Apple is your cool, tech-savvy cousin from California, insurance companies are your “rotary dial” parents from Connecticut.

Sure, insurance companies are adopting new technologies such as cloud computing, big data, and mobile, but they aren’t doing it in innovative ways. If you want to stay in the game and not be taken out by the likes of Amazon or Google, you’ll have to develop some new ways of using these new technologies.

Take mobile for example. Yes, you can probably find an app from your insurance company that will let you make a payment and see your coverage, but can you apply for new insurance or manage your policy using an app on your phone? Can you use metrics gathered from your Fitbit or Apple Watch to influence your policy? What about the Internet of Things? Does your home insurance take advantage of that smart fire/CO2/security alarm you have installed?

At least one new insurance company, Oscar, is tracking their insured members the way Progressive tracks insured autos, and paying members when they reach daily or weekly step goals. Finally some innovation, but, not surprisingly, it’s coming from a newer, smaller insurer.

There’s another problem facing insurers. A large percentage of millennials don’t have life insurance, health insurance, homeowner’s insurance, rental insurance, or even auto insurance. You aren’t going to tap into the millennial market by pitching them in the same way that you sold to their parents. In a world where you can order 1500 live ladybugs (only $8.99 on Amazon!) and have them on your doorstep the next day, having Vlad the Impaler schedule an appointment to draw blood just so you can get a life insurance policy approved doesn’t seem all that convenient.

Their phones, their watches, even their fitness bands already know a lot about them, so insurance companies should make use of that data and develop new policies to take advantage of it. Millennials are asking, “How can it be that someone can use their phone to pilot a drone, but not to apply for life insurance?” Facebook, Twitter, and Pinterest already know plenty about them as well. Trust me, someone has mentioned developing an insurance product to Zuckerberg already. If Facebook doesn’t do it, or it isn’t included in your Amazon Prime membership next year, then Google Insurance is going to allow you to buy some using your Android watch, or Apple is going to release i-Life Insurance themselves.

This isn’t to suggest that large insurers should jump head-first into the startup arena by devising a plan to provide apps for applying for life insurance. Instead, some suggestions:

  1. Baby steps:
    Let’s face it, insurance is largely a market-share business, and this trend isn’t going to change with the release of iOS10 or the iPhone 7. However, in an age where a carrier’s website navigation ranks right up there with deductibles and premiums as key product features, surely there are likely investments in existing policyholder interfaces that could lead to increased share for carriers.
    You can start by figuring out how your customers interact with your core processes. For example, are your processes designed with your customers in mind, or are customers forced through an inflexible set of steps? If self-service is accomplished through smoke and mirrors, you’ve got some steps to take before the newest technology completely disrupts your operation.
  2. Think internally:
    Just because many traditional insurance products don’t leave much space for innovative thinking doesn’t mean that the opportunity to apply supporting technologies doesn’t exist to better measure, mature and target them. You can start implement emerging technology internally to better collect and analyze customer data.
    Put together a team to start looking at technology trends and finding ways to take advantage of those trends to improve your business.
  3. Beta test:
    Ever notice how some of Google’s most famous products stay in “Beta” for a very long time? Feel free to experiment with apps and new processes by using “Beta” deployments to your customers. Hipsters will want to be “in” by being in on the beta and you’ll be free to make some mistakes. Just don’t make really big mistakes!

Hopefully, insurance companies can start to shed that conservative, “rotary dial” image and prove themselves to be more of the cool tech-savvy cousin, and these steps will put you on the path to achieving that.

Ready to get tech-y?

Read our whitepaper on Technology Trends in Insurance to get a view of top technology trends and impediments coming down the bend in industry.

How Insurers Can Help Retirees Plan Their Asset Distribution

 

By now, you have probably heard of the changes impacting the Insurers can help retirees with their asset distribution during retirement by offering the right products and servicesretirement landscape driven by the aging Baby Boom generation. In the U.S. alone, 10,000 people each day reach age 65. This trend, which began in 2011, is expected to continue for the next 15+ years.

However, you may not have heard of another trend impacting retirees. It’s the evolution from employer sponsored defined benefit plans to a defined contribution plan (for example, a 401(k) plan). With this shift, the employee assumes the investment and longevity risk of their retirement funds. Employees have the sole responsibility for managing their assets and ensuring they are sufficient to meet expected retirement needs.

According to the Investment Company Institute, U.S. retirement assets totaled $25 trillion for the 1st quarter of 2015. Until most recently, the financial planning community has been entirely focused on the accumulation needs of individuals, while turning a blind eye to retirement income and expenditures planning. As a result, there’s a gap in products and service offerings that help retirees meet their financial planning needs, but successful business leaders see opportunities where these gaps exist.

There is a tremendous opportunity for the insurance industry to fill these gaps through products and services that provide income planning and life/health protection. The demand for these types of products is here today and will continue into the near future. Insurers who are looking to jump on this bandwagon have a few things to consider before they go full steam ahead.

The two major questions to address are:

  1. What products and services are retirees demanding?
  2. How can insurance products meet these demands?

Retirees are seeking products and services that provide income guarantees, supports their liquidity needs, complies with federal and state regulations, coordinates with Social Security, and provides life and health protection. And that’s not all. Retirees are looking for services and a tools that provide 24/7 access to their investments, allow them to run models and simulations, and provide advice on products and tax management. They are also looking for “one stop shopping”; their preference is to have a single point of contact to meet all of their needs, as well as a trusted advisor that they can meet face-to-face on occasion.

Based on these demands, insurance products such as fixed and variable immediate annuities, deferred annuities, mutual funds, long term care, and life insurance align well with retiree needs. Annuity products afford income guarantees, and liquidity can be addressed with mutual funds, and with life and health protection satisfied by life insurance and long term care products.

The insurance carrier who can package these products and services, and make it easy to purchase and understand will certainly have a leg up on the competition. Such an offering will surely be seen as a retirees’ dream come true.

Get in the game with the right products and services

You want to meet the needs of these retirees and anyone else in your market, but product development presents unique challenges. To avoid and remedy those speedbumps, watch the recording of our webinar, Overcoming the Hurdles of Product Portfolio Expansion.

The Time for Underwriting Business Rule Automation Is Now

Underwriting automationThink back seven or eight years ago to when the onslaught of mobile devices brought customer demands for digitization, speed, and online browsing choices to the doorstep, but not quite in the door. These factors are now not only well inside the door, they are sitting at the table, and customers are demanding options that serve up accessibility, choice, and near real-time satisfaction. Shoppers for life insurance in today’s digitized market-place expect no less. Insurers need to begin addressing how to meet the needs of their markets, or be left in the dust, and one of the ways that this can be achieved is through automating underwriting business process rules.

When the life insurance industry first started talking about the automation of underwriting business process rules, insurers were skeptical and slow to adopt. For years and years, it was believed underwriters had to look at every insurance application and evaluate the associated risk to create and maintain a profitable book of business. Well, that mindset is out of date because such scrutiny can be accomplished through automation. As just one example, life insurance providers can filter web applicant interview responses against online medical records to significantly reduce processing times and manual resource intervention.

Now is the time for insurance providers to embrace the changing marketplace’s mindset. While resistance to automation of underwriting and risk-associated decisions has been strong, it has been waning recently. In fact, some are now favoring automation of lower risk application determinations and associated processing so that the focus of the underwriting staff knowledge and expertise is applied where it’s most needed – on the higher tiered risk applications.

As if meeting marketplace demands wasn’t a big enough incentive, insurers stand to realize additional benefits through automation, including:

  • A streamlined, consistent and unobtrusive application and decision making process to prospective clients
  • Reliable adherence to audit and regulatory compliance through built-in checks and balances
  • Reduced overall application/contract cycle time
  • Straight-through-processing
  • Data-source provision for predictive modeling

In adopting this new mindset, some insurance providers are going whole hog by even introducing brand new shiny products, but just as many, if not more, providers are automating business rules to go with their existing product suite.

Either way, both insurance providers and clients win. Customers who demand more coverage choices and a non-invasive application process, along with equivalent or lower premiums, can be more confident that they will get what they want. Likewise, insurance providers can cut down on application processing people-hours and see an increase in processing speed and accuracy. Who would have ever thought that insurance underwriting would embrace and even exploit the digital age?

Keep Finding More On Automation

Automating underwriting business rules is necessary to be competitive in today’s marketplace. To keep reading on automating processes, download the whitepaper BPM… To Automate or Not to Automate – Is that the Question?

Not Through the Barrel of a Gun, but Change Comes to Life Insurance Underwriting

glacier-before-and-after2Mao Tse-Tung wrote, “Change must come through the barrel of a gun.” What he meant of course, was that violent revolution was needed to bring about societal change. However, one could interpret the statement to mean that people and organizations do not generally change unless there is a serious threat to the status quo. While there has been little threat to life insurance underwriting departments for the last 30 years, peril is looming. The weapon is being loaded, and chief underwriters are taking notice.

The weapon to which I refer is the confluence of several trends conspiring to take down life insurers if they don’t respond. These threats include:

  • Long underwriting cycles: Currently, full underwriting takes too long, making it difficult to court new distribution partners and increase sales.
  • Existing distribution is missing significant consumer segments: Agents are aging and agencies are failing to successfully reach millennials and other consumer blocks, which erodes sales growth.
  • Consumers have more tools than ever to manage their physical ailments but often don’t choose to: Disease management, occupational and environmental risks, diet, and exercise are all affecting non-cancer mortality. Those consumers willing and able to take preventive action can increase longevity if they make better lifestyle choices will increase longevity. Many, however, choose not to, putting strain on traditional life insurance financial models.

While these threats might seem frightening, it’s also true that these changes are producing new opportunities. Throughout the most recent Society of Actuaries Underwriting Innovations Conference, speakers talked not only about threats to traditional underwriting, but also about these growing opportunities for life underwriting departments. Substantive changes are beginning to take hold to give life insurers options for dealing with these threats. These include:

  • Electronic health records: Documents are increasingly available to underwriters in their full, actionable data summaries, and full summary forms. Electronic health records can be quickly obtained and can provide significant protective value to insurers.
  • Data surrogate exploration: Data analysis is beginning to reveal that demographic, financial, behavioral, and other traditionally non-underwriting data is providing protective value to life insurers. Early results suggest that much of the lengthy requirement gathering process may be avoided by using data that can provide information about health risks.
  • Emphasis on wellness: Wearables, self-diagnosis, gamification, mobile treatment equipment, remote health monitoring, and other strategies are giving consumers more information and control over their diseases. Higher income consumers, in particular, are monitoring their exercise, sleep, diet, blood sugar, and other health characteristics in order to improve health. This data over time will give insurers a better understanding of the patterns of a person’s health rather than simply a snapshot of it.
  • Faster data: Pharmaceutical data, credit data, and other data surrogates are giving underwriters protective value without as many expensive, time consuming, or invasive measures. Faster data is shortening time frames for fully underwritten products and it is specifically making it less risky to underwrite simplified issue products.

The bottom line is that underwriting will change dramatically over the next decade. As a part of this change, we will see a variety of underwriting styles across carriers, wider variations in non-medical limits, and diversity in product underwriting styles. It would not be surprising if we even dipped our toe into the pool of some variations of ongoing underwriting, or sending consumers offers to increase coverage, or add riders post issue without full underwriting.

Outrunning Common Insurance Process Predators

Process ConcernsThe roadrunner has the coyote, the gazelle has the cheetah, and the hare has the fox. Everything has natural adversaries they must battle and outpace to avoid destruction. The insurance industry is no exception. When it comes to insurance companies’ operations, there are a number of common arch-nemeses. New product roll-out, volume fluctuations in the new business process, and changes in state and federal regulations can all complicate processes. We put together a few tricks to help you outwit them.

One of the most challenging nemeses is the roll-out of a new product. This type of effort always has an impact on areas across the organization. Actuarial, Sales and Marketing, Audit, IT and all of the other process owners impacted by the nuances of a new product must understand the impeding changes and adjust accordingly. Strong coordination and project management are the best defense, yet it isn’t always easy. Project timelines and launch dates can be complicated and pushed out by varying state regulations. Further complications arise when considering what to do with customers in the pipeline for the old product after the new one launches. Realistic goals and timelines, timely decision-making, and consistent project communications can help insurers prepare their teams and evade new product roll-out failures.

Another enemy of process excellence in insurance lurks within the new business process. The demand for insurance, such as life or annuities, can vary over time and is often influenced by changes in the financial climate. Fluctuation in sales volume forces providers to adjust, and the sluggish speed at which they adjust can sometimes be crippling. Staffing for the peaks in volume is not cost-effective, but staffing for anything less risks sales and compromises in the customer experience. Insurers often think their products are what they sell, but in fact, it is peace of mind that generates customer loyalty and brings in new ones. Compromising the customer experience is, therefore, particularly damaging for an insurance company. To avoid being caught by your new business process, ensure that processes are as streamlined as possible, and that the people and technologies that support that process are flexible. For example, you can achieve greater flexibility in staffing arrangements by cross-training staff. This will allow you to meet fluctuations in scale and overcome this foe.

A third villain to watch out for is new state and federal regulations that threaten insurers’ processes for existing products. When new regulations come down the pike, insurers need to interpret the potential impact they will make and adjust their processes in tandem. If the processes are well documented in their current state, understanding the potential impacts of these new regulations will be much easier. However, process documentation is often out of date, leaving the company to face changing processes based on an old model. Keeping process documentation current will help you defeat this enemy and also inform you of the process controls in place, allowing you to line them up and identify additional precautions that may need implementation to ensure compliance.

New product roll-out, new business process challenges, and state and federal regulations are all natural predators of insurance processes. However, with strong project management and communication, streamlined processes, flexible technologies, and up-to-date process documentation, insurers can outrun and outwit these process foes.

Dive Even Deeper

Learn how to capitalize with Continuous Process Improvement efforts in this quick post and learn how to take the next steps.

The Perfect Storm of Knowledge Drain

How US insurers are affected by the knowledge drain caused by the “Baby Boomers” retirement

US insurers are affected by the knowledge drain caused by the “Baby Boomers” retirement

There is a “perfect storm” brewing. Today in the US, we are experiencing the greatest level of retirement-aged employees in our history.   The US “Baby Boomers” (born between 1946 and 1964) will retire at an alarming rate for the foreseeable future.

According to the US Census Bureau, beginning January 1, 2011 baby boomers are reaching the retirement age of 65 at a rate of 10,000 per day, which will continue for the next 20 years.

This phenomenon will force insurers to find creative solutions to address the loss of experienced subject matter experts.  According to the US Bureau of Labor statistics, 24% of employees in the insurance industry are age 55 or older.  However, recent studies show that many companies are not prepared to handle the loss of key resources. The results from a February, 2015 Gap Analysis Report[1] highlighted that:

Most organizations are primarily focused on assessing the impact of the aging workforce and the impact of retirements within a relatively short period of time (1-5 years) versus a more long-term recommended view.

There is a lack of urgency around preparing for impending demographic shifts.  Many either are at the early stage of examining the issue or believe that no changes are necessary. Thirteen percent reported that they are not even aware of this potential change to the makeup of the workforce.

Organizations lack formal long-term forecasting, planning and assessment related to changing workforce demographics and an aging workforce.  Most organizations do not have a process for assessing the impact of demographic changes in their workforce beyond the next one to two years.

Are you prepared for the changing demographics in your company? Answering “yes” to this question is key to the sustainable success of your organization. If you have even a shadow of a doubt, it might be time to take a second look at your internal demographic staffing models. There are a number of things that you can do today to help you prepare for these changes.
Option 1: Complete a long-term assessment of the impact of your aging workforce:

  • Identify areas of vulnerability and develop action plans to address them. For example, many employees who are ready for retirement have been working with their clients for many years and have created trusted relationships.  Your assessment should highlight these key trusted relationships and include actions on how best to facilitate the transition to the new employee.  It’s important that you make this assessment part of your standard business planning practices.

Option 2: Evaluate your existing benefit programs and look for opportunities to implement flex based and/or phased retirement programs.

  • As part of these programs, document requirements specifying that the retiree will dedicate time and resources mentoring other employees. Although implementing a flex-based or phased retirement program may be expensive, the primary goal is to provide some form of incentive with the retiree to foster an effective transition and knowledge transfer.  You can even leverage low or no cost benefits, like company sponsored discount programs and existing reward and recognition programs, to grease the wheels.

Option 3: Allow retired workers to return on a part-time or project basis and participate in company benefits like the 401(k) plans.

  • Allowing retired workers to work part-time or on a project basis you can incur cost savings by deferring hiring replacements while fostering mentoring of younger employees to preserve your business knowledge.

Option 4:  Leverage your technology

  • Consider creating a comprehensive infrastructure for storage and maintenance of your business processes and procedures to facilitate knowledge transfer.

With adequate planning and creative work options, your business will be better prepared to meet any labor shortage.  By identifying the required skills of your current and future workforce, monitoring your key person relationships, and implementing succession planning for these positions, your company can weather the storm caused by the “baby boomer” retirements.


[1] Comparison of the 2014 Older Workforce Survey conducted by the Society of Human Resource Management (SHRM) and The Alfred P. Sloan Foundation

It’s Almost National Insurance Awareness Day. Are You and Your Agents Ready?

insurance awareness day man fixing suit

National Insurance Awareness Day stresses the importance of having sufficient insurance coverage. It is a day to remind the public that insurance is an important piece of their financial safety and peace of mind. Agents will spend the day making sure their policyholder’s plans are up to date and that the public has access to educational and up-to-date insurance information. So, what can you do to get the most out of National Insurance Day?

Provide Your Agents with Data
Data and its proper use can transform how agents provide service to their customers. For example, if there is a change of address, name, or beneficiary, an agent can infer that there was a marriage, divorce or move. National Insurance Awareness Day would be the perfect time to check in and see if they are still happy with their level of coverage.
During these follow-ups, agents should ask customers to create a list of the most important things they would want to cover, including family and any important possessions. From there the agent can offer a quote and if the individual’s budget is restrictive, the lowest items on the list can be modified or excluded. By conducting this exercise, an agent can build trust with their potential client and the customer knows they are not being sold into anything they don’t need.

Provide Your Agencies with Data
Providing your agencies with data will boost overall development and efficiency because your agents will be able to anticipate what kind of changes are needed before the customer asks for them. Moreover, if an agency sees that they have too many agents in one area, the agents can be redistributed to avoid excessive competition. Continuous updates to these types of data assures that you will have a strong presence without oversaturating any one region.
There are additional ways your agents and agencies can use data throughout the year such as:

  • Understanding the current state of performance compared to goals
  • Quickly identify process, distribution, or organizational improvement opportunities
  • Increasing access to information to improve decision making
  • Refining sales campaigns
  • …and others

For more information on how to use these types of data to empower agents, download our whitepaper Transform your Insurance Agents’ World with a Wealth of Data.

Empower Your Agents into the Future
Before you launch into a project to provide your agents with more data, make sure the outcome is something that they will actually use and benefit from. We recommend obtaining your “voice of the customer” to it to prevent wasting time and investments.
Conducting a Voice of the Customer study can take on many forms, from user group sessions to surveys. Ask your agents whether they have the right tools and data, or what you can do to make their work easier when out on the road. The goal is to determine a baseline of desired capabilities, analyze the information, and determine the best course of action for delivering those capabilities. Your agents are more likely to perform at top levels when they have up-to-date tools in hand. For more information on “voice of the customer” analysis techniques, be sure to read this informative article.

National Insurance Awareness Day is a great opportunity for your agents to check in with their customers, and for you to check in with your agents. While they are making phone calls and conducting policy reviews, you can be assessing your data environment and considering improvements that will boost performance all around.

Let’s Talk About the Price of Life Insurance

Insurers should be more candid about how affordable life insurance products are

According to a 2015 Barometer Study conducted by LIMRA, Millennials overestimate the cost of buying life insurance by 213%, and Gen Xers overestimate the cost by 119%. Wow. These facts are truly shocking. With these startling statistics, I began to wonder how such a drastic overestimation has occurred.

Then I realized I had never heard an advertisement mention price, nor has anyone divulged how much they pay for their life insurance to me. Is the cost of life insurance a taboo topic? Why is the price not discussed if it is so affordable?! I confess, before not too long ago, I had no idea what life insurance would cost. I am a Millennial and was (and most likely still am) part of that group that overestimates by 213%.

A coworker mentioned hearing a few commercials indicate a price or ballpark but confessed they were on TV channels that show programs targeted for a slightly older audience (Gen X). That could explain the 94% difference in the amount by which the two generations overestimate life insurance. To that I say why not let us Millennials have some life insurance commercials!

I realize it is hard to talk about price when it varies so much based on the amount of coverage, type of products, and the health of the policyholder, but a ballpark would be a great starting point to clear up the miscommunication around life insurance’s affordability. Because that is what we have here. A miscommunication or a lack of authentic language used around insurance in general.

A coworker mentioned that for a few coffees a month I could afford life insurance. Geez, get someone out in front of Starbucks to tell me that. Even better, for every Starbucks that is built, put in a life insurance kiosk. I am kidding, of course, Starbucks would never allow that, but my point is real. Start telling Millennials (and Gen Xers) what to expect with clear and straightforward language that mentions price. More insurers need to communicate the message to a broader audience, train the agents to use that message, and use marketing to break through these misconceptions.

Easier said than done, but the same study found that “nearly one third (30 percent) of Americans believe they need more life insurance. However, the majority of Americans (54 percent) say it is unlikely they will purchase life insurance within the next 12 months.” There is a huge market here waiting to be told why they should not put off making that purchase.

Good luck insurers. I look forward to someone inventing that kiosk and helping me realize the affordability of life insurance.


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