Life insurance plays an important role in providing for loved ones and family members after an insured person’s death, allowing them a measure of financial security. A new study from Corebridge Financial examines how consumers view and use life insurance. It found that while many understand the basics of life insurance, about 50% do not have coverage and another 9% do not even know if they have it. Women (53%) were more likely to be uninsured than men (45%), and 11% of women and 7% of men said they did not know if they were covered.
In a written interview with Digital Insurance, Tim Heslin, President of Life Insurance at Corebridge, shared some insights from the survey. “Our new
“What’s particularly interesting is that while cost is the least understood, it is also the most knowledgeable. What’s more, cost represents another important extreme in our research; cost is cited as the top reason Americans have not yet purchased life insurance, at twice the rate of the next chosen reason. While there are some strong misperceptions about cost, we see this as a real opportunity for our industry to educate consumers about how affordable life insurance can be.”
He compares the cost of a $250,000 term life insurance policy for a healthy 30-year-old to roughly the amount he would spend on a streaming service each month, or about $15 a month. “Yet 16% of our survey respondents thought the cost would be more than double, and another 16% thought it would be more than three times as much.”
Heslin says this cost difference provides “a great opportunity to help customers understand that life insurance is more affordable than they might think.”
The survey found that the majority of respondents (80%) knew that the cheapest time to buy life insurance is when you are young and healthy. 72% also knew that some term life insurance policies can be converted to whole life insurance before the term expires, and the same percentage were aware that whole life insurance policies can actually provide benefits while the policyholder is still alive.
The role of technology in life insurance
As many aspects of insurance evolve with the increasing use of technology, life insurance benefits in many ways from this adoption. “Technology creates more flexibility in the application process, both for customers and their financial professionals,” says Heslin, pointing to the benefits of the company’s end-to-end application platform.
“For Generation Z and Millennials, a self-completed health questionnaire may be the preferred solution so they can apply where and when they want. However, many of this generation may prefer to sit down with a professional to go through the details of their application and discuss how their life insurance fits into their overall financial planning. When technology offers ease of use, efficiency and intuitive design, it’s a win for everyone,” he says.
While technology can speed up various aspects of the life insurance process, its success really depends on its adoption by policyholders, and younger customers seem particularly willing to use technology to speed up the process. “We believe the younger generations are looking for quick answers and quick results,” explains Heslin. “All their lives, Gen Z and Millennials have been able to access product information on demand. We see the same ‘need for speed’ in our research – 46% of Millennials and 40% of Gen Z say that if they could learn they could purchase life insurance within 24 hours of submitting their information online, they would be more incentivized to purchase a policy.”
Heslin shares that in some cases, automation of the life insurance process can result in an applicant using an online portal being issued a policy almost immediately after completing the application process, significantly reducing the time it used to take to obtain policies.
As the insurance industry continues to expand its use of technology, Heslin notes one important aspect. “While I am very excited about how our industry is taking advantage of new opportunities through technology, my first thought is something more fundamental. Those of us who work in life insurance should always remember the incredible difference we can make in people’s lives. Through our products and the protection they provide, Americans can have peace of mind that their loved ones are financially secure, no matter what happens. The importance of that peace of mind can hardly be understated.”
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