As the world focuses on 2022, still emerging from the Covid pandemic after nearly two years, many industries continue to modify their business models and customer-related marketing strategies to remain profitable and stay in business.
The life insurance industry is no different. Companies are reassessing their direction and messaging to better connect and inform targeted markets and address related shifts in buying behaviors.
More companies will target millennials in 2022 for life insurance. Millennials are now the largest demographic group in the United States, at around 72.2 million people. Yet when it comes to life insurance, they are underserved.
In the absence of real knowledge about life insurance — the options that exist, their eligibility requirements, and their costs — millennials cling to preconceptions and ideas that need to change.
Many 25 to 40 year olds do not see life insurance as a “must have”. It’s all about information, or lack thereof, as these eye-opening statistics, courtesy of the Best Life Rate website, show:
# 44% of Millennials overestimate life insurance costs by 5x.
# 58% don’t buy life insurance because they don’t know what type of policy or how much coverage to get.
# 38% do not purchase coverage for fear of not qualifying.
# 43% say they just haven’t been approached to buy coverage.
It’s high time to flip the insurance industry and change perceptions. The best way to change this mindset is to focus on specific messages that resonate with this demographic to better educate them – explaining that policies are available for all budgets and price points, even those with pre-existing conditions. The right life insurance provider can help determine the amount of coverage a customer needs, taking into account the budget.
With more education using social media, the insurance industry can dispel many of these life insurance myths. According to Best Life Rate, Millennials use social media more than other age groups for research, to check contact details for insurers, advisors or agents before doing business: Facebook (26%), Instagram (11 %), Twitter (9%), Linkedin (9%) and YouTube (17%). Those who trust the agent/advisor and the company are the most likely to purchase life insurance. So, sharing clear details about costs and options can help.
Another Covid-related impact for the insurance industry that will continue into 2022 is that there are a greater number of potential policy buyers who are self-employed.
In addition to layoffs, there have been many resignations during the pandemic for childcare and other reasons. Many of these people have started their own business; more than 4 million applications have been filed for new businesses from 2021 to September.
Millions of people probably started new businesses because they wanted to make their mark; to make the difference. They are looking for better opportunities for themselves and their families, and if so, life insurance is a smart part of that strategy.
With the right life insurance policy, people can ensure that their families will see the benefits of their hard work after they are gone.
Often people let their employment status determine life insurance coverage. It’s another myth that the insurance industry will change in 2022 through education.
When they quit their job, many people don’t realize that they can still get life insurance on their own. The unemployed, self-employed, gig workers or freelancers can still benefit from affordable life insurance.
People who run a business need their policy transactions to be simple, digital first and with a clear menu of choices. It can even help to have insurance products that are flexible enough to scale up and down depending on the size of the business.
Life insurance for the self-employed should consider a few business-related factors that are different for employees covered by life insurance through their employer. Such coverage ensures:
# Your business can continue without you
# Any debt or real estate related to your business will not be the responsibility of your heirs
# There will be money to fund a buy-sell agreement that can help someone buy or sell your business, whether it’s a beneficiary or a partner.
The bottom line is that life insurance is necessary – no matter where people are in their career trajectory. Successful life insurance companies will relay this important point until 2022.
There is no denying that Covid-19 has impacted national health and financial stability for many. Among the hardest hit communities were minority neighborhoods.
This population was already underserved by the majority of insurance companies, which did not sufficiently explain the importance of life insurance as part of a financial portfolio or retirement fund. Minority communities have traditionally not been targeted with messages that shared the concept of financial literacy.
As 2022 approaches, the industry will experience greater change, including new ways of thinking to better meet the needs of vulnerable communities. Successful insurance strategies will integrate social responsibility into business commitments and close any coverage gaps.
The Insurance Information Institute is an example of an industry group educating member companies about the importance of targeted messaging that life insurance is a way to leave loved ones better off financially. In April 2021, Financial Literacy Month, they highlighted messages and initiatives designed to improve financial literacy.
Digital transformations continue to happen in many industries, including insurance. Businesses are leveraging new technologies to simplify and reach individuals across multiple demographic groups. Following the impact of Covid on the practice of in-person consultations in the insurance industry, the sales process has been modernized.
In-person meetings are no longer the primary driver for purchasing new insurance packages. Consumers can now use their smart phones and text messages to purchase whole life insurance plans. This technology trend also relates to the use of big data to perform automated underwriting. Where before 40% of people would normally go through an automated process, today 70% do. Gone are the days when most people had to urinate in a cup or have blood drawn to qualify for policies.
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It is now a digital process that also takes into account situations such as pregnancy and weight gain. Previously, many women were wrongly denied a blanket due to the extra weight of the baby.
Data digitization will continue to be a priority next year.
The insurance industry, like so many others, continues to use lessons learned from the Covid pandemic to shape its marketing and sales strategies for 2022.
Written by Lacrecia Cade.
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