To successfully leverage this promotional campaign, educate clients and prospects, expand online options and be more active on social media.
COVID-19 has underscored the need for many Americans to review their life insurance needs and seriously consider the purchase of life insurance. With today’s numerous uncertainties, insurance is being seen as a way for millions of families to provide some level of protection against the unknown.
This appreciation for more protection is occurring at a time when life insurance ownership in the U.S. has declined significantly. According to the 2020 Insurance Barometer Study, over the past decade, U.S. life insurance ownership has fallen nine percentage points to 54%. Researchers attribute this drop to a broad decline in employer-paid group life insurance benefits over the past 10 years.
Despite this drop, the intent to purchase life insurance is at an all-time high, with 36% of Americans saying they intend to purchase life coverage in the next 12 months, according to the survey.
“While we are encouraged by the increased interest to purchase life insurance coverage and believe the COVID-19 pandemic may also bolster the perceived need for life coverage and increase purchase intent, our past research shows just a fraction of people actually follow through and buy the coverage they need,” said Alison Salka, Ph.D., senior vice president and head of LIMRA research.
LEVERAGING THE LIFE INSURANCE AWARENESS CAMPAIGN
So, what can agents do to acquire more clients during the life insurance campaign now and beyond? The first step they might want to consider is understanding the reasons why so many Americans do not own life insurance.
One thing that deters consumers is their perception of the cost of life insurance, according to the survey. Since the study began, consumers have consistently overestimated the cost of life insurance. The study shows that more than half of all Americans estimate the cost of a term life insurance policy at more than three times the actual cost. Younger Americans are likely to estimate the cost to be as much as five times the actual cost.
“Educating consumers about the value and importance of life insurance — while also providing them information about the true cost of purchasing coverage — will help get more consumers to buy the coverage they say they need,” said Faisa Stafford, LUTCF, president and CEO of Life Happens.
“The COVID-19 pandemic has demonstrated how precarious life can be and how important life insurance can protect against the unknowns,” she added. “The study finds 16% of consumers — 41 million Americans — say they need life insurance coverage but don’t have it. It’s our job to help consumers protect their families and businesses’ financial future, and life insurance is one of the greatest ways to do this.”
EXPAND ONLINE OPTIONS
Historically, the majority of Americans have preferred to purchase life insurance in-person from an agent or advisor. As use of technology has become more ubiquitous and people have grown accustomed to conducting more transactions online, this trend has shifted. In 2011, 64% of consumers said they preferred to buy in-person; by 2020, just 41% felt this way. It is not surprising that the preference for online purchasing has doubled from 17% in 2011 to 29% in 2020.
“Over the past several years, life insurers have expanded their simplified and automated underwriting practices to make it easier and more cost effective to buy life insurance online,” Salka noted. “In recent months as we were practicing social distancing, our research showed an increase of online applications, illustrating the importance of this option to buy coverage.”
THE NEED FOR SIMPLIFIED UNDERWRITING
The study also shows that half of all Americans are more likely to buy life insurance if simplified underwriting is used. The top reasons consumers give for wanting to use simplified underwriting are:
- It is fast and easy – 66%
- It is unbiased and objective – 66%
- It provides transparent explanations of risks and pricing – 58%
- It prevents the need for medical exams, blood and urine samples – 56%
- It prevents the need to see a doctor – 55%
INCREASE USE OF SOCIAL MEDIA
While in-person sales have declined, the use of social media has substantially increased. Almost half of the consumers surveyed say they have used social media to gather information on financial topics, companies or advisors. Facebook and YouTube are the most used sites mentioned by social media users.
In fact, just from 2019 to 2020, use of both Facebook and YouTube for financial topics has doubled. The number of consumers looking for an advisor is also growing, with 1 in 4 consumers saying they use social media for this purpose.
Just under two thirds (62%) of those using social media sites for finance-related topics are using them to read other people’s reviews and comments on their agent(s). Almost as many are looking for information on products and services (59%).
“Leveraging social media is now indispensable for financial professionals to market themselves and engage with consumers — especially with younger generations and during this time where financial professionals aren’t able to meet face-to-face with clients,” Stafford commented. “Forty-five percent of consumers who use social media leverage the tool to keep in touch with their agent or advisor.”
GET HELP FROM LIFE HAPPENS
In addition to taking these steps, you can reach more prospects during this important campaign by using Life Happens’ marketing-automation tool, Pro V3.
This platform provides prewritten print materials such as flyers, as well as digital assets such as social media graphics, emails and more, to allow agents and advisors to easily deploy them for client prospecting and retention. It makes it easy for agents and advisors to have a professional digital and physical footprint while spending little or no time in undertaking marketing campaigns.
“The big improvement in the Life Happens Pro V3 is that compliance is built in,” said Nate McGrath, AVP of Strategy and Product at Life Happens. “One of our previous challenges was that our agents/advisors wanted to use our materials, but were prevented from doing so because they were not compliant approved. The third generation of the platform changes all of that, and we can now better serve the vast majority of insurance agents and advisors.”
In addition to Pro V3, Life Happens has created a Virtual Tool kit, which offers best practices for working remotely, webinars and tips and techniques for successful digital marketing.
For more information, visit www.lifehappens.org.