According to the 2020 Insurance Barometer Study, nearly half of American adults (46%) are without a life insurance policy. With the ongoing COVID-19 pandemic, the need for coverage is greater than ever. This fact is not lost on consumers, as 36% of participants said they planned on buying a policy in the next year.
Not only do the numbers above reveal a large insurance ownership gap, they also present an opportunity for agents and advisors. With Life Insurance Awareness Month coming in September, now is the time to start talking to prospects and clients about the security provided by LI coverage.
Below are more life insurance related findings from the 2020 Insurance Barometer Study that you should know heading into September.
Fewer People Own Life Insurance
The study reveals that 54% of American adults own a life insurance policy. This marks a 14% drop in coverage since 2011. The largest decline in ownership comes from people aged 45 and older, and in households with incomes of less than $100,000 a year. The study equates the drop in ownership to a 10-year decline in employer-paid life benefits.
A New Point of Sale
The days of frequent in-person sales are all but gone. According to the study, the number of people who prefer to buy life insurance in person dropped from 64% in 2011 to 41% in 2020. Online sales grew from 17% to 29% during that same timeframe. As the COVID-19 pandemic continues to affect our daily lives, that number is expected to grow significantly.
This highlights the need for a strong digital marketing plan. Social media, email, and video marketing are all effective ways of delivering your message to consumers.
It’s also important to have a clean, functional website that provides adequate information about your services. Use downloadable materials (whitepapers, etc.) to capture the consumer’s information for follow-up conversations. We operate in a digital world now, and your marketing efforts should adapt accordingly.
Filling the Ownership Gap
The number of people planning to buy life insurance is growing. As mentioned at the beginning of this article, 36% of consumers say they will purchase a policy within the next 12 months. In 2014, that number was as low as 10%. The study also shows that the “need-gap” – the number of people who know they need life insurance, but do not have it – has grown to 16% in 2020. The COVID-19 pandemic will likely motivate more people to purchase life insurance.
Objections and Solutions
The study also touches on common reasons that people decide against purchasing life insurance. The most cited objection comes from overestimating the cost of a policy. Roughly half of consumers believe a life insurance policy would cost them more than three times the actual price of coverage.
One way to overcome the cost objection is to make use of hybrid products, and continuous or simplified underwriting. These approaches can increase the chances you will make the sale by as much as 50%.
Of course, the proactive approach is perhaps the best way to overcome consumer objections to life insurance. Agents and advisors who can successfully engage their target markets and educate people on the realities of life insurance are most likely to make the sale. As the study shows, need and opportunity are there. Are you taking advantage of it?
Source: 2020 Insurance Barometer Study
**
This week’s Marketing Corner is part of our 2020 Life Insurance Awareness Month coverage. For more life insurance information, please register for our 2020 LIAM Opportunities webinar, taking place on Monday, August 10th at 10 AM CST.
Presented by IAMS Exec. VP and CMO Curtis Hawks, 2020 LIAM Opportunities will cover:
- Legislative Changes that Raise the Need for Life Insurance
- Life Insurance Concepts and Strategies
- Our New Life Insurance Software Tool That Helps You Close Business and Bust Objections Before They Occur
- Our Robust 2020 LIAM Kit
