As we hit the 18-month mark of the pandemic, life insurance is experiencing a bit of a paradox. According to the 2021 Insurance Barometer Study from Life Happens and LIMRA[i]:
American Consumers Seem to Understand the Value of Life Insurance
But Purchasing Behavior Doesn’t Align
With nearly three-quarters of Americans saying they need life insurance, it’s clear most recognize the role it plays in their financial well-being. And the increased likelihood to buy because of COVID-19—which hits 45% for Millennial consumers—indicates consumers value life insurance in light of COVID-specific challenges.
So why the resistance? Higher unemployment levels are certainly part of the story. The Life Happens/LIMRA study showed 26% of survey respondents were worried about paying monthly bills, and 21% had concerns about job security and their ability to maintain a steady income.
But employment is approaching pre-pandemic levels, while COVID-driven concerns around health and uncertainty remain. What can credit unions do now to turn awareness into action?
Two ways to help both the uninsured and underinsured.
When it comes to life insurance, misperceptions abound, and some likely have a direct impact on purchasing. Here are a few of the most common misperceptions and key truths to educate members about.
That’s especially disheartening given that the annual report from LIMRA has consistently shown consumers overestimate the cost of life insurance by a factor of three-plus. When asked what they expected to pay for a $250,000 term life policy for a healthy 30-year-old, over half of respondents thought a policy would be at least $500 a year. The true cost: closer to $165.
It’s not uncommon for members to feel confused and overwhelmed by life insurance options. After cost, here were the top five reasons for not purchasing life insurance:
It’s important to recognize that life insurance is an emotional purchase and that different racial and ethnic groups have varying attitudes around life insurance. Once you have that awareness, create tools and resources that reflect and address the concerns members face.
Help members protect the things that matter most.
When it comes to protecting the people they love, it’s not that members don’t understand the value of life insurance; it’s that there are barriers in their way. Get to the heart of why they opt not to purchase, then humanize their experience. Once uncovered and addressed, their barriers become less of a hurdle and members can move closer to financial wellness. Your credit union plays a critical role in making that happen.
For more life insurance insights and trends, click here.
[i] LIMRA/Life Happens, “2021 Insurance Barometer Study”
TruStage® Life Insurance is made available through TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by your credit union. Corporate headquarters: 5910 Mineral Point Road, Madison, Wisconsin 53705.
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