With their transformative ability to enhance prosperity and financial security across generations, life insurance products play a significant role in financially empowering American families.
But not enough Americans have adequate coverage. About 60 million households are uninsured or underinsured, with an average coverage gap of $200,000. And just 50% of Americans have any life insurance coverage, down from 63% a decade ago.
America’s life insurance industry is committed to reversing this trend and securing the financial futures for more American families. ACLI, together with the National Association of Insurance and Financial Advisors and Finseca, introduced a proposal last week designed to help.
Presented at the National Association of Insurance Commissioners Insurance Summit, the initiative is a multifaceted workplan designed to remove barriers to the producer licensing process. By eliminating needless and outdated obstacles, we can broaden the talent pipeline for diverse, well-qualified producer candidates. These candidates, in turn, will be able to expand access to financial security products to more communities and help close the coverage gap that especially affects low- and middle-class families.
These efforts are important. A recent study showed that Hispanic and Black Americans who may be in the underserved gap are more likely to feel that a connection or commonality between them and their financial adviser is important. This includes a preference for working with someone who has a comparable upbringing or life experience; working with an adviser who is affiliated with their employer; and working with an adviser who has a similar racial or ethnic background or is the same gender as they are.
ACLI supports removing any unwarranted barriers that may impede the ability of candidates to become licensed by or employed with the insurance industry. Some of these barriers are structural, like excessive and unnecessary pre-licensing mandates. Others are just outdated, like only offering licensing exams in English.
Adopting these commonsense reforms will enhance the recruitment, development, and retention of diverse candidates in the life insurance producer community. And it will lead to more American families feeling secure that their financial futures are safe and protected.
Ian Trepanier was a Policy Analyst at the American Council of Life Insurers. His responsibilities included advancing policies that promote financial solvency, improving reporting metrics, and removing barriers to producer licensing.
