Life Insurance: An Industry Embracing Change
By any definition, this has been a year of profound change. Nearly 30 million people worldwide have been infected with COVID-19, and nearly 1 million have died. It’s hard to grasp how quickly this pandemic has changed our lives from so many perspectives — economically, socially, politically and financially.
If there were ever a time to convey the importance of life insurance in protecting families, it is now. But we have work to do. The 2020 Insurance Barometer study we conducted with Life Happens in January, showed only 54% of Americans have life insurance compared to 63% a decade ago. And, for those who do have insurance, LIMRA research shows there is an average coverage gap of $225,000 per household.
Fortunately, consumers’ awareness and understanding of the value of life insurance is increasing. A recent LIMRA consumer study of those who purchased life insurance in the last two years indicates that 68% are likely to purchase more life insurance because of COVID-19. Of those who have not purchased life insurance in the last two years, 22% said they were more likely to purchase some because of COVID-19. Combined, 29% of adults reported that they are more likely to buy life insurance in the next year, a market opportunity of 75 million adults.
With social distancing requiring new and different ways of doing business, our industry’s ability to help existing and prospective customers has been challenged during the pandemic. But, this is changing. There is an increased focus on the direct-to-consumer channel. And, advisors are becoming more proficient at using different types of technology to connect with their current clients and prospects.
We saw growth in policies sold in the 2nd quarter of 2020, up 2%, according to LIMRA’s second quarter 2020 sales survey. This was the first quarterly growth for total policy sales since 2016.And, in July, life policies roughly increased by 12% over July ‘19, the strongest increase in some time.
It’s encouraging that the value of life insurance is resonating with more consumers today. But more can be done.
Through initiatives like Life Insurance Awareness Month, our industry can showcase the tremendous value that coverage can provide to improve Americans’ financial security during this pandemic and beyond.