Can We Make Life Insurance More Relevant?
February 26, 2019 by JJ Lane Carroll
Leveraging existing technology and employing better consumer engagement — we as an industry have readily usable tools at our disposable, but can we do more to reach people who are not buying insurance today? Bottom line, there are small changes we can make that can really move the needle on life insurance.
Right now the landscape looks like this: insurance companies are working hard to close the $20 trillion dollar mortality protection gap, but how many people with a gap can afford to buy what they are being sold? Perhaps it is not a coincidence that the rise of obesity and diabetes in the US over the last decade corresponds to the decline in the number of life insurance policies sold. We generally attribute this decline to a focus on high net-worth individuals, but could it also be true that we simply have fewer eligible applicants and thus fewer polices? To truly accomplish our goal of closing the protection gap, we have to find ways to make insurance more relevant to people with mild chronic conditions.
Helping Anne
To me, it all starts with a mindset. As an industry, we spend so much time evaluating risk and mitigating risk that I think sometimes our brains get stuck. We focus on “preferred lives” with the image of a healthy 6-foot-tall person weighing 175 pounds, with blood pressure of 110/75, and normal blood sugar and all the rest. That’s a nice life insurance candidate. But in reality, as long as we price risks appropriately, we should be just as happy insuring real people (who make up most of the population) that struggle daily with managing their health. And yet we make it so difficult for that person.
A friend and colleague of mine — I’ll call her Anne — would really like to buy life insurance, but she can’t even start the journey because she struggles with weight-related medical issues.
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