The thought of leaving your family with no financial backing is an uncomfortable and scary topic to consider. What’s even scarier? Only a small percentage of today’s consumers are actively saving for their future or setting aside money for an unexpected event. This is especially true when it comes to the middle market (25-64 year-olds with household incomes of $35,000 to $100,000), namely the Millennials among that market.
According to a 2016 study by LIMRA[1] consumers are becoming more aware of the importance and benefits of life insurance. In fact:
- 34% of Americans said they were likely to purchase a life insurance policy within the next year.
- 77% of millennial consumers said they were likely to recommend ownership of life insurance to others.
- 86% of consumers in the study agreed that most people need life insurance.
However, many Americans, namely those in the middle market, are still relatively unprepared for the unexpected and unplanned. According to this life insurance statistics report[2]:
- Less than 50% of consumers in the middle market are saving regularly.
- 33% of those not actively saving haven’t any idea how they would cope if something were to happen to the primary wage earner.
- 20% of people in this income group have no other life insurance than their employer-provided coverage, which typically only covers a percentage of an employee’s pay.
So why is there such a gap? Why is it that most consumers agree about the need for life insurance, but only a small percentage of those consumers – namely those in the middle market – have comprehensive coverage?
1. Lack of Awareness
Pop Quiz:
- Do your consumers know exactly how much life insurance coverage they currently have, if any?
- Do your consumers know how much coverage their family would actually need to support themselves, should something happen to a primary wage earner?
- Are your consumers aware of the fact that most employer-provided life insurance policies only cover a percentage of their income?
If you ask your consumers these same questions, you will more than likely receive a big ole’ “No” to at least one of them.
It is safe to assume that very few of your consumers have full – or even partial – coverage. But you’re still not going to find much success offering life insurance plans to your consumers unless you first educate them about the reasons why they need to be planning for their future.
Sharing facts and statistics is a great way to educate your consumers about ‘what could be’, such as:
- The average cost of common unplanned events, such as death or serious injury
- The statistical likelihood of a death in the family
- The estimated amount a family of their size needs saved to sustain their livelihood
After they understand the likelihood of what could be, then you need to help them make it relate to their personal situation.
2. Inability to Relate
If you really want to have success with selling life insurance to consumers, you need to speak to their situation on a real, personal level.
Take time to learn about each of your consumer, so you can offer them financial guidance that applies to their situation. Once you’ve gained a pretty good understanding about their financial situation, work with them to build a plan with realistic steps that can help them plan for their families’ futures. This personalized financial prepare might include:
- A current state, future state comparison showing where they are at financially and where they need to be
- A long-term care & savings plan
- Products they can purchase (like life insurance) to immediately help protect their family’s finances, should something unexpected happen to a wage earner.
As an added bonus: taking this sales approach with your consumers will most likely lead to increased trust and good faith, while at the same time increasing sales of life insurance and other products.
3. Lack of Access to Information
Consumers are visiting physical branch locations less and less – especially millennials. Rather than seeing this as a challenge, embrace the opportunity to use various other channels to engage your consumers in unique and meaningful ways.
The following communications channels are among the more “main stream” methods you can use to communicate with your consumers:
- Online – Place related educational resources and tools on your website and through social media pages
- Over-the-phone – Start an open dialog with consumers about their current financial needs
- Direct mail – Send financial insights and offers to current account holders
The oldies-but-goodies listed above are certainly must-haves for your communication strategy. But if you really want to see a significant spike in consumer engagement, especially among millennials, you should definitely consider adopting at least one of the following digital communication strategies:
- Email – Email communications can reach consumers on their device of choice at a faster rate and a fraction of the cost.
- Video – The use of brief, personalized video messages can increase audience engagement and retention by upwards of 53%.[3]
- Text – 77% of millennials look favorably on companies that offer text messaging communications.[3]
The truth in the matter is this: Millennials and other middle market consumers generally agree with why the public needs life insurance, but they are missing (or ignoring) the reasons why they personally need coverage.
Talk to each of your consumers to understand their situation, so you can use a personalized, relatable approach to offering them life insurance solutions.
[1] “2016 Insurance Barometer Study Shows an Improving Climate for Life Insurance.” LIMRA, 5 April 2016.
[2] “LIFE INSURANCE STATISTICS [TOP FACTS AND DATA].” Termlife2go, 8 Feb. 2017.
[3] “2017 Video in Business Benchmark Report.” Vidyard, 2017.