Life insurance with critical illness. Affordable life insurance for the middle market - Accenture Insurance Blog

The Wall Street Journal recently published an article called “ More Go without Life Insurance.” The article shares some fairly startling findings from research firm Limra. Affordable life insurance.

In 2004, 22 percent of US households—roughly 24 million households—did not have life insurance coverage.

Today, nearly one-third of US households—roughly 35 million households—do not have life insurance coverage.

With these numbers, it should be fairly clear that, moving forward, there are some serious opportunities for insurers.

Causes of the decline in coverage

There are a number of reasons for the declining coverage of US households. The most obvious reason is the current economic situation, where debt reduction is a main priority and many families live paycheck to paycheck. Policy owners are struggling to make premium payments on existing policies.

Changes in employment are also responsible. Some employers are scaling back on benefits, with insurance being one of the first benefits to go. As employees are laid off or their hours are reduced, they no longer qualify for group term coverage.

Whole life insurance cost

The article also cites other reasons—ones that point the finger at the insurance industry itself.

Though life insurance premiums have dropped, other types of insurance have not. Some consumers may have had a poor experience with agents after bigger policies with bigger commissions. And, along the same lines, as agents go up market to target big income earners, they create a void in the middle market.

But, as Michael Costonis and Dave Shatto discussed a few months ago, there’s a big market for the underserved: those under the age of 40 with incomes below $100,000. I’ve also spoken at length about the idea of affordable life insurance.

Opportunities in the market

The opportunities to break into this underserved market are significant. Clearly, cost and value are of primary concern to the mid-market consumer. Equally important is better educating and connecting to that consumer in the right context.

The article also states that while the majority of those without coverage are interested in it, they don’t know where to begin. They don’t know an agent or broker. It goes further to break down the needs of baby boomers, who want face-to-face support, and younger buyers, who want to shop online.

Student insurance

This market is ripe for innovation, and for crafting coverage for affordable life insurance that brings better value to the consumer.

In my point of view, insurers have an amazing opportunity to more effectively cover and grow the middle market. Strategies to consider:

Using customer segmentation to define core attributes, preferences and key buyer values within the middle market.

Revisiting your sales process to consider the role different channels could play in better connecting with those customer segments while reducing overall sales costs.

Innovating to simplify the education, features and pricing of your products.

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Leveraging social media, digital marketing, mobile, analytics, and collaboration technologies to create more emotional connections with key communities.

How will you address this middle market growth opportunity?
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