September is Life Insurance Awareness Month and it gives the entire industry a good excuse to revisit their plans for consumer outreach, as a means of determining what already works and what might need a little bit of tweaking. In many cases, this can start with simply introducing the subject of how important life insurance coverage can be for anyone, and more importantly what it actually costs, because in a lot of cases people understand the value of these policies but don't think they can afford it.
To generate more public interest around the importance of life insurance, racing star Danica Patrick has been brought back for the third straight year as the spokesman for Life Insurance Awareness Month, according to Life Happens, the nonprofit organization behind the month-long event. Patrick notes that while she initially didn't think much about life insurance as being part of an overall financial plan for herself, a little education went a long way toward helping her really understand the value it provides.
It may be much the same with average Americans, as consumers generally know life insurance can help them financially but may think it's out of reach for them. Many polls show Americans see that value in coverage, but conflate the cost of expensive whole life policies with the far more affordable coverage options that are now widely available, such as term life. Moreover, many people may think they're covered because they are enrolled in group policies through their employers, but may not realize just how limited those benefits can be.
What can be done?
With all this in mind, insurers may have a lot more to do when it comes to making life insurance policies more accessible and easier for consumers to understand the value, according to a new survey from Global Atlantic. For instance, 92 percent of consumers in a recent poll say they would be more motivated to try to stick to a specific weight limit for themselves, and 81 percent noted that they'd be more likely to get an annual physical exam if they could be assured they'd get discounts or other incentives through a life insurer.
"September is National Life Insurance Awareness Month, and there is no better time for savvy consumers to take advantage of riders that reward them for making healthy decisions," said Dave Wilken, president of life insurance at Global Atlantic. "In the same way that good drivers can save money on auto insurance, people with healthy lifestyles can save money on life insurance."
That may be particularly true of a demographic group long targeted by life insurers but which have typically shied away from seeking coverage en masse - millennials. The survey found that millennials were slightly more likely to both get annual check-ups and actively work to maintain their weights than either Gen X or baby boomers. For instance, 85 percent of young adults said they would more willingly get annual checkups if offered a life insurance discount, compared with 82 percent of those in Gen X and 77 percent of boomers.
Interestingly, though, the opposite was true for people in relatively low-income households, the poll showed. Households with $50,000 or less in annual income were actually slightly less likely to be interested in those kinds of discounts for weight maintenance and doctor's visits than household making more than $50,000.
A closer look at millennials
While many young adults can get significant benefits from obtaining at least some sort of personal life insurance policy, some companies are homing in specifically on younger mothers between the ages of 25 and 44, according to Our Life Covered. As with many other issues around getting young people to sign up for life insurance, these moms may not fully realize that now is the time to sign up for coverage because they are never more likely to be in good health than they are right now.
Moreover, the reason to target mothers in this age group is quite simple: They are often the ones making their families' financial decisions, so if life insurers can do more to reach those people directly, they're more likely to get women and men onboard, the report said. To do so, however, it might be time for life insurers to highlight everything coverage can help pay for. Donna Jermer, vice president of Our Life Covered, noted that while many think of life insurance as a means of covering final expenses or replacing income, it can also be used to pay down outstanding student loan debts, which are all too common - and massive - among millennials, or mortgage balances.
"The vast majority of women want to be financially independent and want to know that they can take matters into their own hands," said Jermer. "We want women to understand that life insurance exists as a means of combating poverty and a way to better protect their family. It gives them, above all, peace of mind."
What's at stake?
Today, all too many people simply go without life insurance altogether, according to Foresters Financial. One recent poll found that 84 percent of respondents agree that it's important for people to have life insurance generally, but only 68 percent said they personally needed such coverage. Along those lines, only 41 percent of respondents said they actually had it for themselves.
That's a big gap in perception for both individuals and the collective need for coverage, because if more than two-thirds say it's important to have, but only a little more than two-fifths actually have it, that may highlight how much work life insurers have to do to bridge the gap, the report said.
Whether it's by appealing more directly to financial decision-makers and more clearly spelling out the benefits of coverage above and beyond public perception, or simply trying to find a way to educate consumers about how much coverage actually costs, it makes sense for policy providers to explore all their options for outreach - not only for Life Insurance Awareness Month, but all year long.