With the economy improving since the recent recession, it is important for insurance companies to look toward areas of potential growth. The middle class has always been a group that insurance companies targeted to gain new customers, but it seems as if the current uninsured or underinsured middle class offers further potential for growth based on a study recently completed by LIMRA.
Today, only 46 percent of middle-income consumers (those between the ages of 25 and 64 with salaries ranging from $35,000 to less than $100,000 annually) have individual life insurance policies, according to the latest data from LIMRA, released to coincide with the start of Life Insurance Awareness Month. More worrying, though, is that about 1 in 4 such Americans have no life insurance coverage at all. While 60 percent are enrolled in group life plans, this is often far less than what would be needed to take the place of the loss of income due to death. As such, 51 percent say that if they were to face the death of a family member, they would need to make many changes to their financial lives.
Robert Kerzner, president and chief executive officer of LIMRA, noted that this might indicate a significant disconnect between what people think they might need to do if a loved one were to die, and the realities they might face, the report said. However, there may be good news on that front as well.
Consumers want a better understanding of this coverage type
Another aspect of the poll, suggested a number of preferences among consumers when it comes to dealing with prospective life insurance policies, the report said. For instance, half of people polled stated they preferred to purchase life insurance in a face-to-face meeting with a trusted financial professional, who can help to advise the consumer as to how much life insurance coverage they should purchase.. Further, some 60 percent said that they think it's important for their advisor to "represent a respected brand."
The more insurance companies can educate potential consumers as to the need for life insurance and the security it brings, the greater the potential for growing their life insurance business. The middle market appears willing and able to buy insurance, so with a little bit of effort educating the consumer, this market seems like a prime target for growth and an area to concentrate marketing efforts.