Over the past several years, life insurance companies have learned the hard way that many consumers think they simply cannot afford such coverage, even as the economy continues to improve. As a consequence, it seems that many experts are now predicting that life insurers will start to look into more innovative types of coverage options that might help to entice wary consumers to get into the picture once again.
Perhaps the biggest of these changes will come in the form of products that will allow greater ease when consumers want to convert their permanent policies to cash value, according to a report from Life Health Pro. Others may prefer to turn death benefits into products that behave more like annuities, and here, too, it seems that more insurers will be willing to help them meet that demand.
Part of the reason for this is that the target audience for life insurance is shifting; older people still value it but may not have the money to keep paying for it, while younger people are unsure of how such coverage might benefit them now. As such, industry expert Michael Staeb recently told attendees at the National Association of Insurance and Financial Advisor's young advisor team forum that they should be on the lookout for ways to better meet three changing values in the industry. These days, consumers seem to be primarily worried about dying too soon (before their policies can build significant value), living too long (outlasting that value), or at some point amassing huge medical bills.
What can be done?
Staeb suggested that one thing many modern consumers might like to do in these cases is get a little more diversified, the report said. Instead of one policy worth $2 million, it might be wiser for these people to buy multiple policies with a combined value that matches their needs, but which aren't quite so expensive and restrictive. For instance, staggering the terms of such policies so that they can make more versatile decisions as they age might go a long way toward making clients feel flexible and protected at the same time.
The more life insurers can do to meet consumers' evolving needs given the current economic situation, the better off they might be in terms of retaining old policyholders and still making themselves appear attractive to new ones.