Life insurance is critical, but the industry is constantly changing — shaped by shifting demographics, regulatory changes, market volatility, and increasing consumer expectations. To stay competitive, insurers must not only offer reliable protection but also provide innovative, tailored products that meet modern client needs.
Lewis & Ellis understands the complexity of today's insurance environment. Whether you're refining an existing product or developing a new life insurance solution from the ground up, having a strategic actuarial partner makes all the difference. Learn about providing all-important life insurance to your clients, and why it's essential to know what people want in this blog.
Types of Life Insurance: What Does Each Cover?
Insurers must offer product portfolios that reflect the broad spectrum of client life stages, financial goals, and risk tolerance. Lewis & Ellis helps carriers evaluate, design, and price a wide range of life insurance products, including:
Term Life Insurance
Term life insurance provides a straightforward and affordable form of coverage that pays a death benefit when the insured passes away during a specified term — often 10, 20, or 30 years. It's ideal for individuals and families with temporary financial obligations, such as mortgages, student loans, or childcare expenses.
Insurers can offer term insurance options to meet the needs of budget-conscious buyers and young families who require maximum protection at the lowest cost. It's also a key entry point for first-time life insurance buyers, helping insurers build strong, long-term client relationships.
Whole Life Insurance
Permanent life insurance policies like whole life coverage guarantee both a death benefit and the accumulation of cash value throughout the insured's life. This type of insurance provides long-term protection and is often used for estate planning, wealth transfer, or building up a nest egg for later in life.
For insurers, offering whole life products enables them to serve clients seeking long-term financial security and stable, predictable growth. The element of cash value adds flexibility, allowing policyholders to borrow against their life policy or supplement retirement income, which enhances the customer experience and increases retention.
Universal Life Insurance
Universal life insurance combines lifetime coverage with adjustable premiums and interest-earning savings. It offers more flexibility than whole life, making it attractive to clients with fluctuating income or changing coverage needs.
Insurers benefit from including universal life in their product portfolio because it appeals to clients looking for control over their insurance and savings methods. This product supports long-term engagement, as policyholders may adjust coverage in response to major life events like marriage, parenthood, or retirement.
Variable Life Insurance
Variable life insurance offers a death benefit along with a cash value account that can be invested in various sub-accounts, similar to mutual funds. While this policy carries some investment risk, it also provides an opportunity for greater returns. This type of life insurance is best suited for experienced investors who are comfortable managing market fluctuations in pursuit of higher rewards.
For insurers, offering variable life insurance helps meet the needs of financially savvy clients wanting to integrate life insurance with an active investment strategy — positioning the insurer as a partner in long-term wealth management.
Indexed Universal Life Insurance
Indexed universal life insurance features flexible premiums, an adjustable death benefit, and a cash value component tied to a market index like the S&P 500. It provides growth potential based on market performance while typically offering downside protection through guaranteed minimum interest rates. Indexed universal life insurance appeals to people who seek a balance between risk and reward.
Insurers can deliver indexed universal life insurance to stay competitive among policyholders looking for moderate market participation with lower volatility — especially those interested in using life insurance for tax savings.
Final Expense Insurance
Final expense insurance is a type of whole life insurance designed specifically to cover funeral costs, medical bills, and other end-of-life expenses. With smaller face values and simplified underwriting, it's particularly attractive to older adults who want to ensure their loved ones don't have as much financial burden after they're gone.
For insurers, offering final expense insurance fills an important niche in the market and builds a good reputation with clients who may not qualify for traditional life insurance but still seek peace of mind and financial dignity in their final years.
According to LIMRA, whole life insurance generally secures the highest portion of premiums compared to other life insurance types. Here's a breakdown of the various types of life insurance and their percentage of market share based on premiums in 2024:
- Whole life: 36%.
- Indexed universal life: 23%.
- Variable universal life: 15%.
- Term life: 19%.
- Fixed universal life: 7%.
The Benefits of Offering Robust Life Insurance Solutions
Companies in industries across the board face countless risks daily, no matter the line of work or services offered. Insurance companies can step up to the plate and deliver an abundant life insurance portfolio for all kinds of clients, meeting them where they're at and winning long-term relationships.
But why is this advantageous for insurers? Here are the top benefits of offering robust life insurance solutions:
Increased Market Share Through Tailored Products
Insurance companies can widen their reach and increase customer adoption by tailoring products for a broad range of organizations. By becoming more niche or reaching clients that may otherwise not receive coverage, insurers can secure increased market share.
Improved Persistency and Customer Retention
Since the insurance market is constantly shifting to make space for new regulations, evolving client expectations, and worldwide health concerns, insurance companies that can keep up and continue offering relevant products will ride the waves of change seamlessly. Also, being one step ahead of trends can ensure insurers retain customers, creating loyal client bonds that come with long-term engagement and trust.
Tax-Advantaged Structures That Appeal to Affluent Clients
In several scenarios, clients may come to a life insurance company looking for tax benefits that come along with their life insurance policy. Insurers that understand the complexities of life insurance strategies can use tax-advantaged structures to increase savings for prosperous accounts. This puts the insurer in a position to act as an advisor, becoming a trusted partner to clients and offering deep industry knowledge and expertise.
Legacy and Estate Planning Products for High-Net-Worth Individuals
Leaving a financial legacy is a top priority for many affluent clients, and insurance companies can earn these people's business by offering wealth transfer and estate planning products. These insurance plans can help safeguard clients' money through popular wealth transfer strategies like irrevocable life insurance trusts, survivorship life insurance, and charitable giving. Securing these types of clients can provide insurers with a higher premium payment and larger life insurance plan volume, as well as the potential for additional products and cross-selling.
Business Continuity Planning via Key Person and Buy-Sell Life Insurance
For business owners, life insurance is a critical component of succession planning and ensuring the company is set up for whatever may happen in the future. An insurance company can offer life insurance policies that help these business owners have the financial support to maintain business continuity in the event of a main executive's passing away. Additionally, buy-sell life insurance gives executives the option to purchase life insurance policies for one another, ensuring that, if one owner is no longer around, the surviving owners or heirs can use life insurance to purchase the deceased individual's part of the company.
Liquidity and Cash Flow Solutions That Offer Mid-Life Flexibility
Insurers can gain more mid-life clients by offering coverage that can improve liquidity and cash flow. Liquidity equals the amount of cash that a business or business owner has access to at any point in time. Life insurance coverage provides these policyholders with the option to retrieve funds periodically and grow that money at a set interest rate over time.
Customizable Riders and Benefits for Greater Product Appeal
Insurance companies can reach a wider range of clients by providing personalized add-ons that offer valuable flexibility and financial protection on top of the existing life insurance policy. This can give people peace of mind knowing they're getting tailored coverage that suits their specific circumstances. Ultimately, better product offerings equal greater appeal to potential clients, encouraging people to choose that particular insurance company.
Trust Lewis & Ellis WIth Your Life Insurance
When life happens and uncertainty strikes, having the right life insurance plan makes all the difference. Lewis & Ellis brings decades of actuarial expertise to help you design competitive, reliable insurance products that give your clients peace of mind.
We provide the following life insurance and annuity expertise:
- Traditional life insurance and annuities.
- Universal life insurance.
- Term life insurance products.
- Variable life insurance and annuities.
- Final expense and pre-need insurance.
- Home service and direct response insurance.
- Credit life and group life insurance.
- Indexed life and annuity.
Is your insurance company looking to develop more competitive products or look at your specific regulatory risks? Connect with our team to receive industry-leading actuarial consulting today.