Shifting The Life Insurance Landscape In A Digital World

By Yaron Ben-Zvi

Ninety-five million. That’s the number of American adults without life insurance, according to LIMRA.

Despite it being a pivotal part of financial protection, many consumers are still not putting a priority on buying life insurance because they feel daunted by the task. And, considering the current system, we can’t blame them. A medically underwritten policy can’t be purchased online and the lengthy four to six weeks it can take to receive final policy approval and coverage can make buying life insurance seem like a chore.

In an on-demand world, with endless to-do lists and even more distractions, it’s easy for people to put off researching and purchasing a policy in favor of the day-to-day tasks we need to accomplish. As an industry, we can’t let that happen.

The perceived hassle of purchasing a policy is causing a significant barrier to entry for prospective buyers. This will likely increase as millennials, who are arguably the generation most accustomed to the convenience of online options, start building families and have dependents who rely on them financially.

There are several steps that we as an industry need to take to increase our appeal to prospective customers and show we understand the need for transparency and convenience. The core of this is capitalizing on the enormous opportunity to embrace technology, and the accuracy and convenience it offers, to improve customer relationships now and for future generations.

Here’s where we can start:

Provide Online Purchasing Power and On-Demand Access

An increasing number of companies have emerged to cater to this mindset in which everything should be available online or at the swipe of a finger. The life insurance industry should look to companies like Oscar and Doctors on Demand that offer instant access to information and solutions that consumers normally find difficult. For example, both companies allow their customers to speak with a doctor immediately without the hassle of needing to make an appointment and disrupt their day by heading into a doctor’s office. Consumers walk away feeling confident about the decision they made and in control over the outcome. The result for the business: loyal, repeat customers.

We can help consumers make the best choice if we give them the options and equip them with the tools they need, and the freedom to do it on their own time.

Adding digital capabilities not only shows consumers we value their time and preferred methods, but gives them access to choices that are currently unavailable.

Simplify and Humanize the Process

According to another LIMRA study, Americans understand life insurance is valuable, but are turned off by shopping for coverage. They find the language confusing, archaic and laden with jargon laden. Combine this with a process that takes many weeks and involves multiple communication touch points, and many people may choose to forgo committing the time needed to obtain coverage.

Industry players need to keep conversations about life insurance simple and, most important, ensure that consumers are getting the advice and guidance they need.

Looking at a recent report from PriceWaterhouseCoopers, 59 percent of consumers interact with brands and retailers online. From tweeting questions to chatting live with customer service agents, it is clear that people prefer to communicate with companies online and in a bit more of an informal manner – like they would a friend. Today, it’s not only how consumers expect to interact with companies, but online communications also help brands define a voice that consumers can relate to.

There is much more to do in terms of bringing customer interactions online in our industry, but it’s also important that we make sure to personalize, humanize and add transparency to the full experience for consumers.

Looking Ahead

Technology will continue to change the way we do business and interact with consumers across any industry. Looking at the current digital landscape, consumer-facing markets from retail to banking have moved quickly to adapt, and the life insurance industry needs to move at the same rate.

With many individuals unclear about the importance of life insurance and others turned off by the long and complex purchase process, it’s crucial that we embrace this revolution to take the industry in a positive direction and better understand prospective customers. As consumer needs are shifting alongside technological innovation, the life insurance industry needs to be prepared to move at a similar rate in order to keep up with consumer demand and prevent us from scrambling to catch up after major trends already have taken shape.

Yaron Ben-Zvi is the co-founder and CEO of Haven Life. Yaron has a background in financial services startups, having founded two others before Haven Life. Yaron may be contacted at [email protected].