Staying healthy — physically, mentally and financially — was a priority for Americans even before the country experienced the worst health and economic crisis in generations. There may never be a more ideal time — for insurers and advisors seeking to extend their value propositions to customers — to blend financial protection with health maximization and disease prevention.
For the financial services industry, this represents a unique opportunity to play a more holistic role in supporting consumers in protecting their personal and financial health.
Consumers show a strong interest in improving their physical wellness. Recent LIMRA and BCG research shows that 97% of consumers are interested in improving at least one aspect of their wellness: exercise, sleep, diet, etc.
Real life, however, often curbs this enthusiasm. Consumers cite lack of time, lack of motivation and feeling overwhelmed as reasons for not improving wellness. The opportunity here is for advisors to communicate and form connections with consumers:
» Recommend apps such as RealAge, and time-saving personalized training devices such as Peloton.
» Provide social nudges about minimum sleep requirements.
» Offer a comparison to others in their demographic.
» Emphasize products from insurers that connect wellness with rewards (e.g., Vitality or Aspire from John Hancock).
Similar opportunities to support customers and build business exist in the financial
wellness arena. Workplace benefits offer a critical avenue by which many Americans access financial health benefits. Bureau of Labor Statistics data indicate that 64% of private industry workers have access to a defined contribution retirement plan through an employer, and 41% have access to workplace wellness plans. In addition, consumers are aware of their need for financial wellness, with more than 50% acknowledging their need for more savings.
As with physical wellness, however, reality often interferes with best intentions. Recent Secure Retirement Institute research indicates that nearly half of households only have enough emergency savings to cover three months of expenses. Given the ongoing economic uncertainty created by the pandemic, consumers may be putting off long-term goals to focus on short-term needs. The CARES Act opened up the possibility of new types of withdrawals from retirement plans, and SRI research shows 9% of workers taking advantage of that new option as of May.
The same opportunity exists here for advisors to communicate and form connections with consumers, in terms of effective, holistic financial wellness:
» Tailor offerings to meet individual needs. A young family may need help with life insurance or a 529 plan; a woman in her 60s may have questions about Medicare and Social Security; others may prefer investment assistance given the volatility of today’s market.
» Connect consumers with digital tools to help manage their money in terms of day-to-day budgeting, savings or debt reduction.
» Reach out in person. Even though many people express interest in tools that are digital, easy to use and designed for repeat engagement, offering face-to-face advice (even via Zoom) will resonate.
Decisions about health and financial wellness are complex — especially given today’s volatile environment — so it makes sense for people to reach out to an expert. The growing need for improved financial health parallels the need to steer consumers toward best practices for physical health. In both cases, healthy lifestyles translate into potentially greater longevity for consumers, greater productivity for employers, and greater opportunities for insurers and advisors