Why this is a golden age for life insurance

By Brooks Tingle

Every generation has defining moments, but few experience an event like the COVID-19 pandemic — an inflection point that delineates the “before” from everything that follows. Historians and future generations will undoubtedly use the past two-plus years to study significant societal change.

In the life insurance industry, we felt change too. Consumer interest in life insurance spiked at the outset of the pandemic and we’ve seen steady demand ever since. And while we have always been in the business of providing protection and peace of mind, today that’s not entirely enough to meet consumers’ growing needs and demands.

So what has changed? Many potential customers have fundamentally shifted their attitudes toward core life priorities such as health and wealth, and they’re turning to life insurance to support their newfound aspirations to live longer, healthier, better lives — a trend that is supported by multiple consumer surveys. The 2022 Microsoft Work Trend Index revealed 52% of North American workers said they are more likely to prioritize their wellness over work than they did before the pandemic. What’s more, well over half of all Americans say they are more likely to see the value of life insurance due to the pandemic, according to a LIMRA report.

This shift is a silver lining of the pandemic for the industry and for consumers. It’s why, for more than a year, I’ve been calling this a golden age for life insurance. Notwithstanding the obvious human tragedy, COVID-19 has created opportunities and prompted conversations that the industry should embrace to close the coverage gap and promote better outcomes for our customers.

The emerging health priority

One of the most profound and enduring facts to emerge from the pandemic is that an individual’s baseline health prior to COVID-19 infection is a key determinant of their recovery. For some this was an obvious conclusion, but for others, it was a light-bulb moment. Seeing the role baseline health plays in overall COVID-19 outcomes continues to be a key driver and motivator for people who are making healthier choices and positive changes in their everyday lives.

As an example of this, a CVS Health survey found 77% of people said they are more attuned to their health due to the pandemic. Just by experiencing the pandemic and the vulnerability, loss and uncertainty that accompanied it, people have a renewed appreciation for their health and how quickly it can be taken from them. Although COVID-19’s grip on our daily lives is finally loosening, the lessons are lasting and will be top of mind for individuals and families as they make important decisions about safeguarding their well-being.

With consumers’ renewed appreciation for their health and motivation to take proactive steps to preserve it, carriers have an opportunity to lean into the power of behavioral insurance. We can combine the protection of life insurance with technology-enabled programs that offer tools, resources, incentives, and rewards designed to help customers live longer, healthier, better lives, supporting them throughout their life and the life of the policy. In doing so, we can equip our sales partners with relevant, compelling solutions that meet consumers where they are at this moment, potentially making a real, tangible difference.

There is much to be gained — for everyone involved — if our industry collectively steps up to the plate. The more carriers who not only offer financial protection, but also support customers’ daily physical and mental well-being, the greater impact we can have. Together, we can support a healthier customer base which can potentially lead to healthier future generations. When our customers live longer, healthier lives, it’s good for them, for their families, for their employers, and it’s good for our industry.

By embracing the most customer-centric technology, we can continue to modernize how we do business while offering a more engaging user experience. Moreover, we can empower our distribution partners to start meaningful conversations by making the connection between health and wealth and explaining the value a life insurance policy can potentially deliver throughout a customer’s lifetime.

An age-old guardian of wealth

This industry has long occupied the important role of paying claims that can transform the lives of individuals, families and even generations. This is work to be proud of, and work that is still very much in demand. Recent stock market performance notwithstanding, the record-setting bull run that spanned nearly the last decade and a half created tremendous wealth — wealth that must be protected. Life insurance can offer that protection. For the industry, this is another opportunity and another reason why what we have to offer is especially relevant.

But it’s not only people who have acquired significant wealth who seek the security of owning a life insurance policy. Market volatility and inflationary pressures, which may seem to have an initial dampening effect, further fan those same feelings of vulnerability. What you have today, whether it’s your health or your savings account, could be threatened tomorrow. Adding to that vulnerability, 60 million American households are uninsured or underinsured, according to LIMRA. The coverage gap is not new, but the call to close it is growing more urgent. We can and should be doing more to help get more families the valuable life insurance coverage they need.

One of the ways we can achieve this is through continuing digital adoption and advancement. The pandemic years compelled us to accelerate many of the industry trends that were already underway, thereby creating faster and far more streamlined underwriting and buying processes. That translates into a quicker and less invasive way to get a policy and makes life insurance more accessible to more people.

Golden opportunity

Life insurance is ideally suited for these times. What’s important is that we’re able to articulate the reasons why. Consumers today need to know that life insurance can do more than protect loved ones when they are gone. Life insurance can support their long-term financial goals and their long-term health. The industry is primed to move past its age-old passive model where policies are sold and then sit until they’re serviced. It is ready to move toward one that embraces the big picture, prioritizes taking a shared-value approach, keeps innovation top of mind to serve consumers in a more engaging and meaningful way, and offers benefits for healthy behaviors.

Encouragingly, the industry has already taken advantage of some of these opportunities. Now we must go further. We are at a crucial moment — one that calls for building new and sustainable business relationships, aligned with the future of our industry, while continuing to provide the peace of mind our customers deserve. If we rise to meet this moment, bringing valuable coverage to more Americans to reduce their vulnerabilities, our industry is poised to drive meaningful change and create a new inflection point in our own history. A point that will rightly be remembered as a golden age for life insurance.

Brooks Tingle is president and CEO of John Hancock Insurance. He may be contacted at [email protected].