Looking Forward to a Bright 2025

Increased customer awareness and digital transformation drive a positive outlook for the term life insurance industry.

Term life insurance industry in the short term

In many ways, the future of the term life insurance industry looks bright. According to the LIMRA and Life Happens study, the percentage of Americans with life insurance coverage has hovered around 50% for the last three years.¹ And that’s not even close to the numbers from  a dozen years ago, when 63% of Americans owned life insurance.²

A record high 37% of consumers have indicated their intention to buy life insurance within a year.³ But there are barriers that stop them from making the final decision. We sat with Farron Blanc, Legal & General America (LGA) Vice President, Brokerage Distribution & Strategy to discuss those barriers and how to successfully overcome them in order to keep growing the industry.

Affordability and cost uncertainty

If you asked everyday Americans who do not have term life insurance how much it costs, nearly three-quarters of them would overestimate it. How much does it cost, how much coverage do I need, how long should my terms be — these are extremely common concerns without a one-size-fits-all answer. While term life insurance is affordable and flexible, needs may change over time.

In order to adjust to changing needs, our offerings need to be flexible. “Our Term-2-Term exchange program enables advisors to see if their clients’ life situations have changed after the first 48 months, potentially better served with different coverage durations,” explains Blanc. “Without any additional underwriting, or even a medical exam, we can adjust coverage to better suit the needs of your clients,” continues Blanc.

Whether individuals have changing health, new financial dependents, improved financial situations or a career change, convertible life insurance offers flexibility in coverage and premium costs, and might better meet the needs of clients who first signed up for term life insurance coverage.

Insurability concerns Other barriers to term life insurance are “existing conditions” and other health factors people assume will make them uninsurable. Diabetes, heart conditions, cancer history and mental health issues are common health-related factors that contribute to an applicant’s impaired risk. Sometimes smoking, alcohol consumption, substance abuse and other lifestyle choices can contribute to impaired risk, as well as occupational risks.

“We believe in providing affordable coverage for all Americans,” states Blanc. “Through digitization and updating our underwriting process, we have freed up more human hours, which we focus on table-rated applicants,” notes Blanc. “By dedicating more of our time and energy to clients who really need the coverage, we’re going to continue serving more and more impaired risk clients.”

Cumbersome process

Historically, life insurance carriers have fallen behind most other industries in terms of adopting digital solutions to streamline everyday and repetitive tasks. Whether it’s the familiarity with paper applications, or the peace of mind that comes with a tangible piece of paper, certain markets have been slow to adopt accelerated processes.

Because of the way applications are written and beneficiaries assigned for trust-owned life insurance, or business-owned policies, term life insurance issued for employees, owners or key members of an organization are still throttled by paper applications and full underwriting.

“With renewed focus on protection and all the enhancements to our digital platform,” says Blanc, “we’ve been able to dramatically improve our business and trust-owned life insurance value proposition.” Now, financial security and tax-advantaged benefits are available more quickly and easily to businesses than ever before — and  it’s only getting better.

Focused on the future

The life insurance industry is poised for a bright future, with more Americans expecting to invest in coverage in the coming year and years. Innovation, increased customer awareness and advancements in digital solutions are positioning term life insurance carriers to grow and evolve. With a renewed focus on customer-centric approaches and digital transformation, LGA is well-equipped to provide robust financial protection and peace of mind for generations to come.

¹2022-2024 Insurance Barometer Study, LIMRA and Life Happens, ² 2023 Insurance Barometer Study, LIMRA and Life Happens, ³ 2024 Insurance Barometer Study, LIMRA and Life Happens Legal & General America life insurance and retirement products are underwritten and issued by Banner Life Insurance Company, Urbana, MD, and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states and in DC. William Penn products are available exclusively in New York; Banner Life is not authorized as an insurer and does not do business in New York. The Legal & General America companies are part of the worldwide Legal & General Group. CN10302024-2