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Life insurance can be complicated. The underwriting process can be invasive. The jargon can be confusing. And many people don’t discuss the subject with family or friends.
This often makes life insurance products difficult to understand for some consumers. And when consumers don’t have the life insurance protection they need, the results can greatly affect their family’s financial future. Our challenge is to make life insurance more understandable and accessible for the next generation of life insurance customers.
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The innovation needed to drive that change is, at long last, taking root. The product, process, and benefit changes beginning to take place in the industry could transform the way tomorrow’s customer views our products and services. We have an obligation to ensure life insurance is no longer confusing to so many people who absolutely need the protection it provides.
Here are 5 trends to keep an eye on as the industry rises to meet the challenges of the future:
Trend #1: Underwriting will be smoother. The most important change to the customer purchase experience in decades is arriving now. New data sources are providing life insurance carriers with the information they need to streamline the underwriting process.
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These new underwriting approaches will quickly evolve. Many consumers will be able to protect their families without having to complete a medical exam. Agents and carriers need to share the message about this new approach to reverse the decline in individual ownership of life insurance.
Trend #2: Innovative new products will be introduced. Increasing life expectancies will positively impact future policy designs. Tomorrow’s products may not exist today, or they may be something we are familiar with bundled in a new package. Hybrid products will continue to proliferate.
It’s possible life insurance will be incorporated as a feature of other products. New features and benefits that can meet the unarticulated needs of millennial consumers will emerge.
In fact, we are already beginning to see creative new riders hitting the market. The next few years promise to be fascinating, as new product development continues unabated.
Related: Innovative thinking vs. innovation: key differences uncovered
The industry will need to master social media platforms, with the understanding that most content will be read on a mobile device. (Photo: Thinkstock)
Trend #3: Jargon will be reduced. Agents, carriers, and regulators need to understand the misunderstanding caused by use of terminology that confuses everybody outside of the industry. If we hope to truly connect with tomorrow’s customer, our communication must improve.
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Life insurance jargon is a self-inflicted wound, and it will continue to hold us back until we have the courage to use language people can actually understand. The concerted effort companies have been making to reduce jargon is beginning to have a positive impact.
Trend #4: Social media will become even more important. Work to define the most effective way to reach millennials is well underway. A reboot of our traditional communication strategies will be essential to connecting with them.
We will need to master the use of social media platforms, with the understanding that most of our content will be read on a mobile device. Millennials are beginning to have families and purchase homes, so they will certainly need the protection life insurance affords. We need agent and carrier marketing efforts to resonate with this group so they can be moved to action.
Trend #5: Public perception of the life insurance industry, and the professionals who work in it, will get a makeover. The life insurance industry fulfills a societal good that will always be needed. Providing products that protect families when the worst happens is an honorable profession.
The coming changes will improve our collective image by making our products easier to understand and purchase. The work we do is noble. Our future is bright. We can all be proud to work in this wonderful profession.
W. Lincoln DeMier is life product strategy and performance manager at American Family Insurance. Read his full bio here.
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