For the past three years, I have been preaching the message of life insurance and closing the mortality protection gap in our industry through my publications and presentations. The truth of the matter, however, is that I only had group life cover through Swiss Re with no additional individual coverage. I know this is the story of many others, especially the millennial generation. The fact is, a number of studies have shown that group life coverage is usually not adequate when a comprehensive needs
analysis is completed.
It was time for me to live the talk, be more responsible, and prove that I believe in what I've been propagating. One of things that had held me back was the stories about the hassle of the buying process, taking close to a month to complete. I wanted a more consumer friendly experience, a frictionless process (no medical exam), yet a good price.
Being an actuary and an insurance professional, I knew that an accelerated underwriting program (fluidless underwriting) could get me the characteristics I wanted. Luckily for me, from working with clients, I knew most of the companies that have fluidless programs and knew what to do. I made my choice of the carrier I wanted after reviewing various accelerated underwriting programs and began the buying process on a Friday afternoon at 3pm ET. I called a sales agent of the company, and in less than 20 mins, we had completed the application, and I was sent the electronic document for my e-signature.
The agent went on to explain that there is a predictive algorithm behind the scenes that was going to determine if I would get an instant policy issue and have all medical exams waived (what we call a triage process). Since it was late on Friday, he said there was a chance that it might take until Monday morning to complete the process. I
smiled on the phone, knowing I was being run through one of the credit based models (a predictive model I've had countless discussions on with my clients).
We ended the call, and lo and behold, on Monday morning I had a call from my agent delivering the good news that my policy has been issued, and I didn't need any exam or lab work. It literally took less than 1 working day for the process to be complete and for the policy to be issued. This is what I call the 24-hour experience. I believe this is what today's digital consumers are looking for. I was very impressed and fortunate to experience firsthand how accelerated underwriting programs work in practice, completely hassle free. All it took was to answer a number of questions, including medical questions on the phone, a model run behind the scenes, and BOOM... I walked away with a life insurance cover at a relatively competitive rate (NOT a simplified issue product).
I know, however, that this is not the norm by any means, and only the beginning of gradual steps we as an industry are taking to address the consumer pain points, using data and analytics. My colleagues, Steve and Shelly both had completely different experiences, having to take medical exams. The story of Steve was even more interesting, defying all the norms, having to wait for 111 days until he got his policy active.
We clearly still have a long way to go as an industry, but the good news is we're making noticeable progress with each step along the way. The hope with all this progress is to get more people insured with an efficient and pleasant buying experience, similar to how people shop and buy items from other industries.
In the end, these are the things I learned from my life insurance purchasing journey:
1. The industry is making real progress with accelerated underwriting programs, and the hope is that this efficient and convenient process will encourage more people to be insured to help contribute to closing the mortality protection gap.
2. My experience tells me that YES WE CAN address the long wait times of the underwriting process, with the help of new data sources and analytics capabilities springing forth in the industry. It's only going to get better from here.
How Can We Close The Gap?
A lot has been said about how this 'wicked problem' (that is, the mortality protection gap, which currently sits at $25 trillion) can be addressed, but from my perspective,
I think it boils down to the simple basics, which include:
1. Education, education, education - Doing a better job as an industry to educate the general public, and the people who need it most. Today there's misperceptions about the cost of life insurance, with most people thinking it's way more expensive than it actually is. It's important to tell the younger generation especially that every year they wait, they're increasing their potential premium rates.
2. Our marketing – Life insurance should be marketed as more than just for the death benefit. After all, what's beneficial about death? Life insurance can be used as a financial planning tool to meet consumers with different needs. So to my fellow millennials, you can still get a life insurance product even if you don't have dependents YET.
3. Our stories – We need to tell more stories that illustrate the value of life insurance. There are a few good examples out there we can reference. Social media is also here to help spread the word.
As we wrap up life insurance awareness month, it's my hope that we graduate FROM only thinking of, and promoting the need for life insurance in the month of September TO an everyday campaign.
YES WE CAN!!!
Category: Funding longer lives: Health/medicine, Other