Despite technological advancements like automated underwriting and attractive user experience (UX) platforms, life insurance products, especially term products, are still perceived as commodities by agents and luxuries by consumers, particularly during inflationary times. To overcome these variables, more effectively reach the mass market and make the sales and purchase of life insurance more compelling, life insurers should add complementary products that enhance the overall value proposition to agents and consumers. One smart choice is bundling life insurance with online estate planning. Let’s explore how life insurers can benefit from this strategy, backed by statistics on the current state of Americans’ life insurance and estate planning coverage.
The Current State of Life Insurance and Estate Planning
Consumers in 2024 face a dual “protection” challenge: many lack sufficient life insurance coverage, and a significant percentage don’t have an up-to-date will.
- According to LIMRA’s 2023 Insurance Barometer Study, 100 million Americans are uninsured or underinsured.
- On the estate planning front, Caring.com’s 2024 study shows that only 32% of Americans have an estate plan, a 6% decline from 2023. The numbers are even worse for black and hispanic households.
These statistics highlight a critical gap in both life insurance coverage and estate planning. By addressing these gaps simultaneously, life insurers can offer a more comprehensive solution that meets the needs of their target audiences.
The Case for Incorporating an Online Estate Planning Suite
Online estate planning suites are an innovative solution that simplifies the process of creating and managing a will and other affiliated documents like an advance health directive and financial power of attorney (POA). They offer several benefits that make them an attractive complement to life insurance products:
- Accessibility and Convenience: Online wills can be created and updated online, making the process more accessible and convenient for consumers. This ease of use is appealing to consumers of all ages, but especially for tech-savvy demographics who may be less inclined to engage in traditional estate planning and might shy away from paper-based life insurance applications. Since many life insurers have transitioned to digital sales platforms, this makes an online wills suite a nice complement to the modern life insurance UX.
- Cost-Effectiveness: Online wills are often more affordable than traditional wills, reducing the financial barrier to creating an estate plan. This cost-effectiveness aligns well with the value proposition of term and lower face amount permanent life insurance products.
- Comprehensive Planning: By bundling online wills with life insurance, insurers can offer a more holistic approach to financial and estate planning. This comprehensive solution addresses both the immediate need for life insurance coverage and the long-term need for estate planning.
Strategies for Integrating Online Wills with Life Insurance
To successfully integrate online wills with life insurance products, insurers should consider the following strategies:
- Partnerships with Online Will Providers: Forming strategic partnerships with established online will providers can streamline the integration process and ensure that insurers offer a high-quality product. These partnerships can also provide insurers with access to the latest technology and best practices in online estate planning and some providers, like LifeLegacy, white-label the experience to match your company’s branding.
- Education and Awareness Campaigns: Educating consumers about the importance of both life insurance and estate planning is crucial. Insurers can leverage marketing campaigns, webinars, and informational resources to highlight the benefits of having both a life insurance policy and an up-to-date will. Emphasizing the peace of mind that comes from comprehensive financial and estate planning can drive consumer interest and engagement.
- Bundled Product Offerings: Creating bundled product offerings that include life insurance and online wills can enhance the overall value proposition, especially for agents. Agents are always seeking an “edge” when discussing life insurance with clients. These bundles can be marketed as complete solutions for financial security and estate planning, making them more attractive to consumers.
- Seamless User Experience: Ensuring a seamless user experience is critical to the success of bundled products. Insurers should invest in integrating online wills into their existing platforms, allowing consumers to easily purchase and manage both products through a single interface. A user-friendly experience can significantly enhance customer satisfaction and loyalty.
Benefits for Life Insurers
Integrating online wills with life insurance products offers several benefits for insurers:
- Increased Sales and Customer Retention: By offering a more comprehensive solution, insurers can attract new customers and better retain existing ones. Bundled products can create a stronger value proposition, making it easier to convert prospects into policyholders and encouraging long-term customer loyalty.
- Enhanced Brand Differentiation: In a competitive market, differentiation is key. By offering innovative solutions that address both asset protection and estate planning needs, insurers can set themselves apart from competitors. This differentiation can enhance brand perception and drive agent and consumer preference.
- Expanded Market Reach: Online wills appeal to a wide range of consumers, especially younger individuals who may not have previously considered life insurance. By tapping into this demographic, insurers can expand their market reach and capture new segments.
- Improved Customer Satisfaction: Providing a seamless, integrated solution can significantly improve in-force customer satisfaction. Satisfied customers are more likely to renew their policies, refer others, and engage with additional products and services offered by the insurer.
Final Thoughts
The life insurance industry faces significant challenges in reaching the mass market and addressing the perception of life insurance as a commodity or luxury. By adding complementary products like online wills, insurers can enhance their value proposition and offer a more comprehensive solution that meets the needs of their target audiences.
Digital wills provide accessibility, convenience, and cost-effectiveness, making them an ideal complement to life insurance products. Through strategic partnerships, education and awareness campaigns, bundled offerings, seamless user experiences, and customized solutions, life insurers can effectively integrate online wills into their portfolios. This integration can drive increased sales, enhance brand differentiation, expand market reach, and improve customer satisfaction.
As the landscape of financial and estate planning continues to evolve, embracing innovative solutions like LifeLegacy’s online estate planning suite will be essential for life insurers to remain competitive and relevant. By offering a holistic approach that addresses both life insurance coverage and estate planning, insurers can provide greater value to their customers and secure their long-term success.
To schedule an exploratory meeting to see if LifeLegacy can help you meet your business development and persistency goals, book a time with Craig Simms, LifeLegacy’s Head of Partnerships.
