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How Life Insurance Agents Can Take Advantage of Underserved Markets in the Industry



Life insurance is a type of protection that helps provide financial stability for loved ones in the event of a policyholder's death. Unfortunately, many people who stand to benefit the most from life insurance may not have it. This lack of coverage can disproportionately affect certain demographics, such as certain races, age groups, and income levels. However, the COVID-19 pandemic has brought attention to the importance of having a life insurance policy for everyone.


As a result, insurers should consider creating and promoting life insurance products that address the specific needs of underserved markets. This includes identifying these markets and tailoring the products accordingly. By doing so, insurers can help ensure that more people have the coverage they need to secure their financial futures.


Income


Income is often a significant factor in the likelihood of having life insurance coverage. A study by Deloitte Insights found that the distribution of coverage was proportionate to income level, with lower-income individuals being more likely to be underserved. This may be due, in part, to the cost of coverage, which can be a significant barrier for people with lower incomes. For these individuals, the cost of life insurance may be perceived as too high relative to other financial commitments, such as paying bills or saving for the future.


In some cases, a lack of financial literacy may also contribute to the coverage gap. For example, one study found that 18% of Black individuals did not understand the purpose of life insurance. Similar gaps in understanding were seen across lower-income groups of all races. This presents an opportunity for insurers to partner with financial literacy programs that are targeted towards underserved markets. By helping these individuals understand the value of purchasing life insurance, insurers may be able to increase the uptake of coverage among these groups.


Gender


Life insurance coverage is not evenly distributed among men and women. Approximately 44% of women do not have a life insurance policy, and those who do often do not have sufficient coverage. This imbalance is particularly evident in underserved markets, such as women of color and younger women.


To help close the gender gap in life insurance coverage, it is important for insurers to align their sales strategy to appeal to female demographics. This may involve creating products or sales approaches specifically targeted towards women. It is also important for insurers to understand and address the societal gender roles that can contribute to financial outcomes for women. By doing so, insurers can help encourage more women to recognize the value of life insurance and invest in a policy to protect themselves and their loved ones.


Age

A study by Deloitte Insights examined the distribution of life insurance coverage among different age groups and found that older individuals, particularly those in the Baby Boomer generation, are more likely to have adequate coverage. This may be because this age group is aging and becoming more aware of their mortality, leading them to seek out life insurance to protect their loved ones in the event of their death. In contrast, people in the Gen X, Millennial, and Gen Z age groups are less likely to have life insurance, with approximately 44-45% lacking coverage. This may be due to a variety of factors, such as a lack of understanding about the importance of life insurance, a perception that it is too expensive, or a focus on more immediate financial concerns.


To increase the uptake of life insurance among younger demographics, insurers may want to consider investing in online marketing channels. This can help to reach younger consumers, who may be more comfortable with digital formats and may prefer to research and purchase life insurance online. In addition to using online channels to reach these audiences, insurers can also consider building experiences that cater to the needs and preferences of younger consumers.


This might include offering more flexible or customizable life insurance products that can be tailored to meet the unique needs of each individual, as well as providing information and resources in a way that is easy to understand and resonates with younger audiences. By adopting these strategies, insurers may be able to better serve the needs of younger demographics and increase the uptake of life insurance among these groups.


Race


A study by Deloitte Insights found that the distribution of life insurance coverage among different racial groups can be influenced by socioeconomic patterns. The study found that a higher percentage of Asians had life insurance coverage, with approximately 75% of this demographic being well-insured. This is likely due to a combination of factors, such as higher levels of income and education, which can make it easier for individuals to afford and understand the value of life insurance.


Whites also had relatively high levels of coverage, with about two-thirds of the population investing in life insurance. However, Blacks and Hispanics were more likely to be underserved, with nearly half of these populations lacking coverage. This could be due to a variety of reasons, such as a lack of access to affordable insurance options or a lack of understanding about the importance of life insurance.


To address these disparities and reach underserved ethnic groups or races, it is important for insurers to create a sense of inclusivity and welcome for all. By doing so, traditional barriers to coverage can be removed, making it easier for Hispanics and Blacks to access life insurance.


Additionally, insurers can use this newfound community to build financial literacy and teach these groups about the value of using life insurance as a tool for building wealth. This can include providing information and resources on the different types of life insurance available, as well as the various ways in which life insurance can be used to protect against financial risks and help individuals achieve their long-term financial goals.


Final Thoughts


Life insurance is an essential form of financial protection that can benefit people of all ages, ethnicities, and income levels. To reach new customers in underserved markets, agents can use a range of strategies that are tailored to the specific needs and characteristics of these groups.


One effective tactic is to focus on building financial literacy among underserved communities. By providing information and resources that help individuals understand the value of life insurance and how it can be used to protect against financial risks and support long-term financial goals, agents can help increase the uptake of coverage among these groups.


Another important tactic is to create a sense of inclusivity and welcome for all potential customers. By doing so, agents can help remove traditional barriers to coverage and make it easier for underserved individuals to access life insurance.


Finally, agents can consider offering scalable investment options that are tailored to the needs of underserved markets. This might include offering flexible payment plans or customizable coverage options that can be adjusted to meet the unique needs and budgets of each individual. By adopting these strategies, agents can help increase the uptake of life insurance among underserved markets and provide financial protection for a wider range of customers.


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