Life insurance ownership in general is at an all-time low and among the highly underserved and underinsured middle market it is even lower.
The Society of Actuaries, in conjunction with WZ Research + Consulting and Mathew Greenwald & Associates explored the reasons for this issue by surveying a panel of young families in order to get a firmer grip on their attitudes about life insurance so that the industry may better understand how to market to them.
What they found was that in order to develop strategies for penetrating this demographic, insurers must alter their marketing plans in myriad ways. The middle market is composed the segments listed below and each present their own call to action for insurers:
- 'Opportunistic buyers' who do not necessarily make purchased based on education about the products but rather on appealing offers. When focusing on the middle market, insurers to devote limited resources to education and invest more resources on developing appealing and affordable products.
- 'Planners' are most likely to purchase life insurance and hold the industry in the highest regard of all segments. They view life insurance as an integral component of their overall financial plan and are generally women.
- 'Protectors' operate under the assumption the life insurance is serves a temporary need and are most likely to purchase it in order to protect members of their family in the wake of a major life event.
In order to qualify for the study, respondents and their spouses needed to be between 25 and 40 years old, have a household income between $35,000 and $125,000 and have life insurance or financial dependents.
It should be noted that one of the contributing factors to the middle market being underserved and underinsured is because many producers prefer working with the affluent market in order to obtain the highest compensation.