I’ve had motherhood on the brain a lot lately, and how could I not? My Facebook feed is a 24/7 slideshow of other people’s kids. I live in the suburbs, where an inability to speak Gerber makes you a social pariah. And, in case you missed it, the biggest news event last month involved a baby named George.
And then there was this week’s issue of TIME magazine, with a cover story on living the child-free life. It seems, despite the constant flow of kid pics on social media, more couples are choosing not to procreate these days. While only 1 in 10 women between the ages of 40 and 44 were childless in 1976, 1 in 5 were in 2010. It’s a trend that will obviously have both social and economic impacts, and it made me wonder: if the no-kid thing grows, what would it mean for life insurance?
Most industry experts argue that a rise in child-free households doesn’t bode well for the life insurance business, and there's evidence to support them. After all, in the most basic sense, life insurance needs grow as the number of lives grows. Fewer people need fewer policies.
It doesn’t help, either, that the industry has long relied on childbirth as a key driver for life insurance purchases. If adults don’t speak with an agent about their life insurance needs until they have a kid, what happens if they never have a kid?
What’s more, the trend is amplified among the affluent, the market most desired by the bulk of life agents. Among women with high incomes, 1 in 8 expect to remain childless. Among women with low incomes, only 1 in 20 say the same.
Yet, as long as producers are willing to adjust, I think the trend also presents a lot of opportunities the gloom-and-doomers aren’t noticing.
Childbirth no longer offers a foot in the door for agents? Find another event. Most people need life insurance long before they start having children anyway.
Affluent clients with no kids don’t need as much life insurance? Maybe now’s a good time to start selling to the large, underinsured and often-neglected middle market.
And while childless singles and couples won’t need as much life insurance, that doesn’t mean other insurance products will lose their importance. In fact, when you don’t have the option of moving in with your adult children as a senior, something like long-term care insurance probably seems a lot more valuable.
Maybe best of all? When you consider that the average child costs $234,900 before the age of 18 (and the price tag jumps to $390,000 for households earning more than $100,000), childless clients might be better able to actually afford premiums.
So … bring on the birth control?
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