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Life Health > Life Insurance

Closing the life insurance coverage gap

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By historical standards, life insurance is currently as affordable as it’s ever been, yet Genworth recently found that many Americans remain underinsured. For the second year in a row, Genworth’s 2012 LifeJacket Study uncovered a significant gap between the amount of life insurance most Americans have and the amount they actually need. The study also revealed that adults actually have less life insurance coverage than they did in the previous year.

As financial professionals, we are charged with having a deeper understanding of our clients, asking new, more insightful questions and breaking down the barriers that keep families from being adequately covered. At Genworth, we aim to educate clients so they fully understand the need for sufficient coverage and how it fits into their overall financial plans.

Here are a few insights from the study:

Focus on small changes

The 2012 LifeJacket Study found that if consumers make even small changes, they can expand their life insurance budgets. Bringing a lunch to work once a week or cutting back on the purchase of coffee three times a month can save clients enough money to bridge their coverage gap and adequately meet their life insurance needs. If a financial professional shares these monetary comparisons, he or she can help connect the dots for a consumer.

Introduce helpful online tools

We continue finding that consumers are highly receptive to online tools that help them understand their specific needs. Pointing clients toward Genworth’s interactive online budget calculator helps demonstrate how clients can make small changes, as discussed above, that can easily add up to help them meet their needs.

In addition, life insurance calculators help financial professionals provide a more detailed assessment of a client’s individual requirements, making the life insurance purchasing process more personal. In bulletin board focus groups conducted as part of the LifeJacket Conversations Research in May 2011, 88% of respondents said using online consumer calculators would be helpful during the buying process.

Identify new markets

The 2012 LifeJacket Study suggests the life insurance coverage gap tends to be substantially narrower for the college educated. The findings show that 60% of adults with a high school diploma or less are uninsured, while only 44% of college-educated adults are without coverage. Additionally, insured adults who attended or graduated college have 2.5 times more life insurance coverage than non-college educated adults. Our industry can and must do a better job of serving not only this market but also the entire uninsured market to help them reach their financial goals.

As financial professionals, we have a responsibility to guide our clients to a more secure financial future by identifying these coverage gaps and presenting practical solutions. The deeper our understanding of clients’ wants and needs, the better prepared we are to help them decide how to best protect what is most important to them — their futures and their families.

I hope that you found the information in this article of interest and that it may lead to an idea or action that supports your business.

For more from Anthony Vossenberg, see:

How the RIFT Principle Could Boost Your Life Sales

Staying On Top of Product Offerings in a Changing Marketplace

Best Practices: Understanding What Your Client Wants


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