Why the Life Insurance Industry Must Change

The Golden Age of life insurance came and went 70 years ago.

Relatively little has changed in the industry since then, and, as a result, life insurance ownership has decreased gradually, decade after decade, since the 1960s.

The experiences of the modern American family have transformed drastically, and our expectations for financial tools have certainly evolved in tandem.

Our desire for financial security, however, will always be a top priority.

A Market Shift

Consider the average policyholder in the 1950s; they likely lived through the Great Depression and were adults through World War II.

They’d seen their fair share of turmoil, and with budding families and careers in the post-war years, had a great need for long-term financial stability.

Now, consider the average consumer in 2023. Gen Xers and millennials make up nearly 70% of the workforce.

They’ve experienced their fair share of social, cultural, and economic turmoil in the last two decades alone.

They, too, have financial anxieties around their growing families — and their aging parents.

Increasingly, members of this “sandwich generation” have found themselves not only raising their children but tending to the health and financial needs of their parents as well.

They are concerned that there may not be enough in their 401(k) accounts or from Social Security to safely retire and that their children will inherit the same burden of responsibilities they currently carry.

The need for insurance products has never been greater.

But the industry has been slow to adapt in tandem with consumer needs and preferences.

The Digital Reinvention of an Analog Industry

Today, we shop from our devices.

We order dinner from apps and stream our favorite shows and movies directly to our living rooms.

We can bank from our phones right after we end a virtual visit with a doctor.

Every consumer-facing business has transformed to embrace the needs of modern consumers; services have been redesigned to be convenient, accessible, and engaging.

The consumer is in control in most industries, as digital automation and the internet have given people the ability to rate, rank, and research various offerings on demand.

In some areas of the life and annuity markets, tech lethargy is starting to break.

According to a recent MIB report, universal life insurance applications were up 7.5% in  2023 compared to the year prior.

In the category for applicants ages 31 through 50 — prime sandwich generation ages — the application count jumped 10.7% from the application count recorded in the previous month.

These increases are not only an indication that younger populations are flocking to new policies, but a sign that the stodgy ways of the past are beginning to give way to the digital-first preferences of modern consumers.

But when it comes to many insurance products, the most consumers can expect from their insurer is a link to download a PDF.