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Samantha Chow. Credit: Capgemini

Life Health > Life Insurance

Life Insurers Face a Young Consumer Awareness Gap: Capgemini

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Baby boomers and members of earlier generations will soon begin to die in large numbers, leaving houses, cash and life insurance death benefits to their heirs.

Samantha Chow, the global life, health and annuity sector leader at Capgemini, believes that marketing problems will make it hard for life and annuity issuers to capture much of that asset flow.

Life insurers let marketing slide during the 2010s, when low interest rates made providing attractive products at attractive prices difficult.

Now, “the pendulum is not swinging in the right direction,” Chow said.

Some people younger than 50 may know that they can use cash-value life insurance to save for college or achieve other long-term planning goals, but, for the most part, “the younger generation has no clue.”

What it means: If Chow is right, life and annuity annuity issuers may have to struggle to attract the same share of newly invested assets that they’re attracting today.

For financial professionals, that might lead to a shrinking number of life and annuity providers but more respect from the insurers that are still out there.

The great wealth transfer: Cerulli Associates analysts predicted in 2022 that the dying members of the Greatest Generation, Silent Generation and baby boom generation would pass $73 trillion in assets on to heirs by 2045.

Chow believes that the great wealth transfer will happen.

She thinks that Americans born before 1965 really will transfer a large amount of cash to heirs over the next 20 years.

Most of the recipients will be at least 50, and most will be trying to prepare for their own retirement, Chow said.

The assets transferred “typically will go to the bank,” Chow said.

The knowledge gap: September is Life Insurance Awareness Month. Life insurers, life insurance distributors and trade groups use the awareness month campaign to increase awareness of and interest in the idea of using life insurance to protect against the risk of death.

The industry also tries to promote using cash-value life insurance to save for long-term planning needs.

Chow, who has been involved in insurance industry analysis since 1997, was an executive at New York Life from 2007 through 2015. While she was there she promoted Life Insurance Awareness Month.

She has been a Life Happens evangelist since 2020, and she has made a point of trying to explain what happens to children’s ability to go to college when their parents die without having adequate life insurance.

She believes that life insurers are still eager to sell life insurance, in spite of the losses they absorbed during the COVID-19 pandemic.

“I think they’re trying to figure out how to be more relevant,” she said.

But she sees no signs that young consumers’ level of awareness of life insurance is leveling off, let alone starting to creep back up.

“I think it’s going to continue to go down,” she said.

One reason, she said, is that typical life insurance ads are boring and are aimed at older consumers.

Chow has a hard time naming a category of financial services provider that’s doing much better.

Consumers may be more familiar with banks, but few young consumers spend much time in bank branches these days, Chow said.

Young people are familiar with cryptocurrency, but Chow has a 20-year-old son, and she finds that what her son has heard about crypto has not impressed him.

He did once come to her to tell her about a life insurance policy he’d discovered: a term life policy that paid the premiums back to the policyholder after the policyholder had paid premiums for a set number of years.

“I would love to see more of that,” Chow said.


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