Life Cover: New Thinking & Flexible Products Are The Way Ahead

Life insurance has been a little bit of a forgotten sector when it comes to tech transformation. It’s been a slow process and many big name insurers still sell Life cover on the fear factor. Just look at the Legal & General TV ad where a single dad is left to bring up two young children alone following the death of the mother for example. It’s essentially the same message as the Man From The Pru used 50 years ago, walking the streets of Britain offering weekly cash plans to cover sudden death.

But the fact is that the traditional nuclear family is in rapid decline in the UK. Many people are already single parents struggling to bring up children alone and many households contain just one adult – 25% on average according to UK government stats, with some regions in Scotland and NE England seeing 33% of households containing just one person. So adverts showing a typical suburban family lifestyle from 25 years ago won’t really reach that audience emotionally. That’s one reason why so few people in the UK bother with Life insurance; they don’t see themselves being represented in advertising.

So we need change, we need a rethink. IE took a look at the future of Life insurance, how the industry develops new products and how we market those policies. Let’s get into it.

FLEXIBLE COVER, BECAUSE LIFE CHANGES

Here’s the Bequest take on how Life cover can evolve and change as people go through life;

“Bequest Life Insurance is rejecting the traditional ‘sell and forget’ life insurance cover that we’ve come to know for the last 150+ years. This type of policy means people tend to forget how much they’re covered for or even who they’re covered with. And in some cases, if one partner has set it all up, the other partner might not even know the details of their policy.

This becomes a problem when people pass away suddenly, and when people’s lives change. Whether that be with purchasing a home and taking on a mortgage, having kids, getting married, or even getting a job promotion. All of these big life changes make a difference in the type of coverage and how much people should be covered for.

With flexible, customisable policies, people tend to look at them more often, which helps them stay on top of the details and have conversations more often. They also can see how life isn’t static, and how their cover should be able to change with them. When you get a mortgage, it’s easy to update your amount of cover to cover your mortgage, or when you have a child, you can increase your amount so they are taken care of should the worst happen. At Bequest, we believe that having flexible policies allows for our customers to have life cover that is ultimately suitable for them and their individual needs. Life changes, and so should your life insurance.”

A DIFFERENT MEDIA APPROACH – LET’S HAVE THE CONVERSATION

Dead Happy is a brand which taps into the social media obsession with The Legacy. Lots of people like the idea that their lives made a positive difference, had meaning, and that something good was left behind. The interesting twist on Life cover payouts is the Dead Happy Death Wish, which is in effect a mini Will. You can leave a sum for your friends to enjoy a holiday, or some of your assets can go to an animal rescue sanctuary. It doesn’t have to be a policy where one beneficiary, usually a relative, cops for the lot.

The point is, this is your Wish, it places power in the hands of the policyholder, which is something traditional Life policies don’t do.

Dead Happy also agreed a media for equity deal with Channel 4 Ventures in 2021, which doubled the current media spend, increasing the reach of DeadHappy’s major new TV campaign kicking off in Q1, 2021. That shows lateral thinking and IE reckons that is exactly the approach that Life insurers need to get these difficult conversations started.

Phil Zeidler, Co-founder of DeadHappy, said:

“We’ve redesigned life insurance with a customer first approach, giving them access to choose what they want, not what the industry thinks they need. We are blown away with the response and are now focusing on scaling the business. We are incredibly excited about bringing our new digital life insurance concept to a much wider audience.”

“Our customers and followers have gone nuts for Mick and Tel! They allow us to talk about life and death in a way not seen before – poignant and (hopefully) very funny. You will definitely be seeing more of those two characters and their friends.

LIFE CAN BE BOLTED ONTO HEALTHCARE PLANS

The Covid pandemic and various UK governments reactions to it, has affected the ability of the NHS to actually treat patients, of that there is no doubt. While politicians argue over GP access, ever longer waiting lists and the tragic deaths of those who fail to see a consultant, insurance brands can develop products that offer Life cover as an extra, an added value feature, to a private healthcare scheme. Because right now, demand for private medical care is rocketing.

For example, data from Quotezone.co.uk shows that demand for private health insurance policies surged by 46% in the first eight months of 2021 compared to the same period in 2019, the year before the pandemic began. Interestingly, despite coronavirus having a bigger health impact on males, the research revealed that more women sought out private health insurance than men. That provides an opportunity for insurance brands who can successfully market to women.

In the employer healthcare sector, companies like YuLife have realised that by making Life cover an integral part of the company healthcare plan, you can offer something beneficial to both employee and employer. The person working for the company sees the YuLife package as something which has a real social value, a kind of emergency back-up if you like. In an added twist, YuLife’s app usese gamification to encourage healthier lifestyles amongst the workforce, so over time, both YuLife and the employer can see trends emerge in terms of mental health wellbeing, activities, diet changes etc.

That same data on lifestyle can be collated by insurers too – via apps and wearable tech – and help build new actuarial tables that truly assess risk, in a much more granular way than previous tables based around smoking and postcode stats. In short, there is more to longevity that crude, raw data on age, weight, smoking and traditional factors and technology offers insurers the chance to join the dots using layered data.

CHANGE HAS GOT TO COME

Sproutt in the USA offered IE these thoughts on why Life insurance needs to change and fast;

“Life insurance has been stagnant for decades. Its outdated modes of operation have led to consumers viewing it with an apathetic eye:  even after purchasing, some don’t view life insurance as a significant value add to their lives. In fact, a recent poll showed 17% of Americans either don’t think that their life insurance policies are worth what they are paying or simply don’t know – indicative of the disassociation between policy holder and policy.

This acceptance of life insurance as inaccessible and incomprehensible has hindered innovation in the space, leading to clunky and outdated processes that have created a rift between insurance companies and their customers. The introduction of data analytics and AI have the potential to streamline these otherwise tedious processes and increase personalization to benefit both customers and insurers.

Insurers that embrace personalization can help trigger a paradigm shift away from an industry that has until now used outdated parameters to determine the policy pairings. By considering individuals’ behaviors, insurance companies more accurately determine risk and customers are held accountable for their actions. For the first time in history, we are truly able to understand the patterns and behaviours in each individual’s unique life. When the data being generated by insurance customers is analyzed, it can be used to power AI applications (a field that the McKinsey Insurtech Trends Index classified as being both technically mature and highly applicable in the insurance industry) for insurers. This will lead to even more effective analysis and policy personalization – ultimately improving customer health, reducing risk and increasing the insurers’ bottom line.”

CONCLUSION 

In an era of high demand for private healthcare plans, insurers and brokers alike have a huge opportunity in terms of offering Life cover as part of their healthcare plan. By making it easy for consumers to add children to the plan as they arrive, or fine tune the beneficiary details as their personal lives change, via apps and chatbots online, they are far more likely to develop lifetime relationships with policyholders – and that can only be a force for good.

 

 

About alastair walker 7798 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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