People aren’t buying it anymore, and that is a scary fact. So we set out to find out why, and how we can fix it.
Here are a few very interesting statistics, as noted by Peter Orszag in his piece for Bloomberg View:
- From 1989 to 2016, the share of Americans with life insurance fell from 77% to 60%
- Declines were biggest among lower income people;
- Recently,the overall life expectancy of Americans has stagnated – declining, even, among lower income groups– making life insurance all the more important at a time when people are running away from it
So why are people no longer purchasing life insurance? No one is really sure why. Theories abound, but one cause that deserves more attention is obvious to anyone who has bought it before: it’s a horrible experience.
Jake, Founder of Everyday Life, bought life insurance recently (and funnily enough, this was his catalyst to start Everyday Life!). He went through a startup, who touted its amazing customer experience, and it was still painful. The process took over 3 months, he had to provide all sorts of information (including medical records, financial and credit history, lifestyle preferences), submit to a full medical exam, and field random questions along the way.
Meanwhile, they are other providers offered little in the way of trustworthy guidance to support decisions. No one was assisting him with the amount of coveraged he needed, what product to buy, or from whom he should be it from. There was no transparency when it came to the underwriting process, no time commitment provider, or no updates along the way.
While none of this was considered outside of the norm to the ‘traditional’ life insurance purchasing process, it couldnt be more out of step with modern consumer expectations and our “on demand” culture.
Another experience to note – the COO of a large investment firm experienced an incredibly complicated process and product recommended to him during his life insurance purchasing process. He ended up choosing the most basic product available because it was the only one he could understand, but was still left with a nagging feeling that he missed something important.
Needless to say, if a seasoned financial services executive can’t understand these products, how is the regular everyday consumer supposed to be able to make an informed decision?
In effect, a combination of an outdated customer buying experience and unnecessary product complexity, there has been a serious erosion of the industry’s value proposition to customers. On top of all of this, the need for life insurance appears to be growing, particularly among society’s most vulnerable and, as a whole, ‘everyday people’.
That’s where Everyday Life comes in. To see how we are changing the way everyday people get their life insurance coverage, you can find out more about our process here.