Experts Anticipate The Need For Life Insurance in 2024

Experts Anticipate The Need For Life Insurance in 2024: What you should no about Life Insurance in 2024

As 2023 comes to a conclusion, advisers and agents are analyzing the patterns that have affected the life insurance market over the last several months and planning for 2024 and beyond. John Carroll, SVP and head of life and annuities at LIMRA, and Brian Haney, founder and CEO of The Haney Company, discussed industry trends, what’s expected in 2024 and 2025, and what advisers may do to capitalize on these developments.

Growth in Life Insurance Premiums

Carroll stated that a new sales record was reached in 2022 with a 1% rise in the overall life insurance premium. The overall life insurance premium through the third quarter of this year is equal to the sales during the first three quarters of 2022. According to LIMRA’s prediction, the overall premium for individual life insurance might rise by up to 5% in 2024 and 2025. Carroll clarified that things should stabilize in 2024. In addition, the economy is predicted to do well despite some consumer anxiety brought on by inflation and persistent worries about the state of the economy. No significant regulatory challenges seem to be in the works.

Carroll told Taskfluence correspondent that there has also been a noticeable shift toward digital involvement, particularly among younger customers. 81% of Gen Z and 75% of millennials, according to LIMRA study, use social media to debate, get advise on, and learn about financial subjects.

Insurtech companies will also continue to expand in 2024 as the insurance business works to improve the efficiency of its procedures. Carroll noted that because technology is necessary for the industry, its use would not decrease. The financial services sector was compelled by Covid to make technological investments, and this trend toward more technology use will only accelerate.

Carroll also noted that social media prospecting has increased and will continue to increase. For instance, a lot of advisers and agents use LinkedIn to recruit. He stressed that although there has been a significant movement toward the use of technology, human connection is still vital. Successful ones will have both a strong physical connection and an online presence.

Life Insurance in 2024 Taking care of the coverage gap

Carroll brought attention to the disparity in life insurance coverage among American customers, despite optimistic projections for rise in life insurance premiums in 2024 and 2025. Both consumers and insurers will continue to have concerns about this need gap.

Only 52% of American individuals report having life insurance, either individually, through a group, or both, despite the fact that many consumers recognize the benefits of having life insurance. However, 41% of American consumers claim to require more or life insurance altogether. This amounts to about 100 million adult individuals. Thus, he concluded, “life insurance is necessary.”

Carroll stated that in order to meet this demand and bridge the gap, agents must be aware of the reality that individuals are dealing with. The issue is that a large number of them have no idea how to obtain insurance or what kind to get. He responded, “You have to figure out how to get through to these folks.” “Purchasing life insurance is a difficult procedure. Thus, assist them in realizing what they need and how to fill that need”

As agents and advisors work with their clients and prospects to reach more people and close the coverage gap, Carroll said that they need to:

Have a plan.
Come forward as trustworthy.
Demonstrate that they have experience.
Take a holistic approach. “Regularly ask your clients what their needs are because their needs will change over time,” he said.
Realize that selling life insurance is not a “one-and-done process.”

Additional trends influencing the sector

In his observations, Haney mentioned how the financial services sector uses artificial intelligence (AI) and technology to make better decisions and results for everyone. In actuality, he said, computers can significantly improve the whole life insurance market experience for both providers and customers.

Whether it’s cutting underwriting costs, increasing profit margins on current risk blocks, or creating an easier-to-use interface for producers and customers, there are numerous ways to create a better insurance market where more Americans can obtain policies and we can close the underinsurance gap in our nation, according to Haney.

“In my opinion, this ought to be a primary industrial need. “Should I consider adopting AI/digital tools or not?” cannot be the question. Which tools are most pertinent to my infrastructure, can offer the greatest value, lessen friction, enhance procedures, and ultimately result in better policy experiences? This is the question that has to be asked. He stated.

Another trend that Haney mentioned is better choice architecture. At the insurance company and practitioner levels, technology and a persistent focus on doing more for more people should ideally continue to promote strategic talks and develop collaboration on how the sector can give improved value throughout “main street America.”

“We are becoming a “majority minority Nation,” and this profound shift in our demographics should spur thoughtful planning discussions on how we engage more effectively,” according to Haney. “There has to be a fresh focus on how we communicate insurance, especially life insurance, since not all audiences see or experience it in the same way.”

In addition to enabling practitioners to engage more effectively with minorities and markets that have not been as well-served or targeted historically, the industry should benefit from understanding how to serve a more diverse marketplace. This is according to Haney.

“The diversity of stakeholders requires corporate leaders to develop inclusive practices both internally and externally.” Asking “Who’s not buying our stuff that should be, and what can we do about that?” may be as easy as that, he suggested.

The insurance and financial industries are at a turning point in history, and agents and professionals need to understand this. They should ask themselves, “How will we remain relevant to a consumer population that has grown increasingly wary of working with agents and advisors and has more tools now than ever to buy financial products and services online and without the help of a professional?” Haney enquired.

“Will we adopt drastic shifts in the way we interact with customers, adjust to a more varied market that speaks in ways that may be unfamiliar to us, and adapt our procedures to satisfy the expanding demands of clients while working to reframe the perception that seeking professional assistance with money matters and necessitates consulting an expert?”

According to Haney, practitioners need to take a position, improve their digital platform communication skills, and realize that thought leadership and shifting narratives are more important than lead generation in marketing and company growth.