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The summer of 2023 was flush with strong female role models and influence, from Taylor Swift and Beyonce’s record-setting tours to Barbie, the box office smash that turned the world pink. Women’s buying power was on full display. News outlets touted this economic force as if it was something completely novel.
But was it a fresh phenomenon, or did sellers finally start paying attention to an influential group of buyers in a meaningful, non-belittling way?
HERstory
Life insurance is one industry that has historically overlooked women’s buying power, as many financial industries have done. After all, women couldn’t have credit cards in their own names until the Equal Credit Opportunity Act of 1974. Today, women still lag men in owned life insurance policies 49% to 55% per LIMRA’s 2023 Insurance Barometer Study1. On the heels of the female empowered summer, advisors and carriers should consider women as the priority market and focus on targeted marketing and education to them to close the gender coverage gap.
It’s easy to hypothesize on the societal influences that caused this gap, but the stats don’t need additional editorialization to realize it can easily be closed as carriers and advisors continue to work together. Factors that typically drive life insurance purchases, including family wellbeing, health and financial stability, skew toward being valued more by female consumers. Women prioritize their families 86% of the time compared to 77% of men and put more importance on their physical and mental health2. Men also fall behind women in emphasizing their finances by eight percentage points.
Among the surprising contributors to the life insurance gap found by LIMRA’s study are single mothers, only 41% of whom own a life insurance policy. Nearly 60% also recognize that they need – or need more – life insurance, which represents a market opportunity of five million households3. Add to that the mothers in relationships who are part of the 54% without life insurance and there’s an even larger market to tap into more effectively4.
The present
Most people purchase life insurance to cover burial and final expenses and/or to create financial stability for their dependents. Those reasons are underscored further by single mothers, but even with these impetuses, barriers are still standing in the way of closing the coverage gap.
Regardless of age or gender, the most prevalent and consistent roadblock to securing a life insurance policy is the perceived cost. Through technology, medical and underwriting advances, policies these days are significantly less expensive than consumers initially think, and they often overestimate monthly premiums by three times or more of the actual amount1. By continuing to shed light on the affordability of life insurance, especially the simplicity of products like term life, advisors can showcase just how approachable and customizable policies can be for women of all income brackets.
Others who are hesitant to purchase life insurance cite needing to focus on other financial responsibilities, which is understandable; it’s always easier to focus on the bill in hand versus the future needs of dependents. Working with consumers to understand the right balance of premium and the financial benefit of a policy can help them see the big picture. The American Center for Progress conducted a study in 2017 that calculated replacing a mom, taking out her work salary, would cost $184,820 per year based on working 183 hours a week as chef, housekeeper, chauffeur and everything else moms take on during a week. Having a number instead of a conceptual “what if” can carry more weight in the purchasing decision process.
Our future
Carriers are also attuned to the barriers and grievances from advisors around the process for selling life insurance. Legal & General America (LGA) has led the way for the industry by engaging in a full digital transformation of consumer-facing and back-end processes to ease those frequently cited burdens. With LGA’s online application process, more than 75% of potential policyholders can apply without invasive labs or extra exams and about 36% of applicants even receive an instant decision. According to a recent study from the Pew Research Center, there’s even a gender gap in “me time.” Men spend about 3.5 more hours a week on leisure activities, so being able to reduce the administrative time on valuable tasks like securing a brighter tomorrow for dependents goes a long way in closing that coverage gap.
The benefit of time passes onto advisors as well. With the automated application process and digitization of more underwriting practices, they can devote more time to growing their client list, ultimately increasing commissions. The average time to get a policy commission previously meant up to 50 days of work. That has been cut by more than half with LGA’s experience, seeing policies on average delivered in 15-20 days, making the digital experience one that’s not only convenient but efficient and effective toward bottom lines.
The industry and LGA are working hard to reduce barriers to getting life insurance. Working with advisors to continually highlight the important role it plays in overall financial security can help brighten the tomorrows for more women and their families.
Michelle Buswell is COO at Legal & General America
1. 2023 Insurance Barometer Study, by LIMRA and Life Happens
2. 2023 Insurance Barometer Study, by LIMRA and Life Happens
3. 2023 Insurance Barometer Study, by LIMRA and Life Happens
4. 2023 Insurance Barometer Study, by LIMRA and Life Happens
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
