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2021 Life Insurance Trends
COVID-19 changed everything in 2020, and the future remains uncertain. More than ever, people realize the importance of selecting the right life insurance. Many are expanding their existing coverage for unexpected events in 2021. Like every other industry's response to COVID-19, life insurance companies must evolve too. Here’s part one of a two-part blog series on 2021’s rising life insurance trends.
Life insurance enrollment keeps growing due to COVID-19
Life insurance saw explosive growth in 2020. In fact, according to InsuranceNewsNet, Principal Financial Group reported digital applications tripled in 2020. Additionally, the 2020 MIB Life Index shows a 3.7% insurance application increase from last year and a 7.8% application increase from younger people aged 44 and below. At this rate, the 2021 life insurance enrollment demand shows no sign of slowing down in 2021.
More people using life insurance for an emergency fund
When COVID-19 hit, the economy experienced a great depression that’s still recovering. Many people lost their job and, out of necessity, found other ways to work. Even with vaccine rollouts, new variants of the coronavirus emerge. Now, even more, people realize the importance of life insurance coverage. So they’re better prepared for unexpected deaths and emergencies. Most people know about an emergency fund. Yet, not everyone knows that permanent life insurance helps you when you need it most. For instance, when you face an emergency, like a car accident or expensive medical bills, the option to use your life insurance funds to get you back to square one exists. It's smarter than taking money from your retirement accounts or borrowing money from creditors and getting into credit card debt. Don't have an emergency fund or only have temporary life insurance? Read our latest article to see if permanent life insurance is right for you.
Expanded life insurance and funeral cost-saving options
Besides emergency help, life insurance also provides a cushion for funeral expenses. Whether it's an unexpected death in your family or your death, it’s something to keep in mind. Funeral costs around $8,000. Much of that money (if not all), you’ll need to pay upfront to your funeral provider too. It’s recommended to evaluate your current life insurance to see where you stand. Also, expect more life insurance companies offering funeral expense options going forward.
New life insurance apps and life insurance niche offerings emerge
As life insurance growth continues, expect new companies to emerge too. Ones that sit alongside established ones like State Farm. In addition to new companies, more apps exist now than ever. These apps accommodate millennials and more tech-savvy users easier than past providers by taking the boredom out of shopping for life insurance. Lastly, expect to see more life insurance niche options that cater to a specific audience. For example, life insurance catered to people with sleep apnea exists. At the same time, companies like Banner offer pregnant women insurance options. With life insurance companies continually evolving, the possibilities remain endless. No matter your need, you’re bound to find the perfect life insurance provider for you.
Life insurance online sign-up versus in-person visits increase
In-person visits and phone calls provide the foundation for life insurance companies. It's how life insurance companies start their onboarding process with new users. When COVID-19 happened, that all changed, and in-person visits now feel dangerous. In fact, 59% of 100 industry professionals interviewed in a Society of Insurance Research (SIR) survey expect online life insurance enrollment to keep growing.
It’s essential to make the application process painless for new users to keep them engaged and so they don’t get frustrated and give up. Lemonade has done an excellent job streamlining this experience for the P&C industry offering renters insurance and making the onboarding simple by using a chatbot. While in-person visits remain essential, COVID-19 shows less need for them. Out of all 2021 insurance trends, expect this one to remain prevalent during COVID-19.
We hope you enjoyed this week’s blog post. Stay tuned for part two, where we share five more life insurance trends to watch in 2021.