Wade Seward

What Instant Issue Is, Isn’t, And Why Your Clients Want It Now

From instant meals to instant messages; from on-demand food delivery to on-demand movie streaming, it’s clear: We live in a world where nearly everything we could want appears at the touch of our fingertips. This applies not just to our creature comforts, but to the way we do business as well.

Today’s consumers have become accustomed to, and fully expect, solutions that offer simplicity, speed and seamlessness. There was a time in the not-too-distant past where when we wanted or needed something, we went to a store or consulted with someone at an office. Then came online shopping, where the convenience of home delivery changed everything, and Zoom opened up a whole new virtual experience for service providers such as physicians, therapists, financial advisors, and more. For brokers, working with instant decision/instant issue carriers is somewhat like placing your grocery order and choosing whether you want it delivered to your home or, if it’s more convenient for you, to choose curbside pick-up. Your customer is still ordering the same items, but how they obtain them is the variable factor.

It’s no wonder, then, that almost half of all U.S. adults say they are more willing to purchase a life insurance policy via simplified underwriting than traditional underwriting due to the convenience, no need for medical exams, and transparency when it comes to premiums. In recent years, options such as instant issue life insurance policies have grown in popularity as more digital-first providers emerge to meet consumers where they are to help bridge the coverage gap for the 48 percent of Americans who do not yet own life insurance.

Whether an applicant is approved or not, instant issue policies may sound like a great fit for today’s digital natives—“instant” is the name of the game!—but what are they, really? Read on to bolster your knowledge of what instant issue life insurance is (and, perhaps more importantly, what it’s not).

Quiz: How Much Do You Actually Know About Instant Issue Life Insurance?
But first, a quiz. To test your instant issue savvy, review these statements and determine whether they are true or false.

1. All instant issue policies are the same.
2. Anyone can apply for and receive instant issue life insurance.
3. Instant issue life insurance offers the same level of coverage as traditional policies.
4. Instant issue policies are always more expensive.
5. No-exam life insurance is just “instant issue” by another name.

If you answered “false” to all of the above, you are correct! When it comes to instant issue policies, like most things in our industry, there is a bit more nuance behind the magic.

The Ins and Outs of Instant Issue
In a nutshell, instant issue life insurance refers to a policy that expedites underwriting, providing rapid approval and coverage without the need for extensive medical exams. It’s designed for quick and straightforward applications, making it a convenient option for clients seeking smaller coverage amounts promptly. While policies and terms vary by carrier, most instant issue options have a few key features in common:

• Client Convenience: Instant issue insurance caters to clients who prioritize a rapid application experience.
• No Medical Exams: Instant issue policies typically do not require medical examinations, reducing potential barriers to purchasing.
• Simplified Applications and Streamlined Underwriting: Applicants complete health questionnaires to expedite underwriting and approval time compared to traditional policies.
• Immediate Coverage with Immediate Effect: Clients gain access to coverage almost instantly upon approval.

Instant issue policies may be worth exploring for your clients—including the 47 percent of U.S. adults who say they would consider a simplified underwriting process simply for the benefit of avoiding face-to-face interactions to make the policy purchase. As the life insurance industry continues to modernize, there is great opportunity for brokers to leverage digital and tech solutions to not only delight clients, but also to reallocate time toward value-added activities such as prospecting, relationship management and more. As always, it’s important to remember that these tools are not meant to (and could never truly) replace the integral role of brokers, but rather to help boost productivity and cut through the red tape of the traditional purchasing process.

Reference:

1. The Life Insurance Consumer Report Study 2023, Insurist.
2. 2023 Insurance Barometer Study, LIMRA and Life Happens.
3. The Life Insurance Consumer Report Study 2023, Insurist.

Just as a skilled captain guides a ship through tumultuous waters, insurance brokers act as expert navigators, weatherproofing the vessel for the stormy seas of life’s uncertainties and ushering passengers and their loved ones toward the safe harbor of financial protection. As technology transforms the industry, clients are looking for understanding, guidance, and trust—elements that can only be cultivated through genuine interactions. Valuing client relationships and the value of time-honored expertise brokers offer are critical to making this shift. Leading digital solutions providers, like Haven Life, aim to make life insurance simpler, more accessible, and more affordable for everyone, by empowering brokers with tools that streamline the day-to-day—freeing up crucial time to refine practice management strategies and elevate client engagement to new heights.

Anchors Aweigh
Even in a digital world where people are accustomed to self-serving on many transactions, there is a growing consensus among consumers about the benefits of life insurance and the value of tailored guidance from brokers. A recent LIMRA report finds that top barriers to those who recognize the need for life insurance but do not obtain a quote include affordability and difficulty understanding how much coverage is needed. In fact, more than 50 percent of Americans overestimate the cost of life insurance by 300 percent.

These knowledge gaps represent a major opportunity for brokers to interface more regularly and directly with clients and prospects to address common misconceptions and offer insights into the purchasing process. This guidance is especially valuable to those 48 percent of adults who do not own life insurance, but of course hinges on the broker having the time to nurture these interactions. If only there were more hours in a day! Working with digital partners enables brokers to reclaim valuable time by simplifying the application process while also catering to the modern-day consumer, who has come to expect instant gratification and access to information at their fingertips. By harnessing the power of digital innovation, brokers can unburden themselves from time-consuming and repetitive tasks and instead focus on building relationships, honing expertise, and prospecting for clients (and/or pirate gold).

Bridging the Generational Gap for the Long Haul
In addition to delighting your current client base, incorporating digital solutions can help you engage with younger age groups, including Millennials and Gen Z in their mid-20s through early 40s. While your existing clients may prefer to meet face-to-face, their children might appreciate the flexibility and self-service options offered by digital capabilities. This may be a group of digital natives but nearly half of Millennials and Gen Z say they expect to research online for life insurance but work with a financial professional to ultimately purchase coverage. Millennials in particular stand to gain from thoughtful broker interactions and education, as they are among the heirs poised to inherit $30 trillion from baby boomers by 2045.

Let’s meet a few of these folks, who are celebrating key life milestones and seeking financial protection for their loved ones along the way.

Sebastian and Devonta

• First-time homebuyers
• 32 and 30 years old
• Combined income of $180,000 per year

With new careers Sebastian and Devonta barely have time to spend with each other or work on the home they just closed on, let alone compare policies and quotes. They have no idea how much life insurance coverage they should purchase, but after many canceled appointments due to busy schedules, the couple was able to fill out the digital application.

On a virtual call, their broker explained the nuances of term and whole life products (and gave them the phone number of a trusted local handyman).

Charlie and Finn

• Newlyweds
• 27 and 29 years old
• Jointly own a popular pet grooming business and manage social media accounts with thousands of followers

As recently married small business owners and online influencers, Charlie and Finn have a lot going on. In the next few years, they plan to grow their retail presence—and their family. Today, though, their main priorities are managing cash flow and producing content for their followers around the world. Believing they are too young to think about life insurance, Charlie and Finn are among the 55 percent of Americans without life insurance who plan on purchasing it in the future.

After an initial call with a parent’s broker, the online application they filled out was approved almost instantly, allowing them to turn their attention back to their entrepreneurial pursuits.

In each of these situations, a simple conversation coupled with the convenience of a digital application helped these young couples chart a course toward a more secure financial future. In an era where screens often mediate our interactions, the need for human connection and understanding has never been more pronounced. It is here that insurance brokers shine—as mentors, educators, and trusted advisors. A digital solution just gives them more time to be exactly that.

X Marks the Spot
As the winds of technological change fill our sails, clients are increasingly seeking flexibility and instant results in addition to a partnership forged in trust, nurtured through genuine connection, and guided by expertise. Brokers are the key to the proverbial treasure map, decoding the complex language of insurance policies and helping clients navigate the landscape. It’s incumbent on the industry to show brokers how digital solutions aren’t just more efficient, but can help make the broker more effective in a future where interactions are more impactful, relationships are deeper, and practices are more efficient than ever before.

Image by Yuri from Pixabay