My favorite Liam is probably Liam Devlin, Donald Sutherland’s character in the movie The Eagle Has Landed (and this and two other novels by author Jack Higgins). I still use one of my favorite quotes from time to time referring to the highly unlikely. Replying to a German officer who is explaining that Germany will shortly win World War II, Devlin offers, “Pigs may fly, General, but I doubt it!”
Assuming capital letters are a significant enough differentiator, my favorite LIAM is, not surprisingly, Life Insurance Awareness Month. LIAM is brought to you dutifully and passionately each year by Life Happens (lifehappens.org) in collaboration with, and with invaluable assistance from, LIMRA (limra.com). Throughout the year they provide a host of resources for agents to utilize with clients, prospects and in prospecting efforts, as well as consumer-facing campaigns to raise awareness among the public. Any statistics referenced in this offering are thanks to one, if not both, of these incredible insurance industry service organizations.
Leaving Murder Hornets and Monkeypox aside for this discussion, two-plus years into living with the specter of COVID-19 consumer awareness of the importance of life insurance is high, but that hasn’t seemed to statistically translate into a rush to buy overall. Only about half of Americans have any life insurance coverage, down from 63 percent just 10 years ago. This despite stats indicating that there are 106 million Americans—41 percent of the adult population—who acknowledge they are living with a life insurance coverage gap and thirty-seven percent of Americans who claim they plan to buy life insurance this year. Thirty-one percent said they are more likely to buy life insurance due to COVID-19.
We all recognize that there unfortunately are Americans who simply are not prospects for our products—we see some of them on the corners of busy intersections and in homeless camps throughout our country. Further, there are a significant number who have basic necessity needs so acute that there simply isn’t anything left for life insurance. Perhaps a few have a small burial policy stuffed in a drawer somewhere. What we should all feel more keenly is the moral obligation to help those families whose means do not currently prevent reducing or eliminating their coverage gap and educate them. Persuade them. Gently assault them with the real numbers necessary for their loved ones to continue to live life in at least some semblance of the manner they currently do should a breadwinner die unexpectedly.
There are more than 77 million middle-income Americans, defined as having a household income of $50,000-$99,900, making up around 31 percent of the total population. More than half (52 percent) of middle-income Americans report having life insurance. The statistics show that nearly forty percent of middle-income Americans believe they don’t have enough coverage, representing that more than 29 million middle-income Americans live with a coverage gap. But we should consider further two important factors: 35 percent of men and 22 percent of women believe the coverage they receive through the workplace is sufficient. Yet according to the U.S. Bureau of Labor Statistics the median life insurance coverage offered at the workplace is either a flat sum of $20,000 or one year’s salary. Further, about 30 percent of consumers view life insurance only for burial and final expenses—clearly resulting in not purchasing enough coverage to provide income replacement, not to mention enable wealth transfer, two key ways life insurance can benefit loved ones after a wage earner dies.
Forty-two percent of Americans say their household would face financial hardship within six months should a wage earner die unexpectedly. Twenty-five percent would struggle financially within a month. Among the reasons middle Americans cite as reasons for not seeking life insurance coverage (or more) are that health issues make it difficult, they don’t know what to buy or how much coverage they need, and that they can’t afford it (the perceived cost is too high). These are considerations or misperceptions that a life insurance agent is uniquely more capable than any other entity to correct and solve!
Meanwhile nearly half of uninsured Millennials (49 percent) say they haven’t purchased life insurance because no one has approached them. And 47 percent of consumers said they preferred to use a financial professional to purchase life insurance. It is incumbent upon our industry to do the utmost to prevent these unnecessarily vulnerable families from spiraling into the strata of those who truly can’t afford to purchase life insurance products. If nothing else, LIAM should remind life insurance agents that there are many un- or under-approached prospects whose lives you could immeasurably positively impact.
It’ll take a collective effort of a whole lot of brains less limited than mine to bring about real, widespread change in the number of un- or under-insured Americans with enough income to afford sufficient, or at least more, life insurance. It is my hope that this year my favorite all-caps LIAM can spur at least Broker World readers to consider tithing their time and expertise to reach out to folks who need, and can manage to afford, to close their life insurance coverage gap. And, when faced with reluctance or indecision, you could always pound the COVID drum like a swing state politician setting election parameters.[SPH]
