“The ideal policyholder today is financially aware and financially active in personal finance, yet remains disconnected from the relevance of life insurance – bridging this gap needs to be the industry’s next frontier”

With the rapidly advancing landscape in life insurance, a new wave of young and financially savvy individuals are taking their spot on the market. These new users are gradually inserting themselves into financial spaces, by dabbling with stocks, cryptocurrencies and goal-based savings as early as 19 years, reported by CNBC.

Despite appearing to seem financially aware, life insurance adoption appears to be noticeably lesser with this demographic. This gap presents a growing challenge for life underwriters looking to secure and onboard low-risk policyholders, who typically tend to be young, healthy individuals that fall into the preferred or preferred plus risk categories.

This demographic, while considered ideal from a mortality and longevity standpoint, makes up the smallest portion of life insurance holders, as they tend to assume that life insurance is unnecessary for their age, or because they don’t have dependents yet. The issue is evident: the very group that Chief Life Underwriters value most is the least likely to engage.

 “The challenge isn’t with product availability, rather it is about creating relevance in the lives of modern, self-directed consumers”

This article dwells on understanding the challenge faced by life underwriters in making attractive propositions to this valuable user segment and explores how the integration of modern tools such as an Investment Robo Advisor bridges this gap.

Why Life Underwriters Find It Hard to Engage Young Prosects

For life underwriters, attracting clients that fall under the preferred or preferred plus risk category is more than just a business goal, it is a long-term risk management strategy. These policyholders are statistically less likely to trigger early claims because of their health and life expectancy.

Having these clients leads to more predictable and sustained premium flows that continue to increase with Mortality charges, which is typically 1.25% per year. Mortality tables, which are key to calculating premium pricing using predicted life expectancy, confirms this trend.

The disengagement lies in perception, however – younger individuals either don’t understand the value of adopting life insurance earlier on or feel that they don’t need it as they don’t have any dependents, among many other misconceptions.

“Life underwriters may favour a young and preferred clientele, but unless their financial expectations aren’t met, they will continue to remain out of reach from traditional insurance offerings”

National mortality tables shows that younger individuals have the lowest probability of death per 1,000, which is a key driving point, being the reason for life underwriters prizing this demographic. However, without having a compelling reason to shift their mindset, this low-risk group remains uninsured. Traditional marketing strategies no longer resonate, so what is needed is a fresh solution that aligns with user’s financial habits and comfort zone, paired with their digital lifestyle.

Approaching the Demographic with Investment Robo Advisor

To engage with the younger crowd, a familiar financial tool that enables routine financial habits needs to be paired with life insurance products. Enter MenaMoney Technology’s Investment Robo Advisor – a digital solution that doesn’t just advise users on personalised investment strategies, but also makes insurance a relevant and engaging proposition.

With a sleek and gamified interface, the digital platform empowers users to explore investments that they value through a self-service experience, aspects that the target demographic finds intriguing, leading them to your life insurance products while clarifying any misunderstandings they have.

Tech savvy individuals who are used to online banking, trading apps or goal tracking will find this integrated approach to financial security a natural fit. The Robo Advisor doesn’t just sell insurance products; it contextualises it as a part of a broader, future-focused financial strategy. It also leads clients that are aware of investments but hold misconceptions about life insurance to research these views independently. By showing how life insurance complements investments and saving goals, it reframes the conversation entirely.

The model opens up a previously untapped and valuable clientele. While life insurance is presented alongside tools that cater to a client’s existing financial habits, adoption rate goes up without having to overhaul underwriting criteria. Life underwriters can highly benefit from a steady influx of low-risk clients, helping to manage mortality risk. The result? More policies sold to the right people at the right time, meeting the evolving expectations of the market.

If you’re ready to transform your marketing strategy to draw thousands more of young prospects and newly-weds, and have long-term engagement value with them, please contact us at MenaMoney.