Filling the middle-market life insurance gap in America

By Kevin Cummer, Director, Life Products for TruStage™

Life insurance is a crucial aspect of financial planning, providing a safety net for individuals and their loved ones. In recent years, the mid-market segment has gained prominence in the life insurance industry, showcasing its scalability potential. The mid-market consumer refers to households or individuals who fall into the $50,000 to $200,000 income bracket. These consumers are usually transitioning through key life events such as buying a home, getting married or having children.

This article explores the unique advantages TruStage has to offer partners looking to scale their mid-market consumer segment.

Life insurance demand is at an all-time high

In the wake of the pandemic, interest in life insurance is at an all-time high, with 39% of consumers intending to buy life insurance in the next year.¹ However, consumers still lack a general understanding of what life insurance is, how much it costs and how it could help provide them financial security.

According to a recent article by the Life Insurance Marketing and Research Association (LIMRA), 52% of American adults have life insurance, highlighting a large gap in unprotected consumers.¹ Additionally, 41% of both insured and uninsured adults believe they could use more coverage.¹

When we look at the differences between generations, there’s also a large gap that needs to be filled, particularly for younger consumers.¹

• 40% of Gen Z adults own life insurance.
• 44% of Gen Z adults have reported that they intend to buy life insurance in 2024.
• 48% of Millennial Americans own life insurance.
• 50% of Millennials plan to purchase life insurance coverage in 2024.

This gap in coverage for younger generations presents a great opportunity for providers to first educate consumers about the importance of life insurance and second help them find the right coverage for them.

Why more Americans don’t have life insurance

The top reason Americans don't have life insurance is due to a lack of understanding about how much or what type of coverage is needed. Fewer than one in three Gen Z and Millennial parents express a strong sense of confidence regarding their understanding of life insurance. Additionally, 40% of Gen Z parents and 29% of Millennial parents report abstaining from purchasing coverage due to uncertainties regarding the required coverage amount and the specific type of policy to choose.¹

The biggest misconception behind life insurance is that it’s expensive. Many people believe it’s a luxury to have, and not something that could be afforded by more.

An additional factor that plays into the lack of coverage are economic influences creating turbulent financial conditions for American adults. When households have financial strain, expenses will be cut down, and life insurance is not immune to this. Households with a lower income are less likely to buy a life insurance policy. A broker with access to multiple companies may be able to find affordable coverage for consumers with a lower budget.

How providers can engage with mid-market consumers

As we’ve learned, there is a large gap in young adults' coverage due to a lack of education and concerns about affordability. Providers wanting to market to these younger consumers should prioritize educating young adults first. To connect and engage with these consumers, you should understand where they spend their time and how they prefer to learn about new products they’re interested in purchasing.

Gen Z and Millennials are more likely to be influenced by social media and online reviews when choosing a life insurance provider. They tend to be savvy consumers who will take the time to research companies and look for vendors offering differentiators that meet their needs.

The TruStage Life Insurance approach

TruStage Life Insurance is designed to provide insurers with solutions tailored to scaling the mid-market. We provide an effortless end-to-end experience that helps simplify, streamline and remove friction from the policy process.

Here’s how we differ from competitors in this space.

• Broad funnel — accept a wide cross section of consumers.
• No case management — instant decisions.
• Robust integration capabilities — API enabled B2B system integration capabilities.

There is a huge need in the consumer marketplace for banks, insurance carriers, and direct-to-consumer distributors. The TruStage Life Insurance approach is designed to help capture that marketplace.

The mid-market consumer segment in life insurance presents a huge opportunity for providers. The ability to provide accessible, customized solutions to a diverse clientele sets the stage for sustained growth in the industry. By addressing the unique needs of the mid-market segment and leveraging technological innovations, insurers can build a robust foundation for the future, helping individuals across various income levels improve their financial well-being through life insurance.

Interested in learning how TruStage Life can benefit your business? Learn more on our website and connect with us today.

Discover how to bridge the gap in America's mid-market life insurance

The life insurance landscape is evolving, with the middle market emerging as a key segment. Consider this:

• 50% of Millennials plan to purchase life insurance coverage in 2024.
• Only 52% of American adults have life insurance, highlighting a large gap in uninsured consumers.
• 41% of insured and uninsured adults feel they need more coverage.

Our in-depth analysis offers exclusive insights into the mid-market life insurance gap. Learn how TruStage is pioneering new pathways to tap into this underserved market. Equip yourself with strategies to address the unique needs and preferences of middle-income families. Benefit from our comprehensive research by understanding:

• The increasing demand for life insurance among Gen Z and Millennials.
• Key barriers preventing Americans from obtaining life insurance.
• Innovative engagement approaches for providers targeting mid-market consumers.

Take advantage of this potential opportunity to expand your reach in the life insurance market.