These are scary times for many people across the country. The COVID-19 pandemic has only reinforced the economic divides in our society. With the threat of getting sick constantly looming, many Americans are not financially stable enough to live on their own or support their families if their partner or themselves were to pass away. Yet more than a third are going without life insurance.
Kasasa conducted a survey in partnership with Qualtrics to discover why consumers have skipped out on insurance — and if they would be interested in getting it from their financial institution. Here’s what we found.
Why are so many consumers forgoing insurance?
According to our survey, 36% of respondents said they do not have life insurance. Of that percentage, one-third indicated that it is the price which is most off-putting for them.
Similarly, 45% of Americans don’t have health insurance because they think the cost is too high.
Many Americans struggle with living paycheck to paycheck or don’t have enough in savings to cover emergency expenses — even those that are less than $500.
As of November 2019, 71% of Americans reported struggling financially. With millions of people being laid off in the past few months and more economic downturns likely in the wake of the pandemic, 9 out of 10 Americans are now feeling financially stressed.
While car and homeowner's insurance are required by law, life insurance is optional — making it an easy product for consumers to forgo in order to save a bit of money.
Nobody likes to throw away money. In some ways, opting for insurance can feel like gambling. But so can opting out of it. On the one hand, if nothing happens, someone might feel like they threw their money away on something they never actually used. On the other hand, not having insurance could leave them in dire straits should something happen.
Either way, consumers should have affordable insurance options to lessen the burden that they may feel when trying to choose between saving money in the here and now or protecting themselves for the future.
Is it easier for consumers to get life insurance during the pandemic?
Affordability is not the only thing that may deter consumers from getting insurance coverage.
Getting life insurance can be a hassle for many people. With requirements around getting a medical exam and the potential for rejection if the exam yields undesirable results, many consumers may choose to opt out of the process entirely to save themselves a few headaches.
In fact, 30% of survey respondents said that “no required medical exam” would be the most attractive incentive for getting life insurance.
Kasasa survey results for the question: “When shopping for life insurance, what features/factors are most important to you?”
With the CDC’s social distancing guidelines in place, in-person blood tests, urine tests, and weigh-ins are impossible for the time being. Without those requirements, many who may have been nervous to try to get life insurance coverage for fear of being rejected don’t have to worry about that right now.
Coverage may be changing for some policyholders, but many providers are including coverage for people who lose their lives due to COVID-19 as well. So, while insurance is always a smart idea for consumers, now may be the best and most important time for those who have gone without to finally get it.
Would consumers be interested in getting insurance from their financial institution?
Yes! According to our survey, 70% of respondents indicate that they would be likely to consider an offer for a life insurance plan through their bank or credit union. 86% would consider a vision insurance offer from their institution, and 73% would accept a dental insurance plan from their institution if it met their needs.
Kasasa has a referral program and online marketplace that was created to help community financial institutions offer and cross-sell the value-added products that consumers want. It takes the work out of having to launch new products — like life, health, vision, or dental insurance — on your own.
And every transaction is completed 100% online. Consumers can choose the partner products they want from the online marketplace and enroll from the comfort of their home. Any customer support needed is handled directly through the insurance provider.
Using a partner platform like this can be a great way to support the people in your community at a time when they need it most. And it generates non-interest income for your institution while adding no operational burden to your team.
Busting the myth of unaffordable insurance
Insurance has always been a service designed to help people prepare for the unexpected. No one could have expected or prepared for the swift changes we’ve seen since the pandemic. But having insurance at a time like this is a great provider of peace of mind should tragedy occur.
In fact, 60% of survey respondents indicated that they view the benefit of peace of mind as one of the most valuable aspects of being a life insurance owner — even more than leaving an inheritance or covering their dependents.
Many Americans are financially vulnerable, especially now. If your account holders are not aware of the potential financial pitfalls they could be facing without insurance, offering financial education to them is a great step in making sure they know how to prepare themselves for the future. Offering an affordable solution for their insurance coverage is even better.
If you would like more information on the survey we conducted with Qualtrics, please send us a message here or if you're already a Kasasa partner, contact your Client Success Manager directly.