Life Insurance In The Time Of COVID-19

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

As coronavirus numbers across the U.S. are once again rising and uncertainty looms towards the upcoming election, more and more people are moving towards future financial protection for themselves and their families in the form of life insurance. With over 220,000 deaths and 8 million cases across the continent, COVID-19 has altered everything from daily activities to financial well-being and plans for a large percentage of the U.S. population.

The number of bankruptcies and unemployment is at a staggering high as it is making a significant impact on businesses and the economy across the globe, moreover on the insurance industry.

Adjusting To Challenges And Seizing Opportunities

Today, the economy has already thrown itself into survival mode as it tries to recover and respond while insurers are facing a variety of challenges but welcome new opportunities. The life insurance sector, rooted in its customers, its operations, workforce, and governance and regulations, has quickly started to reevaluate its processes in order to prevail, all part of a $7 trillion industry where 54% of Americans own life insurance. 

Each of these facets has dramatically shifted starting in March 2020, when the coronavirus pandemic made its way to North America. From customers and applicants re-evaluating their policy coverage to staff retraining and supporting systems, and regulatory authorities trying to understand the crisis’s impact and their responsibilities, this industry like others, needs to address the problems at hand with detailed solutions adjusted for the times. 

Life Insurers Are Changing Their Channel Operations

The front lines of life insurance companies are customer-facing, literally. Today these channels have been altered to reduce infection. Now digital channels are on the rise and insurers who have already implemented digital solutions have the upper hand when it comes to service, as well as those finding alternatives to paper applications and cash deposits.

From a customer perspective, individuals are experiencing job loss and financial strain, reducing or deferring spending even on life insurance policies. Insurers need to be extra sensitive these days to these situations and provide solutions to alleviate the current hardships. Solutions can be in the form of straight forward online applications, quick response for changes individuals are experiencing, and the flexibility and wide array of offerings.

Operationally, no one could have expected this level of disruption by COVID-19, more specifically the requirement to maintain social distancing and limitations of face to face interaction. Moreover, existing IT infrastructure does not necessarily have the capabilities to process and respond to staffs working remotely, cybersecurity, and customer information systems. The main challenge now is to create digital operation systems to support the new current and rethink internal operations procedures allowing for the changes at hand. 

Straightforward Answers To Tough Questions By Customers 

People seeking life insurance are now asking additional questions and expecting fast answers along with a variety of options and flexible offerings. Fortunately, life insurance companies are responding and encouraging further one on one inquiries.

Today, life insurance does cover coronavirus as long as the policy was purchased before the outbreak. Full payout relies on full transparency from the policy owner or the insured, a complete application, and payment of the life insurance premiums. 

Insurers do warn that changes to the application process, prices, and underwriting are already being made, albeit slowly. Longer times of medical records review for applicants and delayed assessment of applicants that are frequent travelers or may do so in the future are only a few examples of these changes. Another change in the traditional process is the addition of specific COVID-19-related questions. Applications may be denied based on these answers.  

The market upheaval is raising questions about life insurance from the unemployment aspect. Even before coronavirus, it had not been an easy feat to obtain life insurance if you were unemployed. Now, there are more jobless and yet still, life insurers frown upon these applicants because there is no guarantee monthly premiums will be paid. Insurers stress that it is not impossible to get life insurance in this situation, but the chances are slim.  

Life Insurance Trends In 2020

• Online and digital reach: Policyholders, potential customers, and internal personnel need to learn to communicate, apply, make changes, and work digitally. That said, the online solutions must be flexible, easy to use, designed to make all users comfortable and safe in the system. There are quite a few technology solutions, like Augmented Reality, that can allow for this, where customers, for instance, can connect from home to stakeholders and advisors. 
• Pandemic coverage: A no-brainer nowadays, insurers are starting to offer coverage and protection against diseases caused by viruses resulting in an epidemic and pandemic. Life insurance companies worldwide are taking steps to make sure they are not caught off guard resulting in a large number of deaths. 
• Customized solutions: This is not necessarily a new trend, but this year it is receiving more focus, as customers are more involved and expect, like in other industries, customized solutions instead of the one-size-fits-all approach. Policies are now starting to become tailored to customer expectations and specific needs.  
• Increased options and benefits: As competition in the sector is rising, insurers are providing a larger variety of policies, and additional riders being added to regular policies.  
• Customer-centered solutions: Insurers are boosting their methods for claim settlements along with their focus on online access, increasing efficiency, and shortening a claim’s timeline. 

The life insurance companies that will triumph are ones that can dig deep for change, keep up with customer demand and needs, and look ahead as innovators in their sector. One type of such company that is leading innovation amidst the insurance giants is Sproutt online life insurance. A small, soon-to-be-big, startup innovating the process of obtaining life insurance. An approachable customer-centric online platform focusing on the individual, its needs and well-being, Sproutt can provide a variety of flexible policy offerings. This is the type of innovation the industry needs to adjust to these times of change. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.