In Profile

A Conversation With Gina Birchall

Embracing Life

by P. E. Kelley

Mr. Kelley is managing editor of this magazine. Connect with him by e-mail: [email protected]

September is Life Insurance Awareness Month, the embodiment of a strategic effort by numerous industry constituencies to provide a sharper focus on the importance and immutable efficacy of our life insurance products. Seventeen years ago, the non-profit organization LifeHappens was formed to do just that: condense and deliver a cohesive message to consumers about the sheer simplicity and power of the essential value proposition these products offer.

In the shadow of COVID-19, and all that it has done to unsettle the entirety of our daily lives, this message has become even more crucial, as we all face greater uncertainty than ever before. Indeed, the concept of security appears to ring considerably louder amid the tumult of our shared pandemic.

Gina Birchall is chief operating officer of LL Global, the industry research organization that encompasses LIMRA, LOMA and the Secure Retirement Institute, representing 1,300 members in 64 countries. She spoke with Advisor Magazine about the ongoing mission of Life Insurance Awareness Month, and indeed of the whole of the life insurance industry in general. Under the pall of these troubling times, that mission becomes even clearer: to respond to unforeseen tragedy, to restore financial solvency and, ultimately, to keep families intact.

PEK: Can you tell us about Life Insurance Awareness Month and why LIMRA is involved?
GB: LIMRA is proud to come together with more than 140 financial services companies to support Life Insurance Awareness Month (LIAM). Life Happens developed LIAM 17 years ago as a way to educate consumers about the importance of life insurance and the role it plays in protecting families’ financial security. LIMRA is a not-for-profit research organization that has been conducting consumer and market research in the life insurance sector for more than 100 years so we are uniquely positioned to use our research to highlight the need and support this important initiative.

PEK: Has the global pandemic raised the awareness of the need for life insurance?
GB: The COVID-19 pandemic has highlighted how fragile life can be. LIMRA just published a study where 29% of Americans say they are more likely to buy life insurance in the next 12 months in response to COVID-19. This represents 75 million Americans.

If there is a small, unseen benefit in all this, it’s that the pandemic made more people aware of the need for life insurance and hopefully they will follow through and get the coverage they need to protect the ones they love.

From the life insurance company perspective, we know that carriers have taken steps to ensure that consumers can apply for a policy during the COVID-19 pandemic. More than a quarter of U.S. life insurers have expanded their automated underwriting practices and postponed or waived paramedical requirements. Because of the social distancing measures put in place, some life insurers also are accepting electronic health records, and are allowing historical exam and lab data in place of a current exam.

PEK: What prevents people from getting the life insurance they say they need?
GB: There are a number of reasons why people don’t get the life insurance they know they need. People know life insurance is important — 80% of Americans say this – but knowing does not always translate into action

One obstacle is that most people have the misconception that life insurance is expensive. According to our research, more than half of Americans overestimate the cost of life insurance three-fold. For Millennials, it’s more than five-fold. LIMRA research shows 50% of Millennials believe the estimated yearly cost for a $250,000 term life policy for a healthy 30-year-old is $1,000 or more. In actuality, it’s closer to $160 per year.

Finally, people tend to be intimidated by the process. People don’t buy life insurance frequently so they often don’t know what to expect.

PEK: The 2020 LIMRA Consumer Sentiment Study reveals how COVID-19 has highlighted the importance of life insurance. How do you repurpose this message amid such challenging societal events?
GB: In LIMRA’s Consumer Sentiment Study more than half (53%) of Americans expressed a heightened need for life insurance because of COVID-19. The fact that people have a heightened awareness of the need for life insurance is actually good news because nearly half of Americans (46%) are uninsured and many more (33%) say they are underinsured, according to LIMRA’s 2020 Insurance Barometer Study.

Americans expressed a heightened need for life insurance because of COVID-19. The fact that people have a heightened awareness of the need for life insurance is actually good news because nearly half of Americans (46%) are uninsured and many more (33%) say they are underinsured...

At the same time, we know many people are living paycheck to paycheck. Only 1 in 4 American households have at least three months of emergency savings and 1 in 3 Americans say their families would face financial hardship within a month if the primary wage earner died. The more we, as an industry, can share how important life insurance is, the more we can help Americans get the protection they need so that in the unfortunate event they die, the ones they leave behind will be financially protected.

PEK: With 46% of Americans identified as ‘uninsured’ and 33% as ‘underinsured,’ what strategies have you developed to integrate these deficiencies into the industry’s sales messaging?
GB: As a matter of fact, LIMRA, in collaboration with Hoopis Performance Network, developed Trustworthy Selling, a sales effectiveness training program to help agents and advisors better connect with consumers. Using LIMRA’s research insights on consumers and their behaviors, this training program equips financial professionals with the knowledge and skills to engage consumers on their terms and — as a result — increase their sales.

As we built Trustworthy Selling, we found that small changes in the language and the methods that financial professionals use can have a big impact on sales results regardless of whether that sales interaction is face-to-face or virtual. The methods presented in the course help build that trusted relationship, which led to almost a 30% uptick in productivity for those who took the course, as demonstrated by a case study published by the Association for Talent Development.

When the pandemic began to spread earlier this year, the industry adapted to make it easier for Americans to connect with their agents and advisors while we all were adhering to social distancing guidelines. LIMRA research shows 84% of agents and advisors changed the way they communicate with their clients, leveraging tools such as video conference calls, email and other digital tools to stay in touch with their clients. These tools are invaluable at a time when face-to-face meetings are not an option.  Our research revealed that 80% of advisors said they communicated with their clients more often to help them address their financial concerns as a result of the pandemic.

I think one key value of LIAM is it gives advisors another reason to talk to their clients about life insurance and the importance of protecting loved ones in a time full of uncertainties.

PEK: What steps are life insurance companies making to encourage consumers to buy life insurance?
GB: Over the past several years, more Americans have indicated they want to be able to buy life insurance more quickly and with less invasive testing. According to the 2020 Insurance Barometer Study, 50% of consumers say they are more likely to buy life insurance through automated or simplified underwriting than by using traditional underwriting.

The top reasons automated underwriting appeals to consumers are:

• It’s fast and easy – 66%

• It’s unbiased and objective – 66%

• It provides transparent explanations of risk and pricing – 58%

• It avoids medical exam, blood, and urine samples – 56%

• It avoids the need to see a doctor – 55%

Our members have responded. In 2019, a LIMRA study found that 62% of North American companies have automated underwriting programs in place and another 24% say they plan to implement automated solutions in the future. Our research shows the pandemic accelerated adoption of automated underwriting. Advances in technology and analytics have made it possible to offer greater amounts of coverage through automated underwriting. The study found carriers offer insurance through automated underwriting in amounts ranging from $25,000 to $10 million.

PEK: How do you influence consumers who tend to prioritize life insurance below retirement savings, healthcare and disability? 
GB: The top reason people give for not buying life insurance is that they have other financial priorities. The 2020 Insurance Barometer Study finds consumers’ top financial concerns are saving enough for retirement, paying for long-term care, and being able to pay their living expenses if they became ill or disabled. All of these things are important, but are they more important than protecting those you love? That’s why working with a financial professional can help families put a plan in place to address their life insurance needs as well as their other financial concerns.

Having spent more than 20 years in this industry, I am proud of the efforts and advances made to reach all Americans and help them get the life insurance coverage they need. Life Insurance Awareness Month is just one way the industry works together to engage consumers and help them achieve their financial goals.