Building a brighter financial future with consumer trust
By Kevin Cummer, Director, Life Products for TruStageTM
Financial uncertainties and disparities are top of mind for many consumers today. Constant news cycles of inflation, the debt ceiling, the job market and interest rates fill the air waves. In times like this, consumers turn to the brands they trust to deliver. That’s why the concept of 'People Helping People' has emerged as a beacon of hope for consumers looking for help. This philosophy goes beyond mere transactions; it signifies a profound shift in how we perceive and approach business.
Through consumer insights, empathy, a focus on education and keeping 'People Helping People' as the guiding principle, credit unions can help members attain life insurance coverage and begin their journey to financial stability.
Consumer sentiment
Consumers are navigating a complex web of financial concerns that span a wide spectrum of challenges. They've experienced a rollercoaster of economic forces in recent years: the COVID-19 pandemic, political changes, international conflict, supply chain issues, job market uncertainty and inflationary pressures.
During times like this, consumers have a heightened awareness of risk and a desire to better manage it. Sixty-six percent of Americans say inflation is a “major concern” for them. They're concerned this will have a tangible impact on their quality of life. Thirty-two percent say their household finances are causing them to feel high levels of stress.1
Understanding the levels of financial stress at different life stages is important for identifying prospective life insurance buyers and educating them about how life insurance may help them better manage risk and alleviate financial concerns. This is an opportunity for credit unions to provide life insurance coverage based on members’ budgets. Being proactive is important because when people feel like their finances are spread thin, they look for areas of spending that can be cut, and life insurance is not immune to this.
Consumer financial strains by generation
One way to gauge how a life insurance policy might fit into a household’s budget is through an understanding of the most pressing financial concerns for each generation.2
|
Gen Z |
Millennials |
Gen X |
Baby Boomers |
|
|
Having enough money for a comfortable retirement |
45% |
50% |
51% |
31% |
|
Paying for long-term care services if I become unable to take care of myself |
35% |
41% |
44% |
30% |
|
Saving money for an emergency |
45% |
47% |
40% |
22% |
|
Support myself if I am unable to work due to illness or injury |
44% |
46% |
43% |
20% |
|
Paying for medical expenses in case of illness or injury |
39% |
41% |
38% |
24% |
|
Paying my monthly bills |
41% |
42% |
33% |
17% |
The perceived cost of life insurance is cited as the top barrier to purchase coverage. However, only 24% of all respondents in a recent survey correctly estimated the true cost of a life insurance policy.2 Year after year, consumers greatly overestimate the cost of life insurance.
This presents credit unions with an opportunity to educate members about the true cost of life insurance, and how any contribution (big or small) can provide important coverage.
Collaborative learning and education
Successful companies will differentiate themselves by taking a consumer-centric approach, recognizing purchase decisions begin with the awareness of need. The significance of bolstering this awareness is a point of consensus in the industry, and one that should be collaborative.
By promoting workshops, mentorship programs and online learning, consumers can gain knowledge and empower themselves with the information needed to make informed financial decisions. Tools such as an affordability calculator can help members learn how life insurance coverage fits into their family's budget.
When consumers understand just how affordable life insurance can be, the mystery behind life insurance policies disappears. They just need the right guidance from those they trust.
Embracing technology for good
Online platforms, mobile apps and social media networks provide avenues for connecting individuals and communities with experienced financial professionals and educational materials that can help. These technology tools bridge geographical gaps, making it easier for people to support one another and create a collective impact. For credit unions, technology can help connect members with their community credit union to better understand the options available to them based on their budget.
'People Helping People' is a unique approach to finance, but that’s what makes credit unions stand out. With an emphasis on empathy, trust, collaboration and social responsibility, credit unions truly engrain themselves in the communities they serve because they are part of the community. As we navigate an ever-changing financial landscape, this philosophy offers a guiding light toward a brighter future through life insurance coverage.
1LIMRA, Navigating Uncharted Territory, 2023
2LIMRA, 2023 Insurance Barometer Study, 2023