The pandemic has reshaped every aspect of our lives, from the way we work to the way we socialize. One key takeaway from this crisis is the unpredictable nature of life and the urgent need to help protect our loved ones’ future. As society continues to grapple with the ripple effects of the pandemic, credit unions tend to play a vital role in helping members get access to life insurance coverage.
The COVID-19 pandemic took the world by surprise, exposing vulnerabilities in our health system, economy and personal lives. Although the Centers for Disease Control and Prevention (CDC) ended the federal COVID-19 public health emergency declaration in May 2023, new strains continue to impact families throughout the country. Despite the wake-up call heightening the need, many are still unprepared for the financial burden that accompanied such losses.
In fact, 41% of American adults say they need life insurance or need to obtain more life insurance coverage. This represents a one-point rise from 2021, which suggests the overall level of unmet need has been stable over the past two years.2
The crisis underscored the uncertainty of life and work, highlighting the need to be prepared for unforeseen circumstances. During the pandemic, Americans’ financial concerns rose quickly and have continued to rise even after the pandemic subsided.
By bridging the need-gap, individuals could help safeguard their loved ones from potential financial hardships that could arise in the absence of adequate coverage. This proactive approach helps deliver a sense of peace of mind and better equips families to maintain their lifestyles, cover outstanding debts, fund education expenses and meet day-to-day living costs.
According to LIMRA’s 2023 Insurance Barometer Study:
Knowing this, credit unions have an opportunity to better serve members who may need help in their financial journey. Marketing to members in their respective stage of their financial journey may help members see that attaining life insurance coverage is possible, no matter their budget. There’s also a big opportunity to market to younger members such as Gen Zer’s or Millennials. Both of these age groups are entering prime stages to purchase life insurance.
The overall level of financial concern has remained above the 13-year average ever since the pandemic began, suggesting consumers are fatigued from three years of financial stress. Consumers are struggling to balance financial priorities and aren’t always sure where to begin when it comes to life insurance. However, this could be changed by credit unions equipping consumers with the right tools and information to have the confidence to select the right coverage.
The most common reason consumers don’t apply for life insurance is the assumption that it’s expensive. Credit unions could help members understand how a life insurance policy might fit into a household’s budget. It may be more affordable than Americans think, which presents a huge opportunity for credit unions to help educate members.
Life insurance is more than just a policy; it’s a source of coverage for families. Even the smallest amount of coverage could help families cover costs related to the following payment concerns:
Contrary to popular belief, life insurance is not a luxury for the wealthy – it should be a practical and affordable solution for individuals of all income levels. Credit unions could help members access a policy by positioning life insurance as part of a comprehensive financial strategy.
Most insurance providers offer a range of options tailored to various needs and budgets. Term life insurance, for instance, provides coverage for a specified period, offering an economical way to secure financial protection.
With the pandemic highlighting the importance of being prepared for the unexpected, credit unions may want to consider providers who are more flexible in their offerings, both in terms of product offerings and purchase channels. This goes for today, with the aftereffects of the pandemic, but also for future unexpected events.
Moreover, offering life insurance involves not only providing comprehensive coverage but also fostering awareness and understanding of its significance within communities. Through education, outreach and accessible policy options, the insurance industry could play a pivotal role in ensuring that people make informed decisions about their financial future.
Life insurance is a proactive tool that helps aid in the universal human ideal to build a legacy that lasts beyond our lifetimes. Credit unions could help offset members’ financial concerns—now, and when filing claims—by making the right coverage available that might fit any budget. Doing so is one way to continue the industry’s commitment to investing in the communities we serve.
Article by Kevin Cummer, Director, Life Products for TruStage. TruStage is a business partner of the California and Nevada Credit Union Leagues.