COVID-19 changed consumers’ lives forever — in a multitude of ways, including how they perceive insurance. In particular, ReMark’s 2021-22 Global Consumer Survey (GCS) found that changed attitudes about insurance were due to consumers’ concerns about risks to their lives and health, but there were also other changes. By diving deeper, we can understand what exactly it was about the pandemic that led to this shift.
1. Interest in Protection Products
If you compare daily COVID-19 deaths in the U.S. (as reported by Johns Hopkins) with life insurance purchases tracked in the MIB Life Index, there is a clear correlation between the two. This suggests that COVID increased consumers’ general interest in protection products. Furthermore, the link was stronger still in people who were personally affected by COVID — the GCS found that 71.8 percent of people who had a friend or family member die of COVID changed how they thought about the risk and value of life insurance.
Since this occurred despite the economic hardships many people faced due to the pandemic, it is likely that sales of other protection products also increased. This includes disability insurance.
2. Increased Self-Sufficiency
COVID grew people’s awareness of the need to be self-sufficient. Everything from a lack of free movement across borders to layoffs and employees put on furlough showed consumers that they cannot rely on the systems in place to provide for them when the whole world is in turmoil. In regard to insurance, this means having policies that are not linked to an employer — as a lost job leaves the person without coverage.
A solution is portable insurance, which is an option for voluntary insurance products like disability insurance. Portability means employees are able to keep their insurance policy even when their circumstances change and they stop working for the same company. This applies not just after a layoff or during furlough but also if an employee relocates, retires, or takes parental leave. Portable insurance tends to be affordable, as, despite leaving the group, the former employee retains group premiums.
3. Reliable Paychecks
When crisis strikes, having a reliable paycheck matters. This is the reason why the government launched the Paycheck Protection Program during the pandemic. It enabled businesses to receive a loan backed by the Small Business Administration and therefore keep more of their workers employed. Some borrowers even qualified for loan forgiveness.
Another form of payment protection is disability insurance: it covers those who are unable to continue working due to an accident or illness. The difference is that, whereas the Paycheck Protection Program ended on May 31, 2021, these paycheck protection policies (otherwise known as disability insurance) are always available.
4. Digital Identity
Guidewire Software ran a survey in the UK to find out how consumers’ attitudes toward insurance changed at the start of the pandemic. Although 73 percent of respondents named their digital identity as their most important asset and 61 percent their job and income, only 6 percent had coverage for either.
This demonstrates the importance of ensuring consumers are aware of the insurance products available to them. People may not purchase products like online identity insurance, job loss coverage, and disability insurance simply because they don’t know that such coverage exists.
5. Contactless Signup for Insurance Products
During the pandemic, it was necessary to be able to sign up for insurance products without having physical contact with an agent or broker. GCS found that preference for contactless channels increased by 74 percent in just one year. Although contactless is no longer a requirement, the shift has become permanent. In particular, people who have now adopted contactless methods are unwilling to return to their old ways.
Attitudes that changed during the pandemic are likely to have long-lasting (if not permanent) effects. The GCS discovered that Millennials were the age group most changed in their opinions about insurance — and they are a group that will be in the market for insurance for a long time. As we have seen, though, awareness and availability (through contactless channels) of insurance products is key.
All these factors mean that right now is the ideal time for agents to offer clients and prospects disability insurance. Contact Disability Insurance Services to get started.
