Marketing to the Middle Market – the Untapped Advantage for the Life Insurance Industry
The middle market ($35,000 – $100,000 income) represents a huge opportunity for life insurance companies. According to research by LIMRA and Epsilon, 68% of insurers said that the middle market was their top priority, and 73% said that the middle market will be their top priority in the future. Yet reaching and acquiring this population is an ongoing challenge. CU Insight released some key insights regarding this market:
- Life insurance agents are not calling on the middle income market ($35,000 – $100,000 income), they can’t afford to do so.
- The middle market may have a higher need for life insurance than wealthier families because they are heavily reliant on multiple income sources and don’t have a lot of assets to provide for them if one of the wage earners dies.
- Life insurance can provide surviving family members with the means to maintain their quality of life.
- Employers are a shrinking source of benefits such as life insurance and people can no longer rely solely on their employers for benefits such as life insurance.
- An unexpected accident or illness can render people uninsurable.
Here are 3 ways insurance marketers can ramp up their middle market acquisition strategies.
1.) Educate Your Audience
The middle market needs to be educated about life insurance — what it does, what it costs, and how it fits into their overall financial planning — before they will buy it. LIMRA conducted a study in which they found that knowledge about the product is the first or second most important factor for almost half of consumers. In fact, one-third hold back from purchasing because they didn’t know what or how much to buy.
LIMRA provides some excellent discussion topics to help educate this target market. Educate your middle-class clients to these facts of life (suggested discussion prompts):
- Premature death can be financially catastrophic to a young family (ask if they know of anyone that has died before age 40)
- Their insurability may be negatively impacted at an early age by an unexpected accident or chronic illness
- Premiums can be locked in at a lower rate the younger you are
- The death benefit is typically income-tax free and is usually available within 10 working days or less of notification of death to the carrier.
- Owning life insurance probably costs less than perceived. Younger individuals surveyed thought premiums were three to seven times higher than what they actually were.
2.) Provide a Personalized Experience
According to the LIMRA study, “Nearly two thirds of middle-market consumers said trust is more important than price when buying life insurance online or direct (by mail or phone.) By contrast, when buying face-to-face 55% said price is more important. While 6 in 10 middle-market consumers prefer to meet face-to-face with an advisor, more than half acknowledged the difficulty in finding an advisor they could trust.
Nearly three quarters of the middle market said good reputations for service and for claims payment were the most important factors in choosing a life insurance company. 48% said the company brand was of high importance to their choice in companies.”
Insurance companies must think beyond the transaction to focus on the customer. They must ask themselves, “how can I be a partner in helping my customer establish financial security, live the sort of lifestyle they desire, or prevent losses and act more quickly when events occur?” This includes offering entails personalized services such as:
- Offers based on customer needs and products that they already own.
- Messages that customers find relevant and that build on their relationship and previous interactions with the insurer.
- Pricing that dynamically considers customers’ behaviors, usage and loss-prevention measures taken.
- Recommendations and incentives to prevent losses or reduce loss severity.
3.) Target Based on Life Events
Identifying consumers experiencing life changes and asset changes significantly increases the likelihood of consideration of an insurance marketing message. These may be events such as newly married, expecting a baby, or a change in one’s financial situation.
According to a report by Deloitte, the most impactful events where a high percent of surveyed buyers indicate importance include:
- Having children (43%)
- Buying a home (35%)
- Change in financial situation (33%)
- Marriage (28%)
Image Source: Deloitte
The insurance industry has the capability to make significant inroads with the middle market and reach potential customers entering their prime life insurance buying years. However, tapping into the middle market involves a customer centric mindset to target this audience though education, personalization, and right time messaging.
To learn how to reach the insurance prospects most likely to purchase at the right time and through the right channel, download this free Data-Driven Marketing guide for Insurance companies.