Trends in Life Insurance Sales and Marketing

March 28th, 2022 by

When you’re putting your insurance marketing plans together, you need to take these demographic trends in life insurance sales and marketing into consideration. This way you can target the best prospects for the policies you’re selling.

Much of the demographic data comes from Policygenius. According to their data, applicants below age 45 made up the biggest group of life insurance buyers in 2021. They accounted for nearly two-thirds (64%) of policies sold.

This reflects a trend in the life insurance market as a whole.   Mark Friedlander is the director of corporate communications at the Insurance Information Institute. He explains that 2020 life insurance sales were largely driven by younger age groups. He pointed out that there was a year-over-year increase of 7.9% in life insurance sales for policyholders 44 and under from 2019 to 2020. That was the last year for which he has complete data.

The numbers aren’t surprising, given the life stage these individuals are in. Compared to other age groups, people under 45 often have a greater need to own life insurance.

Millennials bought the most and largest life insurance policies

For example, Millennials (currently 25 to 40 years old) and younger Gen Xers are still starting families and buying homes. That means they have the largest needs for life insurance. The older Gen Xers and Baby Boomers are further along in paying off their mortgages and raising children.  They, therefore, have a slightly lesser need for life insurance coverage.

Let’s take a quick look at some of the demographic trends in life insurance sales. We will look at the amount of coverage purchased in 2021. People age 18 to 44 bought the vast majority (84%) of policies exceeding $1 million in coverage.  This group also bought 81% of policies with coverage amounts from $750,001 to $1 million. Older Gen Xers and Baby Boomers — people age 45 to 64 — bought only 16% of policies over $1 million in coverage. Individuals age 65 and over didn’t buy any of these policies.

Compared to other demographics, Gen Xers and Baby Boomers also bought less coverage overall in 2021. Eighty-five percent of policies bought by people over 65 and 87% of the policies bought by people age 45 to 64 were for under $250,000.

Millennials Respond to Direct Mail

There’s a lot of debate as to the best way to reach the Millennial cohort. While digital outreach may seem convenient and the least expensive for you, it doesn’t always resonate with Millennials. In fact, this cohort really like the old-school, hands-on experience of opening and reading something that’s addressed to them.

Studies continue to show that Millennials trust direct mail. Research shows that 90% of Millennials think direct mail advertising is reliable.  Plus, Millennials are 24% more likely to show mail to others, compared to 19% of non-Millennials. This means if they read something they like in the mail, they’re probably going to spread the word.

Millennials enjoy physical mail. According to USPS research, Millennials spend the most time sorting mail (about six minutes compared to the average, which is four minutes), plus they’re opening mail and reading it (at eight minutes versus the average of seven minutes).

Millennials think physical mail is more personal. Let’s face it, our email boxes are overflowing but our physical mail boxes are not. Did you know that 67% of people see physical mail as being more personal than e-mail. Seven out of ten people say they prefer receiving actual mail over digital mail.  Millennials are a great demographic for life insurance marketing.

And, in terms of a mailing list, Millennials are an identifiable cohort. They can be segmented by homeownership, presence and age of children, even birth of a new baby. New Homeowners are also an excellent target market for life insurance sales.

A Multi-Channel Approach Works Best

Your marketing needs to be multi-channel. That is another important trend in life insurance marketing. That means you need to market to the same household through more than one marketing channel. Research shows that millennials respond to a multi-channel approach. Valassis found that 60% of consumers are more likely to make a purchase after seeing an ad when it’s presented across both offline and online channels. 72% of Millennial parents say print encourage them to go online and make a purchase.

That means your marketing needs to move your prospect from physical to digital. While Millennials prefer getting that initial information in the mail, they do enjoy going online to do their research. This is an important demographic trend in life insurance sales and marketing.

In terms of life insurance, many firms have incorporated online applications, e-signature, and electronic policy delivery. There is also a trend towards quicker underwriting, no-medical exams, digital health records – whatever it takes to speed up the process. If nothing else, Millennials do not like to wait!