Other articles in this series:
- The Mystery of the Life Insurance Middle Market
- The middle market needs life insurance more than anyone
- Why has everyone been overlooking the middle market?
- Targeting the Middle Market — Where They are and When They Need it
Life insurance’s middle market is large, estimated to represent $12 billion in opportunity. But each household represents such a small fraction of this number that it simply hasn’t been cost-effective for life insurers to sell to them. This has led to a gap in the life insurance industry, where the consumers who most need protection are the least likely to have it.
Why does the middle market need life insurance more than anyone?
The middle market, defined as households with incomes of $50,000 to $200,000 a year, primarily lives paycheque to paycheque. Some surveys estimate that 55% of Americans live paycheque to paycheque. More than half of Canadians are within $200 a month of being able to meet their debt obligations. And they often carry a significant amount of debt, with student loan debt reaching over $1.5 trillion in 2018.
This combination of subsistence living, low savings, and high debt could spell disaster for a young family if one partner were to pass away. This is also true because a component of this paycheque-to-paycheque existence is the dependence on two incomes. In 66% of American households both parents work. If the family were to lose one partner’s income, it would result in a drastic change in the remaining partner’s quality of life. In addition to this, the middle market doesn’t have assets that they could tap for income replacement or to settle debts.
The middle market needs life insurance for the same reason that they have been less cost-effective for insurers to reach; they are less financially stable and have fewer assets and would be more negatively impacted by the loss of one partner’s income. Breathe Life’s Self-Serve Module makes it possible and profitable for life insurance providers to reach this underserved market by moving online and cutting acquisition costs.
The reasons that the middle market so desperately needs life insurance make excellent selling points, but first, you have to reach them. When surveyed, 82% of the market said that getting a quote online influenced their purchasing decision. Partnering with Breathe Life helps your company get online faster than trying to develop digital platforms on your own. It’s not only good for your bottom line; it’s good for those you seek to serve.
We believe that the financial security and peace of mind that life insurance offers should be accessible to all families and all markets.
Stay tuned next week as I go deeper into why this market has been overlooked.