September is Life Insurance Awareness Month

Written by: Ron Scheese

When meeting someone new, I am often asked the question “What does Andesa do?”

My typical “elevator speech” response flows along the lines of something like:

For nearly 40 years, Andesa has provided software and services to the life insurance industry.  You would not have heard of us, but you would certainly recognize the names of our clients. 

 Many life insurance companies struggle with older systems. Sometimes they have non-strategic product lines (policies they no longer sell but must still service).  Sometimes the products or policies involve complex calculations or tracking of investments to determine their value, commission amounts or claims.  And, quite often, they want to grow their business through the development of new strategic products.  All of these endeavors are made more difficult and costly due to the time required to modify their existing systems.

 Our approach and solutions help those companies reduce the costs of maintaining their old systems and become more efficient by eliminating many manual work arounds and errors.  Because our systems are flexible and configurable, we can also help a carrier accelerate a new product launch and at a lower cost.

That is technically what we “do”.  But when I think about that question through the lens of Life Insurance Awareness Month, what we do is quite simple, we help our clients insure you at your most vulnerable time.  Life insurance matters, and what we do matters to the life insurance industry. We love to help our clients achieve their goals and potential.  And we love that our clients protect you.

Life Insurance Awareness Month was started in 2004 by the non-profit organization Life Happens.  A tremendous resource for the consumer, Life Happens is dedicated to encouraging consumers to take personal financial responsibility through the ownership of life insurance products.  They provide high quality, independent and objective information for people who seek help with their insurance buying needs.

Life insurance is a key element in feeling financially secure. Though used for many things, the main purpose of life insurance is to provide financial protection.  Whether owned by an individual or a business, life insurance helps ensure that a family or a business is financially secure after the death of a key  individual.

Why would a business need life insurance? There are many uses for corporate-owned life insurance, not the least of which is to serve as the cornerstone of a business’s succession plan at the death of an owner or key individual.  A business that owns a cash value based life insurance policy can also borrow against the accumulated cash value of the policy to help the business in uncertain economic times or provide supplemental cash flow for investment purposes.

Since January 2020, interest in life insurance increased as the pandemic unfolded.  Despite this surge in curiosity, far too few in our society secure financial protection through life insurance. Some surprising statistics from the 2022 Insurance Barometer Study published by the Life Insurance Marketing and Research Association (LIMRA) and Life Happens are:

  • Nearly 129 million Americans (nearly half the population) say they do not have enough life insurance.
  • More than 4 in 10 families would face fi­nancial hardship within six months should the primary wage earner die, and a quarter would struggle ­financially within a month.
  • More than half of Americans overestimate the cost of life insurance by as much as threefold. This is especially true for younger generations.
  • Not surprisingly, the largest percentage of coverage gaps appear in the youngest age groups and lowest-income segments.
  • Latino/Hispanic and Black/African American consumers tend to be more uninsured or underinsured compared to white and Asian/Pacific Islander segments.
  • LIMRA estimates there is a $12 trillion mortality coverage gap in the United States.

The life insurance industry is a noble industry.  Many of our insurance company clients have provided value and comfort to families and businesses in their most vulnerable and challenging hours of need for over a hundred years.  We may live in an instant gratification society, but when it comes to entrusting a company with my family’s or business’ well-being in my absence, I admire an industry that will endure and be there when I need it most.

Clearly there is work to be done on the awareness and education front to address financial literacy and ease the access to life insurance and its associated benefits.  The solution is part high tech and part high touch. Personalized digital educational and awareness strategies working in concert with tried-and-true advisor and referral networks offer an opportunity to address this disparity in financial protection.   I have no doubt members of the life insurance industry will continue to support one another and strive to address the mortality coverage gap in our nation.  And, Andesa pledges to stand alongside our clients and work together to be part of the solution.

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