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Industry Outlook | What You Need to Know

The Life Insurance Industry Has Changed a Lot in Recent Years, Benefiting the Consumers.

The life insurance industry in the U.S. has always been a fast-changing and highly-competitive sector, but a recent report suggests that things are bound to get more exciting for the industry from 2013 onward. Major technological, social, environmental, political, and economic changes are anticipated, and companies as well as consumers would do well to take full advantage of all the new opportunities emerging in the industry.

Apart from the challenges that life insurance companies have to contend with, such as inflation or sudden shifts in the economy, they will also have to brace themselves for new market trends that could have significant impact on their business. Among these trends is the growth of the aging population, and the increasing demand for life insurance with savings solutions. There are new measures and analytics that will enable insurers to design life insurance products of minimal complexity to meet the needs of the consumers. Government cutbacks on welfare are on the rise, increasing the burden on life insurance decisions on the part of consumers. The movements in the economies around the world and advancements in the medical arena, such as personal genomics and wearable health monitoring gadgets, combined with the climbing costs of medical care has encouraged pro-active health programs and improved well-being.

Consumers have more to contemplate when buying life insurance, and they need companies that can handle, rather than just react to these sweeping changes. Insurance companies would have to concentrate on breaking down their products into easily understandable forms so that consumers can easily make the connection and realize their need for life insurance during the sales presentations.

Life insurance is on a down trend in developed markets like the U.S. even before the financial crisis of 2008. Consumers would have to return to seeing life insurance as a necessity rather than just an investment that they can opt out of. As the U.S. witness the Baby Boom generation enter retirement, the shift in focus to retirement solutions has somehow overshadowed the need for life insurance. This growth in interest for retirement over life insurance has trickled down to the younger set of people in their 20s or 30s, which would have been the ideal time to think about life insurance.

Life insurance, whether term or universal life, plays a significant role in income replacement should the policyholder pass away. This is especially important for a young family that has more expenses to pay off. Life insurance benefits can be applied not only to the medical bills of the deceased and their funeral and burial expenses, but also to cover the day to day expenses of the loved ones left behind, their mortgage payments, tuition fees for the children, and a small nest egg to rebuild their lives if the person who died is the primary income earner.

It is easier to get life insurance these days as insurance companies are going out of their way to reach the market. These companies are tapping all possible distribution channels, including business offices and other middle markets. The insurance policies have all been enhanced to offer more value to consumers. But if it is your first time to buy life insurance, you may want to get if from a company that will walk you through all the information you need to make an informed decision. Good insurance companies make a great effort to educate consumers on why they need life insurance and just how much life insurance they need. Insurers would have to be as good as financial services providers who can easily convince people to invest in their financial products.

As a consumer you need to be able to take control of your life insurance and other financial planning needs. At the moment the best quality of information that consumers can use for planning their finances is the one coming from insurance providers. The advice should be available whichever way you decide to purchase your life insurance plan. These days most transactions take place over the Internet and life insurance policies are no exception. When you plan to purchase online, you need to be able to do so with a website that has ample information on their insurance plans. You should be able to have a lot of options to choose from. Take at least three premium quotes from three different insurers. Make sure though that you are comparing “apples to apples”, meaning the quotes would have to be for the same level of coverage. Oftentimes low premiums do not necessarily translate to better quality of coverage. There are other factors to consider such as the history of the insurance providers, the size of their operations, their record for paying insurance claims, and more.

The life insurance market has definitely changed and it is for the benefit of consumers. This is the best time to take charge of your financial needs. Be sure to make your research and obtain all the data you need before making a decision.