What Agents and Advisors Can Do About the Life Insurance Coverage Gap

Not enough people understand the value of these benefits or of company matching, so we see a gap there for underserved communities.

Why do you think the gaps exist, and persist?

I think a lot of the gap is a result of exposure: Whether or not you were exposed to these products, and whether these types of financial conversations are held in the household.

I think another part of the gap is about prioritization. Even if people are aware of these products, are they prioritizing them in a way that protects their families and meets their needs?

Certainly, income, net worth and things like that have an impact on how much these products are utilized, but the truth of the matter is that much of the gap comes from a lack of any utilization altogether.

How do you think efforts to close the life insurance gap could affect any retirement planning and annuity gaps that you see?

I don’t know that I believe both gaps need to be addressed together — life insurance and retirement planning — but, again, I think our challenge is that, far too often, neither gap is being addressed.

Life insurance is certainly not only a wealth-building tool but a wealth-transfer tool, whereas retirement planning tends to focus specifically on better quality of life in retirement.

So, again, it goes back to the very distinct needs of the consumer.

But gaps do exist in both, and both need to be addressed.

What can agents and advisors do to reach workers who may be in danger of letting voluntary coverage purchased at the workplace lapse?

In the same way people need to prioritize getting life insurance, they need to prioritize keeping it. That’s a message that agents and advisors should be sharing with their clients.

It’s important for agents and customers to review clients’ policies annually, to ensure that the policies still meet the clients’ needs and that those needs haven’t changed.

Pictured: Stafford Thompson Jr. Credit: Lincoln Financial