Updated September 22, 2023, at 3:50 PM
When thinking of 2020, it can be hard to find anything positive out of what proved to be one of the most challenging years for our country, and for our purposes, the financial services industry as a whole.
However, two main benefits were born out of that difficult year: one, it pushed us to truly embrace technology, and two, the innovation of life insurance underwriting. Both being very positive for our industry. Let’s take a closer look at these two benefits and what they mean for us going forward.
Tech More Important Than Ever
With 2020 came a massive evolution in our country, one that saw technology become a part of everyone’s daily lives more than ever.
Most of my private clients who were marketing and presenting via live events, mostly to the senior market, could’ve never dreamed about using technology to do the same thing. Frankly, most of their consumers didn’t even know what video conferencing was. Overnight, technologies like Zoom became the only way for their clients to communicate with their families visually, so they became familiar with how it operates.
Now, we see it as one of the primary sources for holding events, appointments, annual reviews, and more. Tech solutions are an efficient way to stay in front of your clients and one that’ll cost significantly less. People ended up loving the idea of meeting virtually, which became evident as we embarked into this new world back in March 2020.
When we assisted our clients in holding their first virtual seminars, many consumers would ask, “Where has this been?” The thought that they didn’t even have to leave their house to get the same information as if they were in person just seemed like common sense. Not to mention, the financial professional didn’t have to rent a venue, didn’t have to provide free dinner—they didn’t even have to leave their house, either!
With an emphasis on virtual sales came a laser-sharp focus into our clients’ virtual footprint. Website upgrades, landing pages, videos, online seminars, and social media advertising have almost become the norm. Of course, these have been around for years, but they became the only way to continue doing business. And it became overwhelmingly used by the masses. In effect, it forced everyone to embrace all-things digital and now we’re wondering why we didn’t do it sooner.
Overdue Underwriting Innovations
Secondly, it was great to see the medical underwriting innovation in 2020. My roots are in the life insurance space, and I have a passion for this side of the business that’ll always exist. I’ve made it a mission to help educate and build the foundation of knowledge around life insurance for my private clients so they can present to their clients and help families.
The biggest argument (and battle) I have with getting financial professionals to buy into life insurance as a solution within their offerings is medical underwriting. You always hear the horror stories of cases going wrong—and in some cases losing clients—because a case is declined or heavily rated. I wanted to touch on this because as COVID-19 took over our country and everything began to shut down, the life insurance space came to a screeching halt. Without the ability to perform paramedic exams, there was no way to get approvals medically. The carriers had to act fast, or they’d see a significant reduction in business.
Accelerated underwriting has always existed, where you could take an application and the carrier would do a quick background check, and as long as nothing came up, you had approval. These were reserved for lower face amounts though, in most cases, up to $1 million of death benefit maximum. We saw carriers changing this offering and allowing accelerated underwriting at death benefits as high as $3 million. I hear from internal resources at the carriers that after evaluating their ratings, they weren’t far off from what they offered when they had to go through full underwriting.
Simply put, they realized this process works and now know to offer it going forward. And most importantly, they’ll continue to evolve around it. This is an excellent direction for the life insurance industry. Underwriting innovations will allow for fewer costs to the carrier, which will lead to better-priced products. It’ll also mean less time in the sales process for financial professionals, and most importantly, fewer headaches for the client.
Even though it was an extremely tough year, some silver linings came out of 2020. It changed the way we do business for the better. And as a huge advocate for technology and ease of doing life insurance business, I’m glad to see it!