Life Insurance: The New Retirement Strategy

Sponsored by CUNA Mutual Group

It’s no secret that our world is changing. Thanks to Amazon’s pursuit of more speed and simplicity, the online retailer has played a large part in making instant gratification the norm. We see this effect spreading well beyond ecommerce. Today, consumers—regardless of demographics—want the same speed, ease and simplicity in all their transactions as they can get when shopping with Amazon. 

It’s also no secret that life insurance is critical to your core offering. For credit unions, offering life insurance is a unique opportunity to protect more members and strengthen long-term relationships. Keeping life insurance simple will help credit unions satisfy members and reap the benefits of member loyalty for years to come. According to LIMRA’s 2017 Insurance Barometer Study, 65 percent of consumers are willing to pay more for simpler experiences, and 61 percent are more likely to recommend a brand that made things easy for them.

What you may find surprising is that Forbes magazine has listed “supplementing retirement income” as one of the top five reasons respondents purchase life insurance, with more than half of survey respondents mentioning it. The top reason was “to cover funeral and final expenses” with 85 percent and behind that came “help replace lost wages/income of a wage earner” (67 percent), transfer wealth or leave an inheritance (63 percent) and help pay off mortgage (54 percent).

Life insurance has the potential to be so much more than originally intended. It can be used to ensure that there is enough money to replace any lost Social Security or other retirement income. In this way, the surviving spouse can maintain the current standard of living throughout retirement.

Unfortunately, many people do not fully understand nor appreciate the value and benefits that life insurance can represent as part of a retirement plan and fall well below what they’ll need. On average, CNBC reported in March, Americans between 55 and 64 years old have saved only 12 percent of the $1 million for retirement that experts recommend. According to the station’s June 2017 reporting, a clear majority of Americans have under $1,000 saved for retirement, while half of them have nothing saved at all.

Knowing what drives consumers to purchase will enable you to develop products and deliver services that fulfill those needs. In turn, your credit union has greater potential of winning at the life insurance game. 

Chuck Sutton is product management director, life & annuity solutions for CUESolutions platinum provider for executive and employee benefits CUNA Mutual Group, Madison, Wis. Download the “Simplify to Simply Stay in the Game ” report for useful and illuminating insights about the trends impacting the insurance industry that credit unions can use to help inform decisions and guide business practices.

Learn more about CUNA Mutual Group’s executive and employee benefits plans solutions.