RGA provides quarterly updates on global product developments, which can be made available upon request. View the Q3 2020 digital newsletter.
The pandemic has heightened feelings of financial insecurity and the importance of life insurance among families.
New research by LIMRA shows six in 10 Americans say they have a heightened awareness about the need for life insurance due to the pandemic.1 A Unum survey in the U.S. shows that 22% of the people covered said the pandemic caused them to consider adding additional life insurance coverage. Several other groups showed a further increase in interest, including households with children (34%), black adults (36%), Hispanic adults (38%), Gen Z’s (38%), and millennials (30%).
According to a recent survey by a large U.K. insurer, a third of U.K. households are now multigenerational. The most common type of household in the multi-generational category is one where adult children are still living at home with parents, accounting for nearly two in five multigenerational homes. ‘Boomerang’ children are grown-up offspring who have returned to the family home after university; they account for a further 11%, and the adult children living with their parents while studying at university or college make up another 11%. Older relatives account for 14% of multigenerational set-ups.
In the U.S., 20% of Americans, or 64 million people, lived in multigenerational households.2 In July 2020, 52% of young adults resided with one or both of their parents, up from 47% in February, according to a new Pew Research Center analysis of monthly Census Bureau data.3
This move towards multigenerational households has led to insurers’ designing more flexible life and health plans to cater to these expanding households. The concept of family is no longer clearly defined.
In response to the current pandemic, many insurers now offer term and whole life products that can be purchased 100% online. No physical exam is required, and these insurers also have digital platforms that enable a potentially instant underwriting decision. JennyLife is a U.S. start-up that provides no-health-exam-required life insurance for women and moms seeking to protect their family’s financial stability.
Many term life policies can provide a one-off payment or a monthly income benefit, in some cases for up to five years. An Indian Final Expense whole life policy offers a cash a payment which can be used funeral costs and to pay unsettled medical bills and credit card balances.
The beneficiary is free to use the money in whatever way they deem fit.
The Toffee Plan, provided by an insurer in India, is an example of a plan that offers health, life, and household coverage all in a bundle, with bite-sized monthly payments. The plan is available on a subscription basis.
In South Africa a Personal Cover combination plan includes a range of options and the flexibility to mix and match them. The options might include life, funeral, disability, illness, or future insurance. Future insurance is an interesting one as it allows offers customers to buy cover in the future without going for medical tests based on their current state of good health. Policyholders can choose to leave a one-off sum of money or provide a regular monthly income to their families. The funeral insurance option offers cover for up to 22 members and an unlimited number of dependent children. Customers who are signed up for the rewards scheme will get percentage of their premiums back in points every month for simply having cover.
Some funeral policies offer a family cover that protects the policyholder, spouse, and up to two children. The policyholder can add beneficiaries with the payment of an extra premium. The administration of claims is through an online platform. In Ghana, the Transition Plus Plan is another funeral plan that pays a lump sum on the death of the policy owner or selected spouse, child(ren), parents, and/or parents-in-law. This plan offers a lifetime coverage after 15 years and a cash back option every three years.
Another type of family product is a multigenerational one. Insurers are aware of the transfer of wealth that is about to happen between baby boomers and the succeeding generations. In response to that shift, there are now products that offer wealth transfer options or income maturity benefits for the family after the policyholder passes away.
Some multigenerational products can allow the policyholder to change the insured person as their financial needs change. These policies also let the insured change the beneficiary multiple times. In addition, policyholders can preselect a succeeding and contingent insured person. Some policies are valid for up to three generations, if the policyholder is diagnosed with a critical illness or passes away. Fortune Bright Saver Life Plan (Hong Kong), the Active Income Plan (India), and the Joint Life Care Plan (Indonesia) are just a few examples of the multigenerational products currently on the market.
Health insurers, too, are now designing plans to cover the whole family. A family can no longer be defined as simply as two adults and two children. Some plans offer coverage for up to seven people and cover multiple generations. Health plans are described as a one-stop health management service for the entire family. These plans are designed to cover family members of all ages from an infant of 30 days to the elderly at 80 years of age. Some plans also contain Health Wallet feature built into this plan to reward customers who stay healthy.
Recent product offering examples in Asia include the Family Guardian Plan (China), Ping An’s Doctor Home Service for families, the Personal Clinic Policy (China), A-Plus Total Health (Malaysia), the AIA 1dapat4 program (Indonesia), and the Kuvera Health Plan (India).
In EMEA, the Bupa Be.Well program includes a range of new health and well-being plans for the entire family (U.K.), and the Family Assistance Plan (Spain) is another example.
The pandemic has highlighted the need for families to consider their financial stability because constant change is the new normal. For insurers it has meant looking at the design of insurance products in a new way. Life and health products need to be flexible and easy to apply for, and they must allow changes to be made in a moment’s notice in response to a policyholder’s sudden change in circumstance. As the definition of family – at least in the context of insurance – continues to evolve and as the long-term effects of the pandemic unfold, insurers must adjust their products accordingly to meet consumers’ changing needs.
Stay tuned for future releases of our quarterly newsletter to see where the next innovations will take us.