final expense coverage

What Final Expense Insurance Agents Should Know About How Consumers Purchase Life Insurance

  • September 17, 2017

A recent 2016 study called the Insurance Barometer explored the various reasons why people do not follow through with purchasing life insurance. Given that final expense insurance is one of the most popular ways for people to cover their funeral and burial costs, it is important for insurance agents to realize how they can market to this particular segment more effectively.

How Many People are Without Life Insurance Coverage?

A majority of people who do have insurance coverage, according to the results of the study, do so because they plan to leave an inheritance to replace lost income or to assist a spouse with paying off the mortgage. Younger generations, however, are increasingly more likely to cite these goals. In fact, outside of final expense coverage, younger generations are more likely to list all of those goals of life insurance. However, for the older generation and more likely the target population for final expense products to begin with, it is important to realize how you can appropriately reach out to this category of consumers.

Even though it might initially seem like the younger generation is not your typical target market, 87% of total respondents in this study indicated that a primary reason for owning life insurance was to cover burial and other final expenses. For baby boomers, that number was as high as 89%, even though 85% of Millennials also listed it as a reason. Some Millennials may be unable to receive coverage through traditional life insurance opportunities and this opens up the marketing options for an agent experienced in final expense.

Of the people who participated in the survey, the majority of consumers have not yet purchased life insurance because they believe that they already have enough, that there are other financial priorities on their plate or that they believe it’s too expensive. One out of three respondents in the study indicated that these are the major reasons why they did not purchase.

With a majority of people putting off buying life insurance because they believe it costs too much, this presents a unique marketing opportunity for agents working in the final expense arena to showcase how final expense can be easier and affordable to obtain. Consumers tend to overestimate the price of insurance policies as a whole. Encouraging people in the market for final expense insurance coverage to consider how the impact of their loss will already affect their loved ones emotionally can also raise questions about how they can financially pass on the gift to their loved ones of not having to worry about burial and other final expense costs.

How Final Expense is Different than Term Marketing

While marketing for term life insurance to a younger generation would involve highlighting that buying early can save people money in the long run, the emotional impact of discussing final expense insurance coverage, its affordability, its relative ease in terms of comparison to a traditional life insurance policy and the fact that it gives a great deal of peace of mind for someone approaching retirement and beyond are some of the key ways that a final expense agent can assist with this purchase and encourage people to take that final step of obtaining a policy. Recognizing that it may be difficult for many people to talk about their own mortality also gives the agent an opportunity to position this conversation about his or her legacy.

Recognizing that it may be difficult for many people to talk about their own mortality also gives the agent an opportunity to position this conversation about his or her legacy.

Leaving something behind and in particular, the cost for funeral and burial expenses allows loved ones to focus on grieving the loss of a family member rather than generating money to pay for the sudden expenses. Funeral and burial costs can emerge relatively quickly after somebody passes away. And without the financial support to manage these, family members may be put in an even more stressful situation.

Many people may not want to discuss the likelihood of their own mortality in the coming years, however, thinking about putting their loved ones in that difficult position and the fact that it is largely preventable through the purchase of final expense insurance broaches the issue in an honest and compassionate way.




About the Author Laura Pennington