RICHARDSON, Texas—Some credit union members, most especially young members, believe it isn’t easy to obtain a life insurance policy, according to one person.
Millennials, especially, feel “life insurance is just too hard to get,” says Greg Hagan, senior vice president, sales, for Institution Solutions here.
In fact, many of those same members are often under the mistaken impression purchasing insurance means a trip to the doctor and a blood test, he said
Hagan’s remarks are part of a CUToday series on “fake news,” credit union myths or misperceptions that need to be talked about and thought through.
Term life insurance is pretty reasonably priced, Hagan said, at about $225 a year for $250,000, or less than $20 a month. And about $500 can buy a $500,000 term policy.
Things are different now from a generation ago, he suggested, when a student would graduate from college and take his or her father’s advice to go to a local insurance agent and get a starter policy. Even today, 64% of term life policies are for $500,000 or less, he said.
Millennials can be reluctant to spend money on anything, he acknowledged, and are a result “are really very underinsured.”
And then there’s the broader issue: “It’s a different philosophy. They don’t feel they need it. So, how do you convince those folks?”
According to Hagan, affordability is one strategy. Ease of access is another. Offering e-commerce and e-delivery are also good ways to attract millennials, he said.
And it is working. Term life policies have increased by about 20% since 2008, and most of that is through the 25-50 age group, said Hagan, whose firm sells insurance through credit unions to their members.
Greg Hagan
As an example, an Institution Solutions product called LifeVUE is designed to appeal to Millennials, offering “e-application, e-underwriting, e-signature and e-delivery,” Hagan said.
'They Like That'
“It can all be done in 30 to 40 minutes from a smart phone or computer,” he explained. “Keep it simple. Keep it easy. Let them do it with clicks. They like that.”
Marketing to younger members can be done through both e-mail and standard mail, Hagan said, alhough e-mail is less expensive and can be targeted to “that age that needs a life insurance policy.”
Meanwhile, said Hagan, a second credit union member myth he often encounters is “that all warranties are a rip-off.”
He concedes that the high-pressure tactics to sell warranties at the point of sale are pretty off-putting. He suggested a better option is to get a comprehensive warranty on all electronics a member might own.
Institution Solutions offers FutureProof, which provides such warranty coverage for about $30 a month. It is not a home warranty, but the product covers a significant number of potential devices and equipment a member might have.
“Wouldn’t it be nice to cover all electronics in your home?” he asked.
Not just the living room television and the stereo, but items such as wifi routers, thermostats, multiple televisions, tablets, audio chargers, projector screens, home office equipment like scanners and printers, digital cameras, baby monitors, video games, smart devices like door locks and garage doors, water sensors, carbon monoxide detectors, Apple watches and others. In all, about 40 electronic items are under the one warranty.
Institution Solutions has about 600 credit union clients and 25 employees. Though it does have a few bank customers, Hagan says 98% of its clients are credit unions.
—Mark Fogarty