More Middle-Class Americans Are Signing Up for Life Insurance
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What is the main topic discussed in this episode?
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Here's your Money Briefing for Tuesday, June 1st. I'm J.R.
What recent data shows life insurance sales rising and who is buying more?
Whelan for The Wall Street Journal. Most people have insurance to cover their health or insurance to cover their car. Heck, maybe even insurance to cover their pet. But many people, especially those in the middle class, often overlook life insurance to cover the unthinkable.
It was so easy for people to start to invest through mutual funds to get to the stock market that many thought, well, why do I need to pay an annual amount to an insurance company? I'll just save on my own and then there'll be money for my spouse to take care of the children.
What are the basic types of life insurance and how does term life work?
But average income Americans who previously felt that life insurance didn't fit their budget are now helping sales grow faster than they have in nearly 40 years. We'll ask our insurance industry reporter Leslie Sism about why after the break.
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Why did life insurance ownership decline since the 1980s?
They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
How did the pandemic change consumer attitudes toward buying life insurance?
The insurance industry often targets wealthier families to sell pricey life insurance policies. But recently, individuals and families from a wider range of income classes have been buying life insurance. That got the attention of our insurance industry reporter, Leslie Sism, and she's with us now to discuss the trend. Leslie, thanks for being here.
Oh, my pleasure. Thank you for inviting me.
Are life insurers now targeting middle‑income households and why?
So before we get into this trend that's going on, this might be an obvious question, but what are the benefits of having life insurance and how does it work?
The most basic type of life insurance is what's called term life. This is a policy that pays out a death benefit if the insured person dies during the period of the policy. That's why it's called term life. Terms usually run 10 to 20 years later. The buyer pays a set amount per year. This is, as it is the most basic type of insurance, it is typically bought by young people, younger people in their 20s, 30s, 40s, and 50s when they are raising children, bought by a mother or father or both parents, so that if one of those wage earners die, there would be a large sum of money that would be available to help that surviving parent pay the mortgage, pay college educations, or cover costs that would otherwise have been funded through the earnings of the parent who's now deceased.
How did employer‑provided benefits and job losses affect individual policy demand?
So it can be a good safety net. But what can you tell us about historic trends here? How common is it for people to have a life insurance policy?
The sale of life insurance to individual households has been declining since the 1980s. That corresponds with the rise of mutual funds as a way for families to invest any extra dollars they have. That is the rise of 401ks and other tax advantage savings programs.
What new sales channels and underwriting changes made buying insurance easier?
So as of the 80s and the 90s, a lot of people who ordinarily would have bought life insurance turned to the mutual funds and their 401 s as a way to save for the future, increasingly people began to worry more about outliving their savings than dying prematurely. And it was so easy for people to start to invest through mutual funds to get to the stock market that many thought, well, why do I need to pay an annual amount to an insurance company?
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:38
2
What recent data shows life insurance sales rising and who is buying more?
0:38–1:09
3
What are the basic types of life insurance and how does term life work?
1:09–1:27
4
Why did life insurance ownership decline since the 1980s?
1:27–2:00
5
How did the pandemic change consumer attitudes toward buying life insurance?
2:00–2:19
6
Are life insurers now targeting middle‑income households and why?
2:19–3:29
7
How did employer‑provided benefits and job losses affect individual policy demand?
3:29–4:01
8
What new sales channels and underwriting changes made buying insurance easier?
4:01–12:06
Speakers
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