4 Myths About Digital Transformation in Life Insurance

It’s the 2022 trend you shouldn't ignore
circle graphic with agent on the phone
Reservations about making the leap to a digital business model?

You’re not alone. Many agents remain unsure if digital sales are a threat or an opportunity. Let’s break down four common myths and reveal how digital transformation in life insurance can help you grow with confidence in the new year.

Myth 1

Digital sales will come between me and my clients.

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Fact: Digital platforms can connect you with your clients—and help you find more.

According to LIMRA, life insurance purchase intent increased by 31 percent since the pandemic began. At the same time, the new challenges of in-person contact changed the way life insurance is sold.

Consumers have migrated to online channels for more of their needs than ever. When it comes to life insurance, a whopping 98% of financial services companies now say their customers want to shop online. 

Actual sales data drive home the point: today, less than one-third of people who buy life insurance do so in person—down from 44% before the pandemic. In 2021, life insurance was a top online insurance purchase category globally, second only to auto insurance.

What to look for: minimal case work, maximum connections 

Online life insurance sales platforms offer agents the ability to meet increasing demand for online-only life insurance sales, with no in-person meetings and no medical exams. Half of consumers say they’re more likely to buy life insurance through automated or simplified underwriting vs. traditional underwriting.

Look for a sales platform that helps you minimize casework and maximize your client connections. For instance, Ethos, a leading online life insurance company, offers your clients top-rated life insurance coverage and handles 100% of your case work. That means you can protect more American families, while freeing up as much of your time as possible to pursue new leads.

Once you’ve settled on an online sales platform, digital marketing tools can connect you with online leads to supercharge your business. For example, the agent program at Ethos offers pre-approved digital ads, email templates, a step-by-step Facebook lead generation guide, and ongoing support through webinars and one-on-one consultations.

What to look for
  • Online-only sales
  • Zero casework
  • Top-rated carriers
  • Digital marketing support
Myth 2

It’s complicated to digitize the way I do business.

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Fact: Partnering with the right insuretech provider makes it easier.

Many agents are concerned they need a technical background to succeed online, and worry about having to learn a new sales platform. Some may wonder if an online process would present too much of a learning curve for their clients—and whether they would be able to help their clients resolve any issues. 

What to look for: speed & simplicity

The right insuretech partner can present agents with a system that’s easy to use, backed by a team that’s ready to help. 

“Agents are often surprised when we sign them up, because it only takes five minutes to become an agent partner, and they can quickly generate quotes and get coverage for a client in as little as 10 minutes,” says Troy Thompson, chief actuary at Ethos. “Prior to Ethos, agents and agencies would have to wait days or even weeks, with lots of paperwork and wait times for processing, to solidify a partnership with a provider. But we’ve made the entire process simple, easy and fast for all involved.”

The right partner should offer a comprehensive platform of tools and support that makes digital sales easy. Look for online quoting tools, performance insights, sales strategies, and marketing support that make it easy to apply your selling skills to the digital world. 

Finally, look for a sales process that leaves you and your customer in control. For instance, Ethos lets you provide your clients with a personalized quote, see exactly what they see, and help them complete the application in minutes.

“Agents are often surprised when we sign them up, because it only takes five minutes.”
Troy Thompson, Chief Actuary at Ethos
Myth 3

It’s harder to know what my client will get approved for through a digital process.

person holding family in arms graphic

Fact: Your client is more likely to be approved online, faster, and at competitive rates.

Agents worry that digital sales will leave them in the dark about what’s happening with their customer. Have they been approved? For which product? How long will it take?

The right online insurance provider will offer underwriting transparency throughout the client application process—with higher approval rates and significantly less hassle than traditional carriers. 

What to look for: high approvals & competitive rates

Behind-the-scenes AI-driven decision making technology can crunch thousands of data points in moments, bypassing the need for an intrusive, time-consuming and potentially risky in-person medical exam. 

The result is more coverage options, faster. If your client isn’t right for one type of coverage, Ethos, for example, will determine eligibility on the spot and offer another option that fits, with the ability to cover 90% of Americans aged 18-85. The end result is more policies sold, and more customers whose families are protected from financial loss in the event the policyholder’s life goes unscripted.

Finally, in the past, “no medical” used to mean “higher rates” and sometimes even “unknown carriers.” Today, healthy people can obtain online life insurance coverage at rates competitive with traditional, fully underwritten products—from A-rated carriers. Customers who expect speed no longer have to sacrifice price or quality.

Myth 4

I can survive without it.

person laying on cloud graphic

Fact: Competitors will use digital transformation to scale past you.

Successful life insurance agents may wonder, why fix something that isn’t broken? 

Even if traditional methods continue to generate new business, finding a way to incorporate powerful new digital transformations in life insurance will position you to stay competitive in 2022 and beyond.

After decades of attrition, the current industry sales outlook is buoyant. Annualized premium rose 15% and policy sales increased by 11% in 2020, but growth was concentrated among companies offering a seamless digital experience. According to LIMRA, providers who offer accelerated underwriting, advanced technologies and customer-friendly processes are continuing to thrive. 

A recent McKinsey report drives home the news: there’s no turning back. “Over the next decade, the fully tech-enabled insurer will bear little resemblance to today’s organization,” say the authors, pointing to applied AI and automation as the driving forces of future growth in personal life insurance.

What to look for: customer-focused innovation

Today’s insuretechs offer powerful new solutions to two age-old problems — how to accurately assess risk and provide coverage in a timely manner. The best online providers apply AI and other technologies in new ways to solve these problems in record speed, saving agents time and making customers’ lives easier.

“Over the next decade, the fully tech-enabled insurer will bear little resemblance to today’s organization.”
McKinsey, How top tech trends will transform insurance, Sept. 2021
Make 2022 the year you embrace digital transformation in your business.
Visit Ethos today and find out more about the industry’s top online sales platform for life insurance professionals.