On Trend: The Coming Disruption to Life Insurance Could Make It More Relevant to Your Clients

Written by: Shileen Weber

Don’t count out life insurance as an investment for your clients just yet.

According to those who participated in our Advisorpedia/ETF Trends webinar on Dec. 7, it is an important element of financial planning for more than 96 percent of their clients. But, there are some changes that clearly will have to come, mostly around the need for a more streamlined process of buying the product that could make life insurance cheaper and, as a result, more relevant than ever before.

GWG Holdings’ insurtech subsidiary, Life Epigenetics, conducted the webinar to explain how epigenetic technology can alter the way life insurance is underwritten, priced and sold. More than 360 advisors signed up to hear the latest about how epigenetics could possibly streamline the application process and cut the price of life insurance.

It’s been a tough 30-plus years for life insurance, the once dominant product in financial services. Sales of individual life-insurance policies have declined more than 40 percent since the 1980s, according to industry trade group Limra, and about 30 percent of U.S. households report having no life insurance at all, up from 19 percent in the earlier period.

Advisors and insurance agents are concerned that younger generations are even less interested in life insurance or that will be an important part of their financial lives, especially as Social Security and other safety net programs may be reduced as the U.S. deficit grows.

The webinar Life Epigenetics conducted was called “technology that disrupts the life insurance industry” and our CEO Jon Sabes and Chief Science Officer Dr. Brian Chen discussed how a saliva sample could upend life insurance underwriting, something that’s never been done before. Life Epigenetics is using a technology licensed from the University of California, Los Angeles to apply lifespan predictive technology to insurance.

The promise of the technology, Jon and Brian offered, was that a saliva sample could make it easier to apply for and underwrite insurance.

The webinar met an engaged audience of advisors who submitted a range of questions about how it could make a difference in their practices. Those who answered survey questions during and after the webinar identified price as the most important determinant for the purchase of life insurance. And, they responded in two ways to questions about how a reduced price could lead to greater sales:

More than 65 percent of the respondents said they or their clients would be very likely to submit a self-administered saliva sample if they could get a better price for life insurance.

More than 81 percent said a more streamlined process that included a mailed-in saliva sample would make them or their clients more likely to buy life insurance.

It was a very strong confirmation of the trend the life insurance industry is beginning to explore: using non-traditional ways of underwriting to sell its product. And, the Life Epigenetics’ approach is just one of those approaches that include other ways to analyze and price life insurance.

Download our Webcast on the new Genetics—Epigenetics: Click this link to Listen On-Demand!

Some of the most surprising responses to the survey were in the awareness of this technology and its application in everyday lives. While only 29 percent had heard of epigenetics, nearly 20 percent had used a service like 23 and Me or Ancestry.com to analyze their own DNA. That’s an amazing amount of participation for a capability that is less than ten years old.

Shileen Weber is Senior Vice President of Marketing and Communications for Life Epigenetics and GWG Holdings in Minneapolis.