REDDING, Calif. — LifeHelp Chairman/CEO Henry Cuenca says credit unions still aren't recognizing the knock of opportunity life insurance presents.
"We don't know of anyone that really understands the landscape or dynamic of life insurance in the credit union marketplace–this area is where we get our energy and vision so who better to make credit unions aware of this underserved niche they can fill," said Cuenca.
The full service insurance agency and third party administrator recently released a report entitled Uncovered and Out in the Cold: Middle America's Unmet Need for Life Insurance, and the Role of America's Credit Unions that finds many working-class Americans are not being reached by the insurance industry.
"There is a crisis in the nation's middle-income and lower-income households who are not being offered the life insurance they want and need and for many, credit unions may offer the last hope," said Cuenca. "Helping a member be better prepared to handle the financial stresses that come with the death of a family member can make all the difference and help credit unions distinguish themselves from the competition."
According to the report, some 68 million Americans are without life insurance and with many of the uninsured primarily interested in inexpensive term insurance they are not viewed as "cost-effective" prospects. Of those households that recognize they need more life insurance, 45% plan to buy some in the next 12 months, but many in the $25,000 to under $75,000 annual salary range
have not received information
on life insurance that relates to their needs.
"You are talking about a segment of America that is typically living paycheck to paycheck with the basic need of a small policy ranging from $5,000 to maybe $80,000 that doesn't know where to turn," said Cuenca. "Unfortunately, today, the single most important criteria for the majority of investment advisors in determining who their next prospect will be is affluence–so where does that leave someone who can only afford to spend $20 a month on a policy?"
He adds that not only can credit unions build community goodwill by being a life insurance resource but the move can also help generate non-interest income.
According to the report, as the U.S. population ages the ability to cover the cost of final expense will become a greater issue. The report finds that even among seniors with little or no debt, and no plans to pass on a significant life insurance asset, many would like to have a small amount of coverage to help their families pay final expenses and remaining medical costs.
"In addition, it is estimated that from now until 2025 someone in America will turn 60 years old every seven seconds. With the 50-74 age group making up some 30% of today's typical credit union membership, the potential for programs specifically designed to help meet the demand for final expenses coverage among this segment is poised for growth," states the report.
"What those uninsured households want is to buy from a trusted source who offers simple, straightforward solutions without the high-pressure sales pitch that best meet their needs," said Cuenca. "And who can they trust more than their local credit union? Credit unions that can make it easier for members to buy the basic life insurance they want at rates they can afford will not only strengthen member relationships but also create a steady new stream of non-interest income."
–mdigiovanni@cutimes.com
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