Pacific Life Insurance Company |
PACIFIC LIFE INSIGHTS | THOUGHT LEADERSHIP IN ACTION FOR LIFE INSURANCESelling Life Insurance in Inflationary Times |
|
| While inflation is top of mind for everyone, your current and prospective clients don’t experience inflation in the same ways. So, don’t lose sight of individual nuances, and remember each life insurance client will likely be impacted and react differently. For many, the economy may be better than it was during the pandemic. Others may have gotten new jobs with better paychecks. Still, others could be hurting badly because of inflation. Some people saw inflation first in the cost of used cars. Others noticed it at the gas pump. And, everyone noticed it at the grocery. Energy and food prices are rising. The annual inflation rate stands at 8.3%,¹ more than twice as high as the general expectation of 3% inflation. How inflation affects life insurance buying behaviorInflation can lower people’s general economic perception—both large- scale and personal. This may make people more pessimistic. After all, inflation reduces the purchasing power of your dollar as the price of goods and services keep rising.All the buzz about inflation may cause consumers to rethink many financial decisions. Some may see life insurance as an optional expense to cut to pay for more immediate expenses. Potentially, the number of people who buy life insurance is shrinking because of inflation. Some people, feeling hurt by inflation, may surrender their life insurance policies to steer that money into more immediate needs. Keep in touch with your customers. Make sure they know about the options they have and highlight the importance of life insurance, even in inflationary times. Help them see life insurance not as an expense but as a safety net for their future. Who is most affected? |
|
| Millennials may feel the effects of inflation harder than Generation X or Baby Boomers.³ They are especially concerned that inflation may hurt not only their ability to buy necessities but also their ability to save for short- and long-term goals. This can especially affect their feelings towards life insurance. People are more strongly guided by their personal (or household) inflation rate. This rate is the total cost of your expenses in the past 12 months divided by your expenses. That means people are making individual decisions more than collective ones. When you speak with your clients, keep this in mind. |
|
Have that conversation with clients to check if their current coverage is still in sync with their life insurance goals and needs. For example, additional coverage may be needed to help compensate the loss of purchasing power. Ask your clients how their circumstances may have changed and recommend adjustments accordingly. Use our policy review resources to help you initiate and then conduct that important conversation with your clients.Offer Affordable CoverageWith inflation driving the costs of competing expenses higher, affordability of a quality life insurance coverage is more important than ever. Tap into the practical needs of today’s buyers and help them get financial protection that fits their budget. You can bring up the option of paying monthly premium payments, which may be more palatable to some buyers right now, instead of doing a lump sum.Focus on the long-term value that life insurance brings. And because buying life insurance is essentially a promise to pay out the death benefit, choosing a company that keeps its promises is paramount. |
| For resources to help ensure clients' life insurance policies meet their current needs, visit https://cloud.email.pacificlife.com/plpromise-practicemanagement. 1 Consumer Price Index Summary, U.S. Bureau of Labor Statistics, September 13, 2022. 2 Jones, Jeffrey , “Americans Expect Inflation to Persist Over Next Six Months,” Gallup, January 26, 2022. 3 “Rising Inflation Seen As Biggest Risk To Americans’ Retirement Plans in 2022,” Broker World, January 1, 2022. |
|
| Michelle Kosoi Pacific Life Field Vice President for the Broad Market West Coast Region Michelle.Kosoi@PacificLife.com (805) 422-1087 Broad Market Sales Desk LynInternalSales@PacificLife.com (888) 900-9777 |
The Power of PacificAt Pacific Life, putting customers first has allowed us to serve families and businesses successfully for over 150 years. As part of a mutual holding company structure, we have no publicly-traded stock, so we can focus on long-term strategies, financial strength, and the best interest of our policyowners.You and your clients, our policyowners, are at the heart of the business decisions we make. |