According to LIMRA, there is an estimated life insurance coverage gap of US$12 trillion industrywide,2 and the average shortfall between what people have and what they need is approximately US$200,000.3 This indicates insurers still have a lot of work to do to penetrate underserved markets once this crisis passes.
For insurance carriers, narrowing the gap presents a huge growth opportunity—financially, of course, but also from a corporate social responsibility (CSR) perspective. In March 2021, the Deloitte Center for Financial Services published Driving purpose and profit through financial inclusion: Stronger together, calling on financial institutions to advance financial inclusion: providing access to useful and affordable financial products and services to meet the needs of the underserved market.”4 As part of that effort, this is the first in a two-part series exploring how financial inclusion can be realized in the insurance industry by improving awareness of and access to life insurance products.
Based on a recent Deloitte survey, this article addresses how the COVID-19 pandemic impacted sales of mortality products and the possible implications going forward. Our follow-up article, publishing in the summer of 2021, will offer an in-depth analysis of how insurers could narrow the coverage gap, find growth, and meet financial inclusion goals.