Beneficiaries’ needs present an opportunity for life insurance

Published on Jan 31, 2023

Every day, at every life insurance company, hundreds of people call in to claim their insurance. The claims representatives they speak to are there to provide a service, gathering information to assist the families with their claims. 

The problem is that this isn’t as simple a transaction or as straightforward a conversation as that description might suggest. Because this call almost always happens at a very difficult time for the family, a time when they are dealing with grief on top of hundreds of challenging bureaucratic tasks like this one. If insurance carriers want to provide great customer service and offer support to beneficiary families, insurance executives and claims representatives alike must strive to know what these families are going through.

As Sean Burgess—Chief Claims Officer at Lemonade and formerly Chief Claims Officer at USAA—put it, “In my time as head of claims at USAA, we oversaw millions of life insurance claims, each of which represented a family dealing with loss. A death in the family is a huge life event, but it is also a major financial event, when families are asked to make many choices that have huge repercussions in a short and challenging amount of time. It’s massively burdensome to deal with these financial affairs while you are mourning a loss. There is no way to make the grief go away, but we can make it easier to make smart decisions and take away some of that burden. This isn’t just a good idea, it’s a necessity for going beyond the payout to create a truly supportive beneficiary experience.” 

If you want to build a relationship of trust and mutuality with these claimants, it is crucial that you step up for them and their families in this difficult moment in their lives. And the first step to helping them with the burden they are under is to understand the nature and significance of that burden.

That is the purpose of Empathy’s annual Cost of Dying Report: to document the demands that loss makes of the family of the deceased, in money, time, mental and physical health, and more—and to begin to understand what can be done to help relieve their hardship, stress, and pain. 

In the data we uncovered this year, we saw clearly that the burden of loss is both broad and deep. Almost everyone we spoke to was affected across every aspect of their lives, and many families are absolutely stretched to their limit.

For example, it took families an average of 12.5 months to resolve all of the matters related to their loved one’s passing, and they worked 20 hours per week on it, on average. Meanwhile, 93% of people experienced at least one mental or physical health symptom due to their loss, such as sleep disruption, memory issues, or even panic attacks. The average person suffered from 5 of these symptoms, and a majority experienced at least two over a period longer than a few months.

With such a dramatic burden of time and stress, it begins to make sense that 43% percent of full-time employees and 53% of part-time employees reported that they regularly had trouble concentrating in the period after their loss, while 30% overall found themselves significantly less productive. Of employed respondents, 76% reported harm to their performance or status at work, and 13% considered quitting.

The data paints a picture of what a life insurance beneficiary’s life is like when they are calling to make their claim. They are stressed, confused, overwhelmed, and exhausted, all on top of the emotional pain of their loss itself. This presents both a challenge and an opportunity to life insurance carriers, as they deal every day with families right at this moment of their greatest need.

Take, for example, the person who has been named executor of their loved one’s estate. In many cases this will be the one who is taking care of all financial matters, and so they will be making the insurance claim. They will also be closing bank accounts, opening new bank accounts, canceling credit cards and memberships, chasing down creditors, getting property appraised, and much, much more. 

As their loved one’s life insurance carrier, you are only one of dozens of vendors and organizations they will be interacting with that day. If you want to stand out among them—if you want to cement their loyalty so that when they are shopping for their own financial services down the road, you are at the top of your mind—this is the moment, and how you handle it is critical.

So how can insurance companies distinguish themselves within the crush of services and bureaucracies the family member must deal with daily? Well, most of those calls are positioned as obstacles to the family’s needs and goals, tasks they need to get past to keep the process moving. As an insurance carrier, you are in a position to be exactly the opposite of this: not an obstacle, but a facilitator. A source of support, guidance, and information that will help them with everything else they need to handle right now. Instead of standing in their way, give them a much-needed boost.

This means, as Sean Burgess said, “going beyond the payout”—not just by referring them to a list of resources on a website, but with material, practical support that meets them where they are, that shows them you understand what they are dealing with right now, and what they need to get through it. Financial counseling, tax assistance, legal services, grief counseling, etc. And a crucial addition is a solution like Empathy, which provides comprehensive support for every aspect of the loss journey, with personalized plans and automated tools to help with the various challenges of this unique moment in their lives.

Our Cost of Dying Report shows in detail just how difficult loss can be for American families, how they are shouldering a massive load, often without adequate support or even a guide for where to begin. This is a problem for families, for communities, and for American society—but it is also a major opportunity for insurance carriers. Be the solution that families need, and you will create loyalty that spans generations.

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