Younger buyers don't want to fund a benefit that only pays out when they die, and that resistance is pushing life insurers to rework a product built around death into one that delivers value while policyholders are still alive, according to Scott Gorman (pictured), executive vice-president and chief operating officer at ivari and Sagicor North America.
Gorman said traditional life insurance has always carried a basic engagement problem, with the policyholder paying for years and receiving nothing tangible in return.
"People buy a life insurance policy for the benefit it leaves for their loved ones, they don’t see that benefit in their lifetime," Gorman said.
That model is colliding with what younger buyers expect. Gorman said research from LIMRA points to a meaningful share of consumers under 40 who feel they lack health and wellness benefits, with around 40% citing that gap and roughly a quarter naming a lack of everyday value as a barrier to buying life insurance in the first place.
"People want value today," Gorman said. "So if they're paying for something, they want value, they want benefit today."
ivari's version of that shift is a June partnership with virtual care provider Maple, which attaches virtual medical visits, mental health counselling, and financial and legal support to a life policy through a member assistance program – the death benefit itself unchanged underneath.
The evidence for demand so far is limited but suggestive. A small group of policies previously carried a narrower offering centred on virtual doctor visits, and Gorman pointed to internal feedback on those.
"Even those ones, 85% said it added value to the policy," he said.
The broader proposition is too new to measure. Gorman said the expanded member assistance program only launched at the start of June, and it is too early to draw conclusions on uptake or on whether the benefits will keep people from dropping coverage.
"From a lapse perspective, it's too early to tell," he said, adding that lapse trends typically take a year or two to read.
The deeper aim, he said, is engagement, an area where life insurers have long trailed other financial institutions.
"One of the things that life insurance struggles with is regular engagement with their policyholders," Gorman said.
The problem is sharpest on permanent policies, where a sale can be followed by years of silence. Gorman contrasted that with banking, where customers deal with their provider constantly.
"But if you're buying a permanent policy, sometimes it's that purchase, and then you really don't have that ability to interact with your customer," he said.
For advisors, Gorman said the shift should make the sale easier without displacing its purpose. The conversation still has to centre on coverage.
"The focus when an advisor is meeting with their customer should be on life insurance needs," he said.
The harder question is where a life policy stacked with health, mental health and financial services stops and group benefits begin. Gorman drew the line firmly, calling the offering supplemental rather than a replacement for workplace coverage.
"We are not a group benefits plan, and it's not meant to compete against the group benefits plan," he said.
He was equally direct that policyholders should not treat it as a substitute for other coverage they hold.
"It's not a substitute for employer benefits. It's not a substitute for public health care, full health care or private health care or whatever an individual has. It is a supplemental," Gorman said.
Gorman tied the everyday-care angle to a gap in the public system, saying roughly 6.5 million Canadians still lack a family doctor and can use the virtual channel to reach a physician or nurse.
For an insurer, he said, keeping policyholders healthy is not just goodwill. It is aligned with the economics of the business.
"It’s in everyone’s best interest to support longer, healthier lives, as this leads to better outcomes for both individuals and the organization,” he said.
