The industry talks a lot about life and health insurance, but one product that doesn’t always get attention – when perhaps it should – is funeral insurance.
Funeral insurance is tailored to specifically meet distinct consumer needs during a stressful and difficult time. In recent years, insurers have become more innovative and their products have evolved, making it easier for brokers to evaluate and secure the right funeral insurance coverage for their customers.
“Over the last year the funeral business itself has changed,” said Tammy Schultz, president of final arrangements & preplanning solutions for CUNA Mutual Group. “The wishes and wants of customers are evolving and it’s imperative that both the funeral industry and industries that support it adapt to changing needs.”
CUNA Mutual Group reported that over 85% of consumers believe funeral preplanning is important, but less than 20% actually take the steps to financially prepare themselves in the event of a death.
“Funeral insurance products are designed to protect against rising funeral costs with built in features such as growth and the potential to lock in prices related to the desired service,” she explained. “Other products that support the funeral planning process, such as travel protection to cover repatriation or assistance for the executor, provide added value to customers.”
One such example at TruStage Life of Canada (formerly Assurant Life of Canada and a member of the CUNA family), is its final documents service, a concierge offering that helps loved one’s file for insurance, to close bank accounts, secure membership awards, and apply for appropriate benefits to ease the burden on the executor.
“Effective brokers take the time to evaluate the needs of the customer to determine which product and terms best fits their situation,” Schultz explained. “By considering details like the health of the customer or their financial situation, they can help make sure the customer can afford the payments and maintain coverage, easing the financial burden on their family.”
Brokers can also help address a client’s specific needs by ensuring they understand the differences between life insurance and funeral insurance products.
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“As experienced in many different industries, the pandemic has brought about a shift in consumer attitudes,” she noted. “Industry research has demonstrated that consumers are thinking more and differently about their health and wellbeing, as well as contemplating how they want to take control of their final arrangements.”
Schultz mentioned that the shift in consumer attitudes has resulted in more interest in funeral product offerings but, naturally, restrictions during the pandemic have constrained business to some extent.
Brokers have faced difficulties over the last two years when trying to personally approach family members or loved ones following a death, but digital solutions have allowed them to broadly serve customers with different needs in different geographies.
“By closely monitoring and analyzing our own results, we have been able to quickly adapt and modify products to better suit the market and consumer needs,” said Schultz. “In addition, the ability to conduct broad consumer research in different channels helps us better understand the needs of consumers today and to enhance our product offerings to meet those needs.”
According to Schultz, the industry can anticipate continued demand in 2022, and work towards enhancing the ability for customers to perform product research themselves so they can complete planning steps on their own terms.
When it comes to risk management, this space is quite similar to traditional markets, with underwriting mechanisms to monitor both short- and long-term experience to make product adjustments when necessary.
Insurance protects consumers from the unexpected, and death is the largest uncertainty we can face. Every customer will benefit from funeral preplanning and ensuring they have the right coverage in place to fund their final arrangements.
“There are other financial funding options, but they do not always provide the same protection as insurance,” she continued. “In other words, depending on the products you qualify for and buy, without proper insurance in place, families may still owe money at the time of death.
“One of the primary responsibilities of insurers in this space is to help facilitate the necessary education of consumers and the broader insurance industry about the unique nature of funeral insurance and the value it can bring to customers and their loved ones.”