Insurers face big challenges when trying to offer the best life insurance UX (user experience) on their websites and apps. Evolving digital expectations, new regulations and young consumers unfamiliar with life insurance products present significant hurdles. Meanwhile, the life insurance industry is already facing a long-term decline in ownership.
But these challenges create an opportunity for firms willing to adapt. Digital-first users increasingly expect their insurers to offer a user experience comparable to those from Apple or Google. Firms that employ modern best practices, learning from those offering the best life insurance UX examples and best insurtech UX examples, will have a leg up on their competitors. Below, we’ll discuss the digital strategies firms are using today to create the best life insurance user experience.
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Speed up the purchasing process with expedited digital underwriting
Many life insurers still offer slow purchasing processes that include blood tests and medical interviews. This is one reason why life insurance ownership continues to decline. Consumers accustomed to one-click shopping expect that same fast and simple process from life insurance too. Surveys bear this out: Nearly half of Americans said they would be more likely to purchase life insurance with simplified underwriting.
Insurers can improve their user experience by offering an expedited and simplified application process. The industry has made some progress in this area, but perhaps not enough. Among the 15 firms we track in our life insurance coverage group, 13 now provide some alternative to traditional underwriting processes. However, these offerings are often lackluster. Our research found that while firms expanded eligibility or introduced temporary guidelines in response to the pandemic, no firm introduced a new or significantly revamped underwriting program since 2019. Traditional life insurers are not meeting user expectations.
This is an area where insurtechs such as Ethos, Haven Life and Ladder excel. These firms offer applications that users can complete and receive a decision on within seconds, rather than weeks, often without any in-person medical exam. Notably, advisors working with traditional firms believe the superior application process and UX from insurtechs pose a threat to their business: Our recent advisor survey found that respondents cited startups’ quick underwriting (56%) and simplified application processes (50%) as competitive threats to their businesses. Life insurers serve both prospects and advisors when they adopt simpler digital application processes. Traditional firms should leverage their public websites to offer simple, direct-to-consumer term life products with simple applications. This will help them compete with startups and meet user expectations.
Insurtechs shine in certain areas of life insurance UX
Insurtechs have forced their way into the term life insurance market with one tool: a superior life insurance UX. As life insurance products all function near identically—particularly with term life insurance, which offers a death benefit in exchange for premiums—firms can only differentiate themselves via price or by offering the best life insurance UX. The best UX examples from insurtechs show that these startups are placing their bets on three key offerings: simplified, fully digital application processes, price transparency, and innovative digital experiences.
As detailed above, insurtech firms such as Ethos, Fabric and Ladder promise that prospects can apply online and receive a decision in five minutes. This compares favorably to the lengthy application times from traditional life insurance firms, a weeks-long process that often includes blood and urine tests. Millennial and Gen Z consumers accustomed to one-click checkouts may, understandably, be less than enthused about a purchasing process that requires fluid samples. Insurtechs are clearly targeting these demographics.
Price transparency is critical for life insurance firms. Surveys repeatedly find that prospects overestimate the cost of life insurance by 300% and then list the price as the top reason for not purchasing life insurance.
Insurtechs also do well in highlighting their quote tools. Price transparency is critical for life insurance firms. Surveys repeatedly find that prospects overestimate the cost of life insurance by 300%—and then list the price as the top reason for not purchasing life insurance. Life insurers can counter this misconception with quote tools. Seeing a price estimate shows prospects that term life insurance often costs less than their cell phone bill.
Ethos, Haven Life and Ladder all link to their respective quote tools on the homepage, a best practice that helps counter this price misconception. Insurtechs also tend to employ sparser designs, with fewer pages distracting from important elements like quote tools. These firms are betting that the best life insurance web design is a simpler one—and that highlighting low prices first and foremost is a way to cater to younger generations.
Insurtechs also provide other best practices for life insurance UX. Login can often present an issue for life insurers. Policyholders do not need to login into their life insurance account very often—perhaps only once or twice a year, to pay their premium or change their address—and thus may not always remember their username or password. Ladder works around this forgotten credential problem with a login process that does away with both username and password. Ladder policyholders instead input only their email address to login in. Ladder emails them a login link that directs to the secure site. Other life insurers would do well to offer similarly frictionless login experiences or other such UX best practices.
The best life insurance app design mirrors the main site
The web is increasingly shifting to mobile-first. Mobile traffic now outpaces desktop traffic 55% to 43% (with tablets sitting at 3%). The percentage of traffic moving to mobile screens continues to rise. Insurers that build out mobile capabilities now will be well positioned for the future.
Yet life insurers continue to lag behind. Our life insurance research has found significant room for improvement in the mobile space. Among the 17 firms we track for our life insurance subscription research, only 11 offer a mobile app with life insurance capabilities—meaning six leading life insurance firms lack any kind of mobile app experience. And even among firms that do offer an app, capabilities are often limited: Only half of the apps we track offer contact information updates, a simple capability that users would expect from any other financial app.
These lackluster offerings are, in a weird way, good news for insurers trying to offer the best life insurance app design. The bar is low. So one surefire way to create the best life insurance app is to duplicate the mobile web experience in app form. Most firms in our coverage group already offer a responsive design for their websites, i.e., the sites work fine on mobile browsers. Firms just need to repeat this mobile experience in an app. Equitable represents a current leader in the life insurance mobile app space by doing just that. The firm offers an app that mirrors its mobile web account owner site. Equitable’s app has existed in this style for five years and has remained a leader in our ratings despite mainly focusing on minor design and branding tweaks. This highlights the industry’s glacial pace in this area. Any app that presented an innovative life insurance mobile experience would quickly become best in class.
While the industry moves at a slow pace, firms should be mindful that lackluster life insurance apps from competitors do not set user expectations. Rather, the apps that users frequent most—Zoom, Instagram and Facebook—set those expectations. Life insurers must improve their mobile app experiences to be compatible with modern digital experiences. Users increasingly expect that changing their address in their life insurance app will be A.) possible and B.) as simple as uploading a picture to Instagram.
Users increasingly expect that changing their address in their life insurance app will be A.) possible and B.) as simple as uploading a picture to Instagram
Apps can also help life insurers engage their policyholders. Our survey of brokerage mobile app users found that the more satisfying users find an app, the more frequently they use it. Life insurance is low-touch when compared to brokerage, but firms can use apps to help foster a relationship with policyholders—as seen in the next section.
Brokerage mobile app usage by user satisfaction
How often do you log into your brokerage firm’s mobile app, typically?
Wellness apps can boost user engagement for life insurers
The relationship between life insurers and the insured is traditionally defined by financial transactions: The policy owner pays premiums to the life insurer, and the insurer pays a death benefit when the insured passes. While financially sensible, a model that involves only payment or death—events that are not particularly popular—struggles to turn policyholders into advocates for their insurers. Word-of-mouth advertising can be critical for insurers. Our survey of P&C policyholders found that 30% of respondents said they chose their insurer because of a recommendation from a friend or family member. Life insurance firms hoping for all-important word-of-mouth marketing must look elsewhere to boost engagement.
One possible answer: Wellness apps. The increasing popularity of fitness apps and wearables creates an opportunity for life insurers looking to make a positive impression on existing customers. Some firms are already taking advantage.
Several life insurers have rolled out such wellness apps and programs, often partnering with third-party specialists to do so, hoping that these apps will boost user engagement and word-of-mouth marketing. John Hancock partnered with Vitality to offer John Hancock Vitality, which rewards users with lower premiums and other perks when they meet certain health and fitness goals. (John Hancock also offers a version of the program tailored to people living with diabetes.) Principal and State Farm have each partnered with Sureify Labs to create wellness programs that offer gift card rewards for those meeting fitness goals. Principal’s program, for example, merges policy management with a wellness program in a single app—encouraging users to stay engaged with both aspects of their policy. These insurers are betting that users will be more likely to tell a friend about a fitness app than about their life insurance policy. These combo apps are one way firms are trying for the best life insurance app design.
Interestingly, this is one area where traditional firms have an advantage over insurtechs. All the wellness programs we track come from traditional insurers. Startups have stayed out of the space, instead relying on paid referrals programs to boost word-of-mouth advertising.
Public site education helps counter life insurance misconceptions
As mentioned above, surveys find that consumers overestimate life insurance premiums by 300% and then cite the price of life insurance as their top reason for not purchasing it. The life insurance industry needs to better educate potential customers.
According to the above-linked survey from industry group Life Happens, the more someone knows about life insurance, the more likely they are to own a policy. But only 20% of Americans feels knowledgeable about life insurance. Education is the best counter to this. It can also be the first step of the sales process, if firms use their public sites correctly. Our research indicates that the best life insurance website design highlights educational resources and quote tools to counter these wild price overestimates and other product confusion. Education is a huge area of opportunity for life insurers.
Prudential emerged as a leader in our most recent report on best practices for life insurance public site education. The firm offers a quote tool, dedicated education section and range of resources beyond the basics. Prudential also uses a wide range of media, including videos, articles, testimonials and quizzes, to teach consumers about life insurance. The firm’s thorough product comparison tables are also useful, as the differences between life insurance products are often unclear to consumers.
Prudential also does well with the information architecture of its life insurance resources, placing links in a logical progression across the main navigation. From left to right, the main navigation moves from education to policy purchase to beneficiary resources, following the usual life cycle of policy use: Policyholders learn about life insurance, then buy it, and then finally use the death benefit to financially protect their families.
Quote tools are also an important feature to combat price misconceptions. As noted above, insurtechs do well in highlighting their quote tools. Traditional firms, meanwhile, tend to offer the most thorough quote tools, although they can sometimes be overly complex and harder for users to find.
Life insurance quote tools must strike a tricky balance between simplicity and accuracy. A quote tool that is simpler, with fewer inputs, will be easier to use and requires less work on the part of the user. But a more complex tool, with more detailed inputs, will provide a more accurate quote. The best tools split the difference. State Farm, the highest ranked firm in our quote tools report, includes optional advanced inputs and secondary tools to help users generate the most accurate quote—if they so choose. Users more concerned with speed than accuracy can skip over these options and generate a quick quote instead, getting a ballpark figure for their policy cost.
Insurers need to track their competitors across traditional firms and insurtechs
While life insurance UX may lag behind other financial service industries, firms are now realizing the importance of the digital experience and racing to catch up. Life insurers averaged 15 significant updates to their digital UX over the last year, according to our pace of change analysis—comparable to the pace of change in other insurance verticals, like P&C and healthcare. The life insurance landscape is changing rapidly. User expectations are rising alongside. Firms do well to keep abreast of their competitors so that they can meet these evolving user expectations. Our cross-industry experience has demonstrated time and time again that the best UX doesn’t necessarily come from shiny new innovators or only from the richest firms. Rather, the best user experience comes from firms that quickly adopt innovations proven to work. Insurers will provide the best experience when they track trends and adopt best practices from both traditional life insurance UX and insurtech UX. Firms ready to adapt and learn will be best positioned to succeed in this changing space.
The best user experience comes from firms that quickly adopt innovations proven to work.
Corporate Insight continues to closely monitor the digital experience across the financial services industry, including top life insurance firms. Learn more about how CI’s life insurance research services can help your firm get ahead of the competition. Contact us via the form here or click here to learn more about our life insurance research.