The Onset of Simplified and Instant Issue Products
Until recently, simplified/instant issue was reserved for term and whole life insurance product segments. Not anymore. For many insurers, life insurance distribution was brought online years ago with the onset of digital policy applications and other technologies that enable insurers to underwrite and issue policies within minutes of receiving an application online. The efficiency gains insurers can reap from simplified and instant issue have been a major boost for distribution, but they have almost exclusively been implemented for term and whole life insurance products—but not universal life.
Many of the largest insurers offer simplified or instant issue for term and/or whole life insurance. Some house proprietary applications on their home websites while others rely on dedicated life insurance marketplaces—like Policygenius and SelectQuote—to quote and issue policies. Some do both. But now more firms are making an effort to simplify and instantize the IUL application process as well.
Bringing Simplified and Instant Issue to the IUL Space
In 2019 Mutual of Omaha became the first insurer to directly offer a simplified issue IUL product when it launched IUL Express. The company only markets this product to advisors, completely excluding it from the prospect-facing public website.
That same year saw the launch of Amplify, an online marketplace specifically for shopping simplified issue life insurance—including IULS and VULs—from top insurers such as Nationwide and National Life. Aiming to offer “unique, transparent, and low-cost wealth-building life insurance products to be accessed by everyone,” Amplify focused on streamlining the customer experience, setting a new bar for universal life purchases by offering a full digital end-to-end quoting, application and underwriting process.
Younger Generations Prefer Online Insurance but Financial Professionals Still Play an Integral Role
Consumers increasingly prefer to purchase life insurance online. According to LIMRA’s Insurance Barometer Study, 2023 was the first year that any generational cohort reported a preference for purchasing life insurance online over purchasing through a financial professional.
38% of Gen Z and 27% of Millennial policyholders reported purchasing online
26% of Gen Z and 23% of Millennial policyholders reported purchasing through a financial professional
Insurers planning to market IULs and VULs should consider developing an instant issue product with a fully digital end-to-end buying experience, lest they miss out on a cohort of consumers who will opt to purchase their life insurance and wealth building solutions online.
While federal regulation passed under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 does not compel insurers to sell IULs through a financial professional intermediary, it seems that financial professionals will be involved in IUL sales for the foreseeable future.
New Instant Issue IULs Launch in 2024
Since the beginning of 2024, CI’s Life Insurance Monitor has observed two insurers enter the instant issue IUL space. Both offer a fully digital end-to-end buying experience marketed towards financial professionals.
Who are they?
- Ethos launched its instant issue IUL in January—in partnership with Ameritas—exclusively for select agents, with a “one-stop-shop sales platform” that supports the sales process “…from quoting to activation.”
- Americo rolled out its instant issue IUL in February with an eApplication that financial professionals can complete on the product’s dedicated microsite.
With the sustained rise in sales of IULs and the efficiency of instant issue, CI’s Life Insurance Monitor expects instant issue IUL products to become increasingly popular, with more insurers developing their own versions.
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Jacob Littman
Jacob Littman is a Senior Analyst on CI's life insurance and annuities team.