Uncover the Blind Spot in Your Life Insurance Strategy
In the life insurance industry, one of the biggest missed opportunities is the failure to convert beneficiaries into new policyholders. According to LIMRA, 60% of life insurance beneficiaries do not become policyholders themselves. This represents a significant gap in the customer journey—a blind spot that life insurance providers often overlook.
When a policyholder passes away, their beneficiaries typically receive the financial benefits of the life insurance policy. However, without an ongoing relationship with the insurance provider, the beneficiaries often don’t continue with the brand. This lack of relationship means that life insurance providers miss the chance to foster loyalty, cross-sell additional products, and even convert these beneficiaries into long-term clients.
The Life Insurance Beneficiary Blind Spot
A life insurance beneficiary is often someone who’s connected to the policyholder by family or legal ties, but not by direct engagement with the insurance provider. When a beneficiary is named in a life insurance policy, they may receive a lump sum after the policyholder’s death, but this is largely transactional. The relationship is one-time and typically ends with the payout. After that, many beneficiaries move on, seeking insurance elsewhere or avoiding it altogether.
Without proper engagement, these beneficiaries are never educated on the full scope of products the insurer offers, nor are they brought into a long-term financial planning relationship with the brand. This lack of conversion represents a major missed opportunity for insurers to grow their customer base and secure lasting loyalty. So, how can life insurance providers bridge this gap?
How Estate Planning Can Bridge the Gap
Bringing estate planning into the life insurance offering is one of the most effective ways to close this blind spot and create a lasting relationship with beneficiaries. The key is to involve beneficiaries early, making them feel connected and valued by the insurer, rather than just a one-time claimant.
GoodTrust's Family Plan offers a solution to this challenge. By combining life insurance with estate planning tools, GoodTrust helps life insurance providers create early and meaningful relationships with beneficiaries. The Family Plan provides an easy - modern - way for life insurance providers to offer estate planning services to policyholders and their beneficiaries, ensuring that the transition from policyholder to beneficiary—and eventually, to policyholder again—is smooth.
The Power of GoodTrust’s Family Plan
GoodTrust’s Family Plan is designed to help life insurance providers bridge the relationship gap by offering estate planning tools to policyholders and their families. Here’s how it works:
Introducing Beneficiaries Early: When life insurance policyholders include their beneficiaries in their estate planning process through GoodTrust, they begin to build a relationship between the insurer and the beneficiaries long before a claim is made. This proactive approach engages beneficiaries in the planning process, ensuring they understand the life insurance policy, the claims process, and how the insurer can provide ongoing protection.
A Modern Approach: Introduce beneficiaries to GoodTrust’s Digital Vault, combining traditional estate planning tools with secure, modern features to engage the next generation. This modern experience builds lasting relationships, positioning the insurer as a trusted partner and a forward-thinker.
Creating a Long-Term Relationship: As beneficiaries gain access to valuable estate planning tools, they are not only empowered to manage their loved one’s estate, but they also learn about how life insurance and estate planning work together. This education increases the likelihood that they will return to the insurer for their own life insurance policies when the time comes.
Fostering Loyalty and Trust: When life insurance providers offer value-added services like estate planning, it fosters a sense of trust and loyalty. Beneficiaries will feel that their financial future is being considered, not just the payout of a life insurance claim. The brand is no longer seen as just a one-time service, but a long-term partner in family financial planning.
Why Now?
This relationship-building approach is more critical than ever. Life insurance providers are facing a rapidly changing market, with increasing competition and evolving consumer expectations. By offering estate planning as part of the overall life insurance offering, insurers not only stand out but also provide value-added services that resonate deeply with today’s consumers. Estate planning ensures that the policyholder’s wishes are honored and that their family’s future is protected—while also solidifying the insurer’s role as a trusted advisor.
Turn the Blind Spot into a Big Vision
The life insurance beneficiary blind spot is a huge missed opportunity for insurers. By not converting beneficiaries into policyholders, providers are losing out on potential long-term customers. The solution? Integrating estate planning tools like GoodTrust’s Family Estate Plan into the life insurance offering. By doing so, insurers can create a relationship early, foster trust, and ensure that beneficiaries become loyal policyholders.
GoodTrust’s Family Plan is a win-win-win: policyholders and beneficiaries receive the full benefits of both life insurance and estate planning, while life insurance providers can bridge the gap and convert beneficiaries into the next generation of loyal customers. The time to act is now—let’s build those relationships and secure a future for your clients and their families.
Reach out to GoodTrust today to learn more about how we can help you bridge the beneficiary gap with our Family Estate Plan.