How to create value-added services in the life insurance industry?
Life insurance has long been recognized as a crucial financial tool that provides security and protection for individuals and their families. However, in recent years, the life insurance industry has undergone a transformation by offering value-added services that go beyond the traditional scope of policies. These additional services, tailored to address the unique needs of policyholders, have become a cornerstone of modern life insurance offerings. In this article, we delve into the concept of value-added services in the life insurance industry and explore their significance in enhancing the overall customer experience.
What Are Value-Added Services in Life Insurance?
Value-added services in the life insurance industry refer to the supplementary benefits and features that insurance providers offer alongside their core life insurance policies. These services are designed to cater to the diverse needs of policyholders and add tangible value beyond financial protection. From wellness programs to financial planning tools, these offerings aim to nurture and support policyholders throughout their life journey.
1. Wellness and Health Initiatives
Several life insurance companies now include wellness and health initiatives as part of their value-added services. Policyholders are encouraged to lead healthier lifestyles through access to wellness programs, health screenings, and personalized health assessments. Insurers may offer discounts or other incentives to policyholders who actively participate in these wellness activities. This proactive approach benefits both the insured and the insurance company, as it promotes healthier living and may lead to reduced risk and lower claim rates.
Example: Prudential, a global life insurance company, offers the “Vitality” program as a value-added service to policyholders. This program incentivises and rewards policyholders for adopting healthy lifestyle choices. Through the Vitality program, policyholders can earn points by engaging in various wellness activities, such as exercising, undergoing health screenings, and purchasing healthy food. These points can then be redeemed for discounts on insurance premiums, gym memberships, and other health-related products and services. By promoting healthier living, Prudential aims to reduce long-term risk and foster a more engaged and loyal customer base.
2. Financial Planning and Advisory Services
Beyond providing financial protection to beneficiaries, life insurance companies now recognize the importance of assisting policyholders with their long-term financial goals. Value-added services may include financial planning tools, retirement calculators, and access to financial advisors who can help policyholders make informed decisions about investments, estate planning, and retirement strategies. This empowers policyholders to manage their finances wisely and secure their future.
Example: AXA (Philippines) offers the “Emma” app as part of its value-added services. This is a dedicated virtual partner in your journey towards financial wellness combines financial planning tools, personalized insights, and health tips to empower policyholders to lead healthier and financially secure lives. The app provides users with access to budgeting tools, investment calculators, etc.
3. Education and Training
Many life insurance providers offer educational resources and training as part of their value-added services. These resources aim to enhance financial literacy and educate policyholders on the intricacies of life insurance, investment options, and risk management. By equipping policyholders with knowledge and insights, insurers foster a better understanding of their products and encourage them to make well-informed decisions regarding their coverage.
Example: Sun Life Financial (Philippines) runs the “Brighter Life” initiative as part of its value-added services. This online platform offers a wide range of resources, including articles, tools, and calculators, to improve financial literacy and overall well-being. Policyholders can access educational content on topics like retirement planning, saving for education, and managing debt. By empowering customers with knowledge, Sun Life aims to help them make informed decisions about their financial future.
4. Support for Beneficiaries
Life insurance value-added services extend their support not just to the policyholder but also to their beneficiaries. Companies may offer assistance to beneficiaries in understanding the claims process, accessing grief counseling services, and handling financial matters after the policyholder’s passing. By providing these support systems, insurers aim to ease the burden on beneficiaries during difficult times and demonstrate their commitment to caring for their customers beyond the policy.
Example: Metlife (USA) Beneficiary Assistance is supporting clients through one of life’s most challenging moments. From managing important tasks when a loved one passes away to wellness support.
5. Policy Upgrades and Flexibility
In response to changing customer needs and life circumstances, some life insurance providers offer flexible policy options and the ability to upgrade coverage. Policyholders can adjust their coverage as their needs evolve, ensuring that their insurance remains aligned with their changing lifestyle and financial responsibilities.
Example: New York Life, a prominent life insurance company, offers a unique value-added service called “The Whole Life Plan“. This program provides policyholders with the opportunity to accumulate cash value over time while receiving life insurance protection. The policy offers flexibility in premium payments and the option to access the cash value for future financial needs. By combining savings and insurance, New York Life caters to the diverse financial goals of its customers.
The power of value-added services in the life insurance Industry
The life insurance industry’s shift towards providing value-added services signifies a customer-centric approach to business. By going beyond the traditional notion of insurance coverage, life insurance companies now play a more active role in supporting and nurturing the lives of their policyholders. Whether it’s through wellness initiatives, financial planning tools, educational resources, or support for beneficiaries, these services enhance the overall customer experience and create a lasting positive impact.
As the insurance landscape continues to evolve, we can expect life insurance providers to invest further in value-added services, leveraging technology and data-driven insights to tailor offerings to each policyholder’s unique requirements. The focus on holistic well-being and comprehensive support ensures that life insurance remains a vital instrument in safeguarding the future while enriching the present lives of their valued customers.
If you want to find out more about the topic of value-added services in insurance, you should also read our article on general insurance industry here.