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The American Dream and the Language of Life Insurance

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In 2016, Northwestern Mutual conducted a research study exploring attitudes and behaviors of Americans toward money, financial decision-making and issues that impact long-term financial security in American culture. The study surveyed over 2,600 Americans ages 18 and older.

The study revealed that 66% of U.S. adults believe they can attain the ‘American Dream’, while only 16% feel it is out of reach.

So you’re thinking, who cares, right? Stay with me…

Two additional key findings relate to the actual definition of the ‘American Dream’:

  • 31% of Americans say their definition of the ‘American Dream’ has changed in the last 5 years.
  • 57% have a different view of what the ‘American Dream’ is, compared to that of their parents.

Here’s the interesting part:  when respondents were asked about what the defining characteristic of the ‘American Dream’ is for them, the top two responses from the study were:

  • 59% responded: “Having a happy family life”.
  • 58% responded: “Being financially secure”.

Say that again?  Financial security? That’s astounding. Isn’t that what we do as life insurance specialists? We provide families, businesses and loved ones a foundation of financial security?

It seems from the study that the more traditional notions of the ‘American Dream’ have been, more or less, abandoned by the masses. That is:

  • 18% responded: “Having more opportunities than my parents’ generation”.
  • 11% responded: “Having wealth/making a lot of money”.
  • 3% responded: “Moving up in social class”.

So this should be good news for advisors and life insurance specialists who can help clients create financial security, right?

Not exactly.

While people take an optimistic perspective toward their ability to achieve the ‘American Dream’ by attaining “financial security” over the long-term, many do not feel financially secure in the present. Despite this insecurity, many are not being disciplined when managing their personal finances. We see this in the following responses from the study:

  • 29% said they do not feel financially secure.
  • Only 21% consider themselves to be “highly disciplined” planners.
  • 34% consider themselves “disciplined” planners.
  • 33% consider themselves “informal” planners.
  • 12% “do not plan at all”.

If “financial security” is the “dream”, and planning and strong discipline is the formula to achieving that dream, then why do so many Americans fail to plan?

Maybe– just maybe– it’s the language the financial services industry uses. Maybe we are not letting people know that we are in the business of “financial security”.

Consider the summary of findings from LIMRA’s Market Facts 2018 article on Leveraging Emotional Intelligence to Engage Customers by Shelly Habecker and Corinne Kenny. The article suggests that the jargon we use in the life insurance industry may be one of the roadblocks to getting more people insured!

In the article, LIMRA sites a Maddock Douglas study on perceptions about life insurance. The study found that when we use the word “protection”:

  • 67% of Millennials think ‘security’ or ‘defense’;
  • 11% think it refers to ‘condoms’; and
  • a mere 10% think of insurance.

What about the word “policy”? Two thirds of Millennials assume that the term “policy” relates to ‘rules of government.’

The authors go on to say, “If protection is the hallmark of our industry, yet only 1 out of 10 people recognize this, we are not emphasizing the value of insurance …in the way it resonates with them.”

The authors also conclude that Millennials associate frustration, confusion, anxiety with the insurance industry and that we need to change that association to satisfaction, fulfillment and trust. Changing our language is a start.

So here’s to changing the language we use to help clients achieve financial security. Try it! See what happens. You may help more clients achieve the ‘American Dream’.

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