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HerLife: Proposed life insurance product for working mothers

The life insurance market for women is large, growing, and underdeveloped. This is particularly true for working mothers who have a need to protect their children from unanticipated financial risks and enhances their ability to pay for long-term insurance products. The life insurance market growth for working mothers is accelerated relative to other markets, yet life insurance companies deliver generic life insurance policies that only consider gender as an actuarial factor. This article proposes a solution of partnership with a designated life insurance company to develop a term life insurance product called HerLife. It will uniquely cater to working mothers by providing education on life insurance, requiring a partner insurer to waive and fund premiums for three years based on contingent, women-specific life events (e.g., diagnosis of malignancies of female organs), and allowing them to pay premiums suited to varying financial needs while accommodating the insurance provider’s policies. HerLife is also a launch pad to which other women-specific insurance products can be added. It will enable working mothers to secure their families’ futures while encouraging additional tailored insurance solutions for women to take part in the insurance market.

The global market for the annual premium value of women’s life insurance is expected to nearly double from $448 billion to over $825 billion by 2030. Life insurance enables policyholders to provide financial security for their beneficiaries in the event of their death. There are three gaps in serving working women: non-gender specific life insurance policies, misalignment with female needs, and low awareness — all of which will be amplified by the growth of this consumer base. Insurance companies currently deliver blanket life insurance policies that consider gender for actuarial rating purposes only. The industry implements a mass-focused sales approach with generic products that consumers opt out of due to misalignment with customer needs and lack of education on life insurance. Mothers, for example, may be willing to invest in life insurance to protect children but are unaware of other financial benefits. Both tailored life insurance solutions and education on these products is unavailable to this consumer segment. Given the robust market opportunity, lack of gender-differentiated solutions and increased purchasing power of working women, there is high potential for a term life insurance product designed for and marketed to working mothers.

 

The proposed solution to bridging these gaps in the growing women’s life insurance market is a term life insurance product called ‘HerLife,’ specifically designed for working mothers aged 25–50 years. HerLife will provide 10–15 years of term life insurance with the requirement to waive and fund the premium for three years in the event of a pregnancy complication, birth of a child with a congenital disorder, diagnosis of malignancies of female organs, or death of a spouse. HerLife premiums, costs, and benefits could be iterated through a partnership with a primary life insurance provider to ensure adjustments based on risk factors and desired cash-flow generation. HerLife provides a solution for the current lack of products, awareness and education on life insurance among working women.

HerLife provides a simple, step-by-step “shopping” experience focused on meeting working mothers’ financial needs. It will offer high-level as well as optional deep-dive views of information when selecting products to provide education and transparency to the customer before choosing coverage. HerLife will provide details on how the working women premium was calculated, which risk factors/personal details contributed to its price, and which factors she can modify to change the pricing and payment of her plan.

After choosing her plan, the working women will be given the option to select different payment plans, including micro payments by week, to make it more financially feasible for some mothers. She can also add multiple coverage types to her “shopping cart,” enabling her to compare policy options and pricing. She will be able to pay for her chosen HerLife plan through an integrated payment system that will include mobile payments. HerLife aims to be a partner to consumers throughout their lives and to be adaptable to different life stages. Once women have completed the HerLife shopping journey, they will adhere to any other standard processes and policies required by the insurance partner (underwriting, background checks, exclusions, etc.). HerLife and the insurance partner will use existing big data on working mothers and mortality to effectively model risk of life and life events and calculate price to guarantee success.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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