A year ago, insurance prognosticators pegged the biggest emerging issues for U.S. insurance consumers heading into 2015. Near the top: how to maximize retirement income and protect against health care costs.
Those issues, cited in a North American Co. study, are still in play in 2016, as consumers struggle to balance their insurance needs with other kitchen-table economic issues like keeping the household budget in line, paying for college, saving for retirement and paying down debt.
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But new trends have emerged heading into 2016, based on conversations insuranceQuotes.com had with industry experts. Each has formed an opinion on what matters to most to U.S. consumers as the new year opens.
Here are the issues the experts say will hold sway in 2016:
1. Expectant women will have more flexibility in getting coverage
Expectant women with have greater flexibility in acquiring coverage, and young otherwise healthy women will therefore opt out in greater numbers.
“Under the Affordable Care Act, new policies must cover preexisting pregnancies with no waiting period,” says Kevin Haney, owner of New York City-based A.S.K. Benefit Solutions, which publishes the GrowingFamilyBenefits.com website. “However, you can start a new policy only during open enrollment, which lasts three months. Becoming pregnant is not a qualifying life event.”
The State of New York just announced that pregnancy is now a qualifying life event for plans issued through its state exchange, Haney says. This means women can purchase new coverage outside of open enrollment. It also means they can opt out without worrying about becoming pregnant at an inconvenient time.
“Other left-leaning U.S. states may follow suit,” he adds.
2. Cash-value policies to expand
For the most part, the individual life insurance trends we saw in 2015 will carry into 2016, says Dave Wilken, president of individual life for New York-based Voya Financial says. But there will be some new arrivals.
“Cash-value products like indexed universal life will continue to grow in popularity as consumers become more aware of their life-long benefits,” Wilken says. “Cash-value life insurance allows individuals and families to protect their retirement savings, build wealth and distribute that wealth when needed. That distribution could be part of a planned retirement strategy or to cover unforeseen financial events.”
Wilken also sees many carriers investing in technology that will allow them to promote and deliver life insurance solutions in a dramatically more efficient manner, in order to reach many more customers.
3. Big changes on the employee health insurance front
Other experts see a move toward health insurance coverage subsidized by employers.
“On average, employers currently offer three-to-five health plans to employees,” says Hector De La Torre, executive director of the Transamerica Center for Health Studies. “Looking ahead, more employers say they anticipate subsidizing plans that employees buy privately versus purchasing more plan options.”
De La Torre also expects more frequent health benefits education from employers.
“Our research shows that employers have been more frequently sharing information about health benefits with employees over the last three years, and in 2015, 50% of employers said they shared health benefit information with their employees at least a few times per year compared to only 30% who did so in 2013,” he adds. “This trend will likely continue since many companies plan to amend their health plan options in the future.”
4. Mobile flexes its muscles
Across the globe, technology takes a big step in the consumer insurance marketplace, says Fred Schebesta, founder of Australia's most visited personal financial services comparison site, Finder.com. (He recently opened a U.S. version.)
“I’m saying 'hello' to automated everything,” he says. “For example, getting a quote while on the train to work will not only become common, it will be the standard of service demanded from providers.”
Underwriting practices will change, too, and to the benefit of the customer.
“Underwriters will undercut,” he adds. “The insurance space will become even more of a flurried, 'bidding-styled' exchange for the savvy shoppers – as it should be, as every policy can be custom-fitted and made even more attractive by the next dealer.”
Another trend from Schebesta: shorter policy spans and more-flexible plans. “Our society is becoming largely more throw-away in terms of product/service consumption, and the same will occur for policies,” he says. “Bigger payoffs in smaller amounts of time, or time-specific policies will crop up for travellers, extended visitors and other user-types.”
5. Big industry changes
Leslie Travis-Cook, an insurance expert at the Cook Group Cook Group Insurance Agency in Chicago, Ill., sees new trends across the board in the insurance sector.
“The trend for life insurance will be the increase of Indexed Universal Life (IUL) insurance policies," Travis-Cook says. “It has more pros than cons. This product has a flexible premium, it covers your entire life, and it has a savings component.”
In the health insurance arena, Travis-Cook sees increased participation in workplace wellness programs.
“This will help participants identify potential areas of focus for wellness goals. Those who don't participate in the wellness program may incur a non-participating fee or a penalty. In other words, if the don't participate in the program they will have to pay.”
Additionally, Travis-Cook expects more marketing on social media, and more carriers will consolidate.
“There will be more independent agencies versus the captive agencies who dominate the Industry. The number of independent agents, such as myself will continue to rise, thus maximizing relationships with preferred carriers.”
Bottom line: U.S. insurance consumers can expect to see significant changes in 2016, ss the experts attest. We’ll see just how accurate these predictions are one year from now.
See also: Obamacare in 2016: What you need to know