Life Insurance Buying Preferences Finds Majority of Consumers Unlikely to Buy in Next Year
WINDSOR, Conn. and ARLINGTON, Va., April 16, 2013 — Nearly one in five consumers (17%) would be willing to purchase life insurance coverage directly from a retail outlet, according to findings from the 2013 Insurance Barometer Study, conducted by LIMRA and the LIFE Foundation.
This is the third annual study of consumers’ attitudes about life insurance, their buying preferences and perceptions about the insurance industry, and the first time consumers were asked about their interest in purchasing life insurance from nontraditional distribution channels.
The study asked consumers to assume they were purchasing life insurance and express their willingness to buy from numerous types of retail locations, such as a warehouse club store, like Costco, or a superstore, like Wal-Mart or Target. Those consumers who were willing to purchase at a superstore (7%) cited perceptions such as “reasonable cost” (63%), “simple process” (44%), “convenient” (43%) and “no pressure to buy” (42), as reasons for their interest. It is important to note, and consistent with previous surveys, that purchasing life insurance in-person from a financial professional is the most preferred way to buy for the majority of all consumers.
“While the number of consumers willing to purchase a life product through a retail outlet is not overwhelming, it certainly is worthy of note,” said Todd A. Silverhart, Ph.D., corporate vice president and director of LIMRA Insurance Research, who spoke about the study at LIMRA’s annual Life Insurance Conference held this week in New Orleans. “In light of the novelty of the concept and that few people have actually shopped for life insurance through a retail outlet, there is likely to be considerable confusion in the eyes of the consumer as to what such a purchasing experience might entail. For carriers seeking a niche market, retail ventures could be a worthy approach.”
Consumers Recognize their Coverage Needs but Reluctant to Buy
Consumers continue to acknowledge the need for life insurance, yet ownership of life insurance has remained flat in the three years since the Insurance Barometer was first fielded. The 2013 study found that a majority of consumers (85%) agree that most people need life insurance and 65 percent say they personally need it. However, just 62 percent of consumers indicate they have life insurance coverage today.
New this year, the study also asked consumers to rate the likelihood they would buy life insurance for themselves or another member of their household within the next 12 months. Nearly half (45%) express some likelihood of purchasing life insurance in the next year (slightly likely to extremely likely).
“Life insurance has never been as inexpensive or easy to buy – especially with the anticipated growth of online and nontraditional purchasing channels – yet, millions of consumers continue to put off the decision,” said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. “Insurance professionals and our industry play a critical role in helping to educate the public on the wide range of options available and should continue to work together to help people get the life insurance coverage they know they need.”
Conducted by LIFE and LIMRA, the Insurance Barometer Study is an annual survey that seeks to understand how consumers think and act in regards to life insurance and other financial products. New for 2013, the study also looked at perceptions about new distribution models for buying life insurance and whether various life events impact consumers’ likelihood to shop for a policy.