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30th November 2011

LIMRA reviews US consumer life insurance buying trends

Despite half of US households saying they need more life insurance coverage, only 22% of households seriously shopped in 2011, and of those, 54% bought, according to LIMRA’s 2011 US Buyer-Nonbuyer study.
“What surprised us was that only 43% of consumers received a needs analysis from the sales rep they met with about buying life insurance. Our research shows that consumers who received a needs analysis were considerably more likely to buy than consumers who didn’t,” said Cheryl Retzloff, senior research director, LIMRA Markets research. “Moreover, producers who recommended an amount to buy to their clients not only had more clients close the deal but on average those clients bought 60% more coverage.”
Prior LIMRA studies have shown that over half of consumers prefer to buy life insurance face-to-face. LIMRA’s new study found that life insurance shoppers who meet face to face with sales reps are the most likely to buy. In fact, if there was any face-to-face contact during the shopping process, more than 7 in 10 bought.
Life insurance shoppers who use only the internet while shopping and never meet with anyone are the least likely to buy after shopping-only 36% bought. Those consumers who started shopping on the internet and then met with a sales rep were 1.5 times more likely to buy than those who only shopped online.
While consumers listed a number of sources where they seek information when shopping for life insurance, they considered financial advisors, life insurance agents, brokers, and/or parents as the most useful sources of information to help with decisions about the life insurance purchase. At least 7 in 10 shoppers using these sources rate them as providing very useful information.