By Linda Koco
ARLINGTON, Va. – When polled about their financial concerns, consumers put having enough money for a comfortable retirement at the top of their lists, said LIMRA researcher Todd A. Silverhart.
The finding comes from the in 2015 Insurance Barometer study of consumers, which Silverhart and Matt Derrick will present here today at the start of the annual Life Insurance Conference held by LIMRA, LOMA, Society of Actuaries and ACLI.
Silverhart is corporate vice president and director-insurance research for LIMRA. Derrick is executive vice president-programs and marketing at Life Happens.
The research was a joint project between both LIMRA and Life Happens, Silverhart said. The study sampled views of consumers in all generations. Silverhart discussed a few of the findings during an interview with InsuranceNewsNet in advance of his presentation.
Among those findings is that 65 percent of consumers said they are concerned about having enough money for a comfortable retirement. That was the top concern not only in the 2015 survey but also in each of the previous four years that LIMRA and Life Happens have conducted the study, Silverhart said.
The retirement concern ranked at the top even though the survey responses came from multiple generations, he noted.
Concerns about health care expenses were big too. For instance, 55 percent of consumers said they were worried about about long-term care expenses, medical expenses (54 percent) and supporting themselves in the event of a disability that precluded continued work (51 percent).
The message for industry professionals is that the insurance industry has products to meet each of those needs, he said, indicating those concerns can be viewed as opportunities for growth.
He found other opportunities in the data too, ones that apply to producers as well as carriers.
For example, 30 percent of consumers told researchers that they think they don’t own enough life insurance. That means “there is still a viable market out there,” Silverhart said. Also:
- Among those with no life insurance, 40 percent think they need it.
- Among those who currently have life insurance but think it’s not enough, 22 percent currently have group life, 20 percent have individual life, and 15 percent have both group and individual life.
Silverhart takes those figures as evidence that producers and advisors have plenty of opportunities for prospecting new customers. “Don’t assume your book (of existing clients) is adequately insured,” he suggested. “Look for the opportunities.”
Many consumers are aware of their financial vulnerability if the primary wage earner in the household were to die, the researchers found. Two-thirds think they would be in trouble, with one-half predicting they would feel the impact within the first year, he said.
Thirty percent said they don’t know what would happen if the primary wage earner were to die, he added.
That too is an opportunity for producers, he said. “It’s an opportunity to help prospects understand their needs, and what it means to be financially OK.”
The survey also uncovered signs of the continuing hurdles faced by the life insurance industry. For example, only 10 percent of the surveyed consumers said they are extremely or very likely to purchase life insurance in the next year, Silverhart said.
When asked why they don’t purchase more life insurance, 65 percent said it is too expensive and 61 percent said they have other financial priorities right now.
What could those competing priorities be? Higher cost-of-living expenses was the top answer, with 65 percent of consumers saying that.
But nearly half (49 percent) also answered “additional living expenses” such as Internet, cable, and cell phones.
In reflecting on these communications expenses, Silverhart pointed out that 10 or more years ago, those expenses didn’t even exist for most people. “Yet today, many people pay more for these things than they do for a term life policy’s annual premium.”
Some people don’t even know how much a life policy costs, he noted. For instance, the researchers asked consumers what the premium would be for a 20-year level term life policy written on a 30-year-old.
To get a baseline on that, the researchers consulted a quoting service and came up with an annual premium of $160. But many consumers thought the policy would cost more. For instance, for eight in 10, the median that they guessed was $400 a year. In the under-age-25 group, the average was $600 a year.
The onus is on the life insurance industry to better inform consumers, Silverhart concluded. If that happens, “it could result in more insurance being placed than now.”
InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at [email protected].
© Entire contents copyright 2015 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.