In Search Of The ‘Perfect 10’ Life Insurance Prospect

CHICAGO -- What makes people likely to buy life insurance? Vikram Kamath will describe some characteristics of the ideal consumer during today’s Life Insurance Conference.

Kamath is director of LIMRA’s new Center of Excellence for Data Analytics. He will give a sneak peek of the findings from LIMRA’s Life Insurance Buyer Survey, which will be released later this year.

At the Life Insurance Conference, Kamath will identify the variables that most influence the decision to buy life insurance, sketch out a profiles of the people who are most likely to buy life insurance, and show how companies and advisors can use the survey results to prospect for new business.

LIMRA created a predictive model based on the survey of a sample of 5,000 consumers, Kamath said. Those consumers were asked about their financial background and whether they had made any insurance purchases in the last 24 months. In addition, LIMRA researchers picked up some demographic and behavioral data from the sample.

Based on that information, LIMRA researchers were able to create a predictive model that determines which of those factors causes people to be most likely to buy life insurance. The consumers then were rated on a scale of 1 to 10, with those rated a 10 being most likely to buy life insurance.

So, what turns a consumer into a perfect 10 prospect? Kamath shared some findings.

Recent life changes are triggers to buying. “If people had a really big change - like marriage, the birth of a child, a death in the family, they bought a house, they started a business - that gets them thinking about what’s really important to them, and they were more likely to buy life insurance as a result,” Kamath said.

Spouses are influential to buying. “We found that if one spouse has individual life, the other spouse is more likely to have it as well,” Kamath said. “This tells us that advisors might want to pitch to spouses of those who have life insurance, or to pitch to both spouses together.”

Advisors also play a strong role in a consumer’s decision to buy life insurance, Kamath said.

“We found that 70 percent of those who were rated a 10 had an advisor as opposed to 32 percent of the full survey population,” he said.

The model revealed other characteristics of a likely insurance buyer, Kamath said.

“Of the people who were rated a 10, their average age was eight years younger than the average age of the full sample – younger to middle-aged,” he said.

The prospects rated a 10 were generally upper or middle class, he added. “They have a high level of assets but don’t consider themselves wealthy because they also carry a high level of debt. They are employed full time. They tend to be homeowners, they tend to have a financial advisor, they tend to be married with children. They tend to be highly educated.  They are likely to have significant life events that prompted them to buy.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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