Insurance Buyers Online Want Alone Time

What drives a consumer to buy life insurance online instead of through an advisor? Convenience and the opportunity to be left alone to “kick the tires” were the two biggest reasons, according to LIMRA researchers.

The key findings of LIMRA’s research into consumer buying behavior will be revealed in at today’s Life Insurance Conference in Chicago.

Not many characteristics separate the direct buyers from the advisor-facing buyers, said Todd Silverhart, LIMRA director of insurance research.

When researchers studied the shopping and purchasing behaviors of life insurance customers, they found both sets of consumers were inspired to begin thinking about life insurance from the same group of trigger events. Those triggers included buying a house, having or adopting a child, getting married, the death of a loved one, receiving assets or experiencing health concerns.

But when it came time to actually shop for life insurance, the differences between the direct buyers and the in-person buyers became more apparent, Silverhart said. “Information they saw at work was more than twice as likely to prompt a direct buyer to shop for life insurance than an in-person buyer,” he said.

LIMRA examined four methods of buying life insurance – face-to-face, online, mail and phone – and found a few differences among buyers who used these various methods.  “People who bought through the mail were the most distinct,” Silverhart said. “They were older, more likely to be female, on average had lower incomes, least likely to work full time.”

But researchers were disappointed when they compared online buyers and face-to-face buyers, Silverhart said. “Their conclusion was that, in most ways, the online buyers do not look different from in-person buyers.”

The biggest difference between the online buyers and the in-person buyers came from the shopping experience, LIMRA researchers found.

“What we really found out is that the online buyers wanted to be left alone to shop and to learn,” Silverhart said.

“Those who bought online and through the mail cited convenience as a factor, but there was a very strong indication that those methods allowed buyers to avoid any pressure. And we think that is critically important,” he added.

A main takeaway from the findings is that consumers want to learn about life insurance in the way that is most comfortable for them, Silverhart said.

What lessons can those who sell life insurance learn from this?

“The sensitivity to pressure is good for financial professionals to be aware of,” Silverhart said. “If you are a financial professional selling in person, it’s interesting to learn why people prefer other distribution methods. Convenience was one factor cited above all other reasons, so you need to ask yourself what you can do in your practice to encourage your prospects to work with you.

"Being sensitive to the pressure concern is really important. There’s a really fine line between being appropriately persistent and being annoying and turning prospects off.”

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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