‘Really huge’ opportunity for life insurance sales if riddle can be solved

The problems facing life insurance sellers are not new: Americans know they need life insurance. Americans say they want coverage. Yet, only slightly more than half of Americans actually have life insurance coverage.

That is down from a coverage level of 63% in 2011, according to LIMRA’s latest Insurance Barometer study.

LIMRA hosted a LinkedIn Live discussion Tuesday to see if social media, data analytics or creative marketing might help insurers break through the purchase hesitancy surrounding life insurance.

Bryan Hodgens, senior vice president and head of LIMRA Research, was joined by Andrew Schwedel, partner at Bain & Co. The latest Insurance Barometer concluded that about 100 million Americans say they need life insurance, Hodgens noted.

“There's a huge demand out there for this product,” he said.  “About a third of Americans say that they intend to buy life insurance every year. But historically, far fewer actually take action. Our 2024 results showed that just 9.4 million policies were sold in 2024 … and that's pretty flat year over year.”

A new LIMRA-Bain study considers how the partnership between distribution and marketing can drive profitability and protect more families.

One key finding pushed back on perceptions that the life insurance shortfall is limited to specific demographics, Schwedel explained. In fact, the need is broad across age groups and income classes.

“The biggest issue is just people are overwhelmed,” Schwedel said, “and intimidated by the product. So, they're starting to do some research. They're maybe talking to friends and family. They're looking at online sources … but they're recognizing that they need help. That it's way too complex to navigate on their own, and they're not getting the help they need.”

Need to understand life insurance

Those life insurance-needy prospects who do meet with an advisor end up buying in high numbers. But they tell LIMRA that education is crucial. Forty-eight percent of respondents “strongly agreed” that they “need to understand life insurance before they purchase” it, Hodgens said. Another 42% agreed.

“To me, that's telling us that education is really important,” he said.

If they’re not getting information from a financial professional, LIMRA research shows that Americans are turning to social media. Sixty-two percent of all respondents are using social media for financial information, a figure that jumps to 80% with millennials and Generation Z.

“I think what's interesting, though, is when you look at what they're receiving,” Hodgens said. “There are a lot of influencers out there. There are a lot of people who are just posting information, and there might be some misconceptions. There might be some confusion as to what [consumers are] learning.”

Artificial intelligence is turning out to be a negative in some ways, Schwedel noted. AI-assisted searching is leading to “zero-click searches,” he explained.

“They're going online, they're looking at something, they're asking a question, and they get an AI summary,” Schwedel said. “And they're kind of stopping there. They're not going to the links below that, which was an important marketing lever for companies.”

In other words, if companies are not represented in the source material AI uses, then they might not have any chance of reaching their target consumers.

Another persistent perception issue is the cost of life insurance.

“What we find is, is that they way, way overestimate, six to 10 times actually, the actual cost of what the premium would be for life insurance policy,” Hodgens said. “In reality, we know it's much more affordable and accessible.”

In its most recent data, LIMRA reported that strong fourth quarter sales drove total new annualized premium to increase 4% in 2024 to $16.2 billion. It marked the fourth consecutive year of record-high premium. In 2024, policy count was level with 2023 results.

Going forward, it would not take much of a breakthrough to drive huge growth in the life insurance industry, Schwedel said. The market is there.

“We think the opportunity here is really huge, if people can figure out how to get this marketing and sales motion more joined up,” he concluded.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.