54% Of ‘Serious Shoppers’ Bought Life Insurance

WINDSOR, Conn., Nov. 29 -- LIMRA issued the following news release:

Despite half of U.S. households saying they need more life insurance coverage*, only 22 percent of households seriously shopped in 2011, and of those, 54 percent bought, according to LIMRA's 2011 U.S. Buyer-Nonbuyer study.

"What surprised us was that only 43 percent 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 percent more coverage." (chart)

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 percent 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.

Not surprisingly, 41 percent of consumers said life triggers - getting married, buying a home or having or adopting a baby, receiving substantial assets, or experiencing the death of a relative or close friend - were the reason they began to shop for life insurance. But the many consumers won't initiate the process on their own. One quarter of life insurance shoppers consider life insurance because sales reps or financial advisors initiate contact or suggest the need for life insurance. Also, 1 in 10 shoppers are prompted to consider life insurance because it is offered at work.

Consumers struggle with various elements of the decision process when shopping for and buying life insurance. The most difficult decisions cited by life insurance shoppers are:

Determining whether they are getting their money's worth

Understanding the policy details

Determining what type to buy

Deciding how much to buy

LIMRA found that younger shoppers struggle more than older shoppers do with buying decisions.

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. Producers' Report Card

LIMRA asked life insurance shoppers what producers did well and what they needed to improve. Consumers gave producers high marks on their knowledge and ability to educate, and determining needs of their clients. Consumers also thought their advisors were trustworthy. However, consumers felt that their advisor could work on making sure they review the needs of everyone in the household - almost half of life insurance shoppers said someone else in the household still needed life insurance. Many also felt that their producer didn't consider whether the suggested policy was affordable to them and wanted help determining how to fit the payments into their budgets. Most troubling was the fact that 35 percent of shoppers said the producer should have followed up with them because they were still deciding on whether to buy.

"No doubt, producers play a critical role in whether a life insurance shopper actually buys a policy," noted Retzloff. "As an industry, we need to remember that buying life insurance is a big decision for consumers - one they make once or twice in their lifetimes. Our behavioral research indicates that consumers may need time to consider their decision and, as our study found, if we don't follow-up with them, we may be leaving money on the table."

* Life Insurance Ownership Study, 2010

About the Study

LIMRA's U.S. Life Insurance Buyer-Nonbuyer study looked at the life insurance shopping experience from the consumer's viewpoint and how consumers' experiences during this shopping process influence whether they will buy or not. LIMRA surveyed only those consumers who "seriously shopped" for life insurance. There were 6,666 households that seriously shopped for life insurance -- 3,581 bought and 3,085 did not buy after shopping. The results were weighted to represent the U.S. population.

TNS 61NF 111129-JF78-3694828 StaffFurigay