The 2011 Insurance Barometer Study is a new, annual survey designed to increase understanding about consumer attitudes and behaviors regarding a host of insurance and financial planning matters.
“The psychology of a life insurance purchase is very complex, and the results of this new study bear that out,” Robert Kerzner, CLU, ChFC, president and CEO of LIMRA, LOMA, and LL Global. “Research like this is important because it provides a better understanding of evolving consumer trends and preferences, like the use of technology and the Internet.”
Consumers Want to Understand What They’re Buying. When asked how they would use the Internet if they were to make a life insurance purchase, 59 percent say they would use it to conduct research, but ultimately buy from an insurance agent. When asked about factors that are important to them when buying life insurance, understanding what they are buying ranks highest among Americans (36 percent), followed by obtaining the proper amount of coverage (22 percent). Getting the best price ranked fourth out of six factors, with only 14 percent saying it was most important to them. Being certain about what they are buying is particularly important to women (39 percent say it is the most important factor compared to 32 percent of men), while men place greater importance than women on getting the best price (17 vs. 11 percent).
The study found that the cost of life insurance is the top reason people give for not having enough life insurance. If you don’t know what you(r clients) are being charged for cost of insurance charges (COIs), fixed administration expenses (FAEs), cash-value-based “wrap fees” (e.g., M&Es) and premium loads then you/they don’t know if/when they are being over-charged, or if/when you/they should be expecting a reduction in charges.
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