The shaky economy has left families scraping to survive. According to the latest LIMRA study, Americans are more concerned with paying their mortgage and bills than they were a year ago. Here is some information that National Agents Alliance team members should find interesting and potentially helpful.
Identifying those at risk.
The numbers: Three in 10 households, roughly 35 million, are uninsured and half say they need more life insurance.
More than half of Gen X and Y homes, 30 million people, need MORE life insurance.
The middle market represents the largest segment of uninsured households, with 36 million – half – admitting they need more coverage.
Seven in 10 women agree that life insurance is a necessity and all people should have it – only 62 percent of males believe this to be true.
One-third of wives own no life insurance at all – despite the fact that seven in 10 homes are dual-income households, and nearly 30 percent of wives earn more than their spouse.
Why aren’t people buying?
The LIMRA study found the top two reasons people don’t buy life insurance are competing financial priorities or because they think they cannot afford coverage.
Another recent LIMRA study discovered that consumers overestimate the cost of life insurance by as much as 3 times the actual cost.
Shockingly, six in 10 consumers don’t recall being approached to buy life insurance in the last 24 months. Further, 35 percent of shoppers who met with an agent did not buy life insurance and said that the agent never followed up with them.
Another factor in play is the clients’ lack of knowledge about life insurance. This held people back from buying for the following reasons: 12 percent couldn’t decide what type was needed or how much to buy, 10 percent were afraid of making the wrong decision and eight percent did not know enough about life insurance.
What’s the motivation?
41 percent of potential clients said LIFE EVENTS – getting married, having a child or buying a home – prompted them to shop for life insurance.
One quarter of possible clients were looking for coverage because their financial advisor or agent initiated contact or suggested the need for life insurance.
25 percent of life insurance shoppers looked at buying coverage because they thought they might need more and wanted to review their coverage.
One in eight shoppers said a friend or family member recommended a sales rep or financial advisor, prompting them to shop for life insurance.
From window shopping to buying!
78 percent of shoppers with previous relationships with an agent bought life insurance – almost 10 percent higher than shoppers who had no prior relationship with their agent.
Providing a needs-based outlook for customers helps them see how insurance can work for them and their families. 75 percent of shoppers who received a needs-based analysis bought insurance, compared to less than half of those who didn’t have an analysis.
Agents should also recommend an amount to buy for their clients. LIMRA’s study found shoppers are more likely to buy insurance – and larger policies – after getting a recommendation from their agent.
Following up is critical for agents to provide coverage to clients. 35 percent of non-buying prospects said they were still shopping and agents never followed up with them. Additionally, a third more were still making a decision about life insurance.
Americans value life insurance. Eight in 10 consumers say they’ve had a positive experience with life insurance and add that the industry is critical should a loved one pass away. Nearly 67 percent of all Americans feel life insurance gives people peace of mind.
The top financial concern for half of consumers is having enough money to enjoy a comfortable retirement. Almost a third of consumers are most worried about paying their mortgage or rent – 31 percent are extremely or very concerned.