For 45 percent of non-buyers, life insurance is still part of their financial priorities. But, according to a Deloitte survey, one of the main reasons why they don't go ahead and purchase a policy is because no one has offered it to them.
"From our survey it is clear that life insurance is very much on the minds of many consumers," said Rebecca C. Amoroso, vice chairman and U.S. Insurance Leader for Deloitte LLP, who was the survey's executive sponsor. "A significant percentage of respondents have simply not been offered coverage recently; many also noted that they never shop for coverage on their own initiative. Not soliciting their business exacerbates this gap between insurers' interests and consumers' needs."
In its survey - "The Voice of the Life Insurance Consumer" - Deloitte examined how people perceived the value of life insurance, including where coverage ranked among their other financial priorities, as well how consumers preferred to be reached. The survey covered buyers and non-buyers' related beliefs, motivations, influences, priorities and preferences.
The survey also identified some marketing challenges that life insurers face. Among them are consumer confusions about how much coverage they need and whether they can afford it. "A significant number of respondents frankly don't know if they need more insurance - or if they do, they don't know how much they might need to buy," said Sam Friedman, Insurance Leader for Deloitte Research, who led the project."Still others say they want life insurance but cannot afford it - leaving open the question as to whether these cost-conscious prospects might in fact purchase a policy if they realized what the price and value for coverage might actually be."
"Even current buyers did not overwhelmingly recognize many of the financial needs life insurance can fulfill, such as a source of cash in retirement, a way to save money for financial emergencies, or to help finance a child's college education," Friedman added.
The survey found those who are insured more strongly identified with the value and benefits of life insurance than did those without coverage; yet even half or fewer of those with coverage do not associate their policy with all of the benefits that it can provide.
"Regardless of the state of the economy, life insurance continues to serve certain vital financial needs. From this survey it is clear that insurance companies can grow their business by customizing and expanding their educational outreach and marketing to consumers, based on their current insurance status, age and other key factors," Amoroso said.
More key findings:
- 33 percent of respondents said they did not have coverage because no one had offered to sell them a policy.
- While life insurance is not the top financial priority for most, 45 percent of non-buyer respondents and 70 percent among those who have life insurance included it among their top five financial priorities.
- A significant number of the insured and uninsured intend to buy new or additional insurance in the next two years.
- Older prospects are harder to persuade with solicitations than younger consumers.
- The youngest respondents found the application and underwriting process to be much more onerous than was the case among older consumers.
- Financial triggers and familiar life events are very significant in the life insurance purchase decision. Yet because many respondents are either not aware of or don't understand the broader roles and benefits of permanent life insurance, they don't necessarily think of the product as a more comprehensive, longer-term financial planning solution.