Members of Generations X and Y are more receptive to buying life insurance from their bank than are members of the boomer and silent generations, according to a new report.
LIMRA, Windsor, Conn., published this finding in a new report, “Bank on It! Opportunities With Today’s Bank Customer.”
The study reveals that the majority of Generations X and Y consumers would consider buying life insurance policy from their bank, significantly more than the one-third of boomers and members of the silent generation who say the same.
The study also reveals that 7 in 10 consumers who say they would consider buying life insurance from a bank are interested in simple products. Among high-net-worth consumers, only one third would consider buying more complex life insurance policies from their bank.
“Growing up in a post-Graham-Leach-Bliley environment, the younger generations are open to receiving a broad spectrum of products and services from their bank,” says Patrick Leary, assistant vice president, LIMRA distribution research. “We also know these consumers are more likely to need life insurance than older generations. In addition, many of these younger consumers have no existing relationship with a life insurance agent or financial advisor so buying life insurance from their bank is not just another convenience—it provides an opportunity to get the financial protection these consumer really need.”
The periodic LIMRA study also finds awareness of bank-sold life insurance has reached 54%. While encouraging, the study notes that a still large portion of the population that needs to be educated. The report finds that only 44% of consumers would consider buying life insurance from a bank.
“Recognizing the desire for simplicity, carriers have designed single-premium, simplified issue solutions that leverage technology to meet more complex needs in a simplified way,” says Leary. “This approach has worked well. Based on LIMRA’s findings, much of banks’ success with life insurance has been as a wealth transfer solution, selling single premium whole life and universal life.
“These findings offer a great opportunity for banks wishing to sell more life insurance,” Leary adds. “Traditionally, banks have focused on selling single premium permanent life insurance products for the purposes of wealth transfer — something banks should absolutely continue doing. Our research suggests if banks expand their energy on selling term and other basic protection products broadly to their customers, they would have more success.”