LIMRA: Younger Consumers More Likely to Buy Life Insurance from a 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.”