Three-quarters of workplace life insurance customers belong to either Generations X or Y, according to LIMRA.
“Younger, less experienced buyers typically do not have financial advisors, so they tend to look to different information sources compared to older customers,” said Ron Neyer, assistant research director, LIMRA Distribution Research. “Workplace life insurance buyers are also more likely to be first-time customers of individual life insurance. And about a quarter have never had a general discussion with someone who represents the industry.”
While there are differences between these customers and those who buy outside of the workplace, the majority of both groups live in households with annual incomes of over $50,000.
The report, “Shopping for Life Insurance: Seeking Simplicity at the Workplace,” revealed workplace customers are more often single. And they don’t do much shopping around after being presented with an option at work. In fact, 62 percent consider only one offer, and only one in six explores a third option.
“For workplace buyers, the search for life insurance frequently begins and ends at work,” said Neyer. “Many rely on their employers’ expertise for carrier selection.”
Why do they buy? Like all buyers, the top reasons workplace customers purchase life insurance is to provide for family living expenses and cover burial expenses. They place added emphasis on income replacement than customers who use other distribution channels.