A growing number of Americans are turning to the Internet to research and buy life insurance products. And the online shoppers aren’t just millennials.
This is one of the key findings of the 2015 Insurance Barometer study, a report produced annually by Life Happens and LIMRA. Highlights from the research were outlined by executives from the two organizations on the opening day of the 2015 Life Insurance Conference, held in Arlington, Va. on April 13.
Among other areas, the report explores the chief financial concerns of Americans. Not surprisingly, having enough money for a comfortable retirement comes out on top: Nearly two-thirds of those polled (67 percent) identify retirement funding as an issue. This compares with just over half of the respondents who flag paying for long-term care services (55 percent), covering medical expenses (54 percent) and supporting oneself if disabled and unable to work.
“Having money for a comfortable retirement is the top response in every age group,” said Matt Derrick, an executive vice president, programs and marketing, at Life Happens. “It was also the top concern in all income brackets.”
Why the focus about retirement funding? For nearly half (48 percent) of the respondents, said Derrick, the state of the economy remains a concern. Nearly as many (44 percent) say they have not saved enough for retirement. About 3 in 10 respondents (29 percent) expect they will not receive adequate income from Social Security; or they believe they haven’t done enough to plan for retirement.
The degree to which lack of planning is a concern, said Derrick, correlates closely with age. Just over 4 in 10 (43 percent) of those below age 25 say they haven’t done enough planning for retirement. Progressively smaller percentages of respondents cite lack of planning among those ages 25 to 44 (31 percent), 45 to 54 (27 percent), and 65-plus (20 percent).
Turning to life insurance ownership, the survey notes that nearly 6 in 10 (57 percent) of the survey participants own life insurance. A plurality of policy owners have individual insurance (26 percent), 19 percent have group insurance and 12 percent have both policy types.
Nearly a third of respondents (30 percent) say they don’t have enough life insurance.
“These people represent a big market opportunity for advisors,” said Todd Silverhart, a corporate vice president and director of insurance research at LIMRA. “The self-identified lack of coverage is prevalent across all current books of business: group and individual policyholders and those who own both policy types.”
The most common “major” reason for owning life insurance among the participants: covering burial and final expenses. This compares to 34 percent of those polled who cite replacing lost income (34 percent), transferring wealth (24 percent) and helping to pay off a mortgage (17 percent).
When asked about their financial preparedness for retirement if a primary wage earner died, a third (34) say they would “immediately” have trouble covering everyday living expenses. And nearly as many (29 percent) say they could cover living expenses for several months, but then would face difficulties.
Half of the survey participants polled say the impact of the loss would happen in a year or less.