An increase in consumers willing to recommend life insurance to others contributes to a more positive climate for the product, according to the 2016 Insurance Barometer Study.
The study, conducted jointly by not-for-profit research industry trade association LIMRA and the non-profit educational organization Life Happens, finds that nearly two-thirds (66 percent) of consumers say they are at least somewhat likely to recommend ownership of life insurance to others, an increase of 11 percentage points over last year. Nearly 9 in 10 consumers (86 percent) agree that most people need life insurance.
“We’re encouraged by Americans’ understanding of the need for life insurance and their openness to consider purchasing it,” said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens. “While not everyone who shows interest in life insurance ultimately buys it, increased awareness of the importance and benefits of a life insurance policy is a promising development.”
Broken out by demographics, 77 percent of millennials were likely to recommend owning life insurance, as were three quarters of those who own any type of life insurance.
For the first time, this year’s Barometer Study looks at the use of wearable activity trackers and smart scales by Americans. The findings show that 51 percent of millennials and 30 percent of people overall are very or extremely likely to consider wearing an activity tracker and share those results with a life insurance company in return for financial rewards for healthy behaviors; the number more than doubles (to 65 percent) when considering consumers who already use an activity tracker.
The results reveal that more than a quarter of Americans (27 percent) and a third of millennials (33 percent) cite the potential to build a long-term relationship with an insurance company as a reason to share biometric data from a wearable activity tracker.
“For those insurance companies willing to modernize the way they engage with customers, there is a great deal of potential to build long-term relationships,” said Todd Silverhart, corporate vice president and director LIMRA Insurance Research. “New technologies, such as wearable activity trackers and smart scales are not only able to help Americans live healthier lives, but can be the key to developing relationships between insurance companies and policy owners throughout their lives and into retirement.”
Having enough money for a comfortable retirement continues to be the top financial concern among most American consumers (66 percent). Next on the list are two related retirement concerns: paying for long-term care (58 percent) and medical expenses (58 percent).
Because of concerns about long-term care, the study also asked consumers about their interest in policies that combine life insurance and long-term care. When given a brief description of these combination products, a quarter of all consumers said they’d be very or extremely likely to choose one if they were purchasing life insurance. And 40 percent of millennials demonstrated interest in the product.
However, while two out of three Americans agree that most people need long-term care insurance, fewer than one in five actually own it, signaling a great opportunity for the life insurance industry to engage with more consumers.
Three out of five Americans (60 percent) report owning life insurance (individual and/or group). And more than a third of Americans (34 percent) said they are at least somewhat likely to purchase life insurance in the next year. These intentions are more positive than they have been over the past few years, thanks to more favorable attitudes from Generation X and millennials.
Even as people are finding many of their day-to-day activities can be accomplished online, a majority of people (51 percent) still prefer to purchase life insurance in person. And three out of four of them say a major reason they would prefer to meet with a financial advisor or agent in person is so they can ask questions and get immediate answers.
“The findings show that consumers recognize the need for insurance products to protect their financial security,” noted Feldman. “Even in this digital age, speaking to an advisor and getting their guidance is still very important to consumers.”
The 2016 Insurance Barometer Study was fielded in January 2016 using an online panel, which surveyed 2,074 U.S. adults age 18-75. The data were weighted by age, gender, education, race, region, and income to be representative of the general population. A propensity score adjustment was added to correct for biases inherent in Internet panels. The margin of error in this study is 3 percentage points.