Life Insurance

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Part
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Life Insurance

Millennials (55%) are more likely to research life insurance online and then buy a plan from an advisor or agent compared to gen X (43%) and boomers (38%). The top triggers for getting life insurance include having children (62%), changes to the person's personal finance (54%), being a homeowner (54%), and interacting with a life insurance agent (54%). Additional insights and information on the life insurance purchase preferences, behavior, and journey have been added below.

Gender Differences

  • 82% of men have a good understanding of life insurance, while 74% of women have the same.
  • Only 28% of American employees have voluntary group life insurance with more males (32%) than females (25%).
  • In households with investable assets of more than $250 K, the following gender differences are observed:
    • 25% of household decision-makers aged between 30-39 are females, while 48% are men.
    • 30% of household decision-makers aged between 40-49 are females, while 70% are men.
    • 72% of household decision-makers aged between 50-59 are females, while 28% are men.
    • 25% of household decision-makers aged between 60-69 are females, while 75% are men.
    • 19% of household decision-makers aged between 70-75 are females, while 81% are men.
    • Women in these households are more inclined to seek financial advice. These women also tend to be "less confident and more risk-averse on investments."
    • Women in these holds are also less cost-sensitive than men.
  • The top five financial concerns for women include comfortable retirement (46%), disabling illness or injury (39%), medical expenses (38%), long term care services (35%), and monthly bills (30%). While men share almost the same concerns (same top four concerns), the percentage varies. Men's top financial concerns include comfortable retirement (39%), disabling illness or injury (29%), medical expenses (29%), long term care services (29%), and credit card debt (25%).
  • 79% of men that are married or in a long term domestic partnership and with a child under 18 have life insurance, while only 67% of women have the same.
  • In the same group surveyed above, "the amount of coverage through individual policies averaged $423,000 for men and $231,000 for women (a difference of $192,000)."
  • Men that did not have a life insurance coverage yet planned to get plans that average $355,000, while the coverage women planned to get averaged $175,000.

Income Differences

  • "Employees with annual household incomes between $75,000 and $99,999 are more likely than those with annual household incomes of less than $50,000 to have voluntary group life insurance through their employer (35% vs. 17%)."
  • The top five financial concerns for households with less than $50,000 annual income include comfortable retirement (46%), disabling injury or illness (41%), medical expenses (40%), long term care services (38%), and credit card debt (32%).
  • The top five financial concerns for households with household income between $50,000 and $99,999 include comfortable retirement (42%), disabling injury or illness (34%), medical expenses (32%), long term care services (32%), and credit card debt (28%).
  • The top five financial concerns for households with more than $100,000 include comfortable retirement (37%), medical expenses (23%), disabling illness or injury (22%), long term care services (22%), and credit card debt (22%).
  • "Of households with an annual income of $75,000 or more, 78 percent have life insurance policies, and in households with an annual income between $50,000 and $75,000, 74 percent have life insurance policies."

Age Differences

  • "29% of younger employees, ages 18 to 34, have voluntary group life insurance through their employer; the next-closest, at 28%, are ages 35 to 44 years old."
  • 65% of Americans aged 18 to 29 do not have life insurance. This figure stands at 29% among those aged 30-49 and 26% in the 50-64 bracket.
  • 71% of those aged between 18 to 29 who do not have life insurance say they do not have one because they think it is unnecessary as they are still young and healthy.

General Life Insurance Insights

Attractive Product Features

  • The health incentives and add-on features that are appealing when getting life insurance include:
    • critical illness feature: 66%
    • long-term care feature: 66%
    • having annual screening: 57%
    • share wellness data: 51%
    • taking health course: 49%

Channels Used to Get Life Insurance Quotes

  • 37% of those who purchased or were shopping to buy life insurance got their quotes from a financial professional (37%), followed by company websites (23%).
  • Another 19% got their quotes direct by phone, while 15% got their quotes from group/association websites.
  • 11% of those who purchased or were shopping to buy life insurance got their quotes got them direct by mail.

Channels Used to Purchase Life Insurance

  • 30% of life insurance purchases were done directly by phone, while 29% were purchased directly via mail.
  • Another 27% of life insurance policies were bought via finance professionals, while 19% purchased through the insurance company's website.
  • 20% of those who bought life insurance did so through group/association websites.

Type of Products Purchased

  • 71% of life insurance owners have a term life policy, while only 44% have a permanent life policy. 6% do not know which type of life product they have.
  • Breaking down the type of permanent life policies purchased, 32% have variable life, 30% have whole life, and 25% have universal life. 13% do not know the type of permanent life policy they hold.

Top Reasons for Purchasing Life Insurance

  • 37% of those who purchased life insurance did so as a sort of income replacement. This is followed by those who purchased life insurance policies to take care of their burial or funeral expenses (30%).
  • 28% bought life insurance for wealth transfer, while 27% did so to pay off their mortgage.
  • 21% bought life insurance for business purposes, while 19% did so to replace a previous policy.
  • Other reasons include tax-advantaged save or investment (17%), estate taxes (14%), funds for college education (14%), charitable gift (13%), and to supplement group coverage (8%).

Top Reasons for not Purchasing Life Insurance

  • 32% of respondents say that they have enough life insurance, and as such do not need any new life insurance package.
  • 22% believe they have other financial priorities, while 15% say they cannot afford life insurance.
  • 12% note that they prefer other financial products and 3% do not believe that life insurance policies are good products.

Online Sources Used by Life Insurance Shoppers

  • The life insurance company website is the most popular source amongst shoppers with 46% of respondents using this source for research purposes. This is followed by online aggregators (45%) and association websites (38%).
  • 31% say they use an online financial calculator during their research phase, while 30% used an agency website.
  • 22% visited a blog site during their research phase, while 20% used social media in their research. Only 15% used a financial website during their research.

Motivations for Getting Life Insurance

  • Having children (62%) is the top-most important life event that triggers people to consider getting life insurance, followed by changes to the person's personal finance (54%).
  • 54% also cite being a homeowner and interacting with a life insurance agent (54%) prompts them to consider buying life insurance.
  • For 53% of respondents, getting married prompts them to consider buying life insurance.
  • Other triggers include considering retirement (52%), death of a friend or relative (48%), and loss of company life insurance coverage.
  • According to Deloitte, "this consistently reactive nature of purchase suggests that most providers are doing an insufficient job demonstrating the importance of life insurance to consumers through marketing outreach."

How Consumers Found the Carriers they Use

  • An overwhelming majority (54%) of those who have life insurance chose a particular provider because of personal referrals, followed by those who called an agent (19%).
  • Another 9% inquired online, and only 7% responded to a marketing campaign.
  • Deloitte recommends that "carriers should aim to generate a sense of urgency and need for life insurance products, so any purchase is proactive instead of reacting to forces beyond provider control. This will also help prevent consumers from falling back on personal relationships to inform provider selection."

Millennials

Biggest financial concerns for millennials

  • The biggest financial concern for millennials is building a comfortable retirement (47%), followed by disabling illness or injury (42%), and medical expenses (40%).
  • Another 35% note that the financial state of the family when they die is a cause of financial concern, while 30% are concerned about their burial and funeral expenses.

Purchase Barriers to Life Insurance

  • 58% of millennials don't know how much or what type of life insurance to buy. This figure is 18 percent higher than the average of 40% across all generations.
  • 40% of millennials also reckon that they would not qualify for life insurance, which is an indication of the depth of knowledge that this cohort has on the subject matter. As such this generation requires more education first and foremost to bring them up-to-speed on life insurance.
  • 43% of millennials also note that no financial person has approached them to sign up for life insurance. According to the Insurance Barometer Study, "maybe millennials also need to be educated about the need and uses of life insurance for young people, which might contribute to their not proactively seeking out the help of professionals."
  • When it comes to financial reasons for not buying life insurance, 62% of millennials cite the cost of living expenses as a barrier (rent and mortgage), while 53% cite additional living expenses such as internet and cable subscriptions.
  • Other financial reasons cited by millennials include building savings and emergency funds (44%), debt (39%), saving for retirement (30%), health expenses (30%), and recreational activities (27%) such as eating out, movies, and shopping.
  • Additionally, 32% of millennials say saving or paying for a new car is the financial reason for not having life insurance, while 28% say they are saving or already paying their student loan debt. 20% of millennials are choosing vacation over life insurance.

Online Purchase Behavior

  • 55% of millennials would research life insurance online and then buy a plan from an advisor or agent. However, 28% indicated that they would research online and complete their life insurance purchase online.
  • Another 14% note that they would research online, but buy directly from the company either via phone or mail.
  • 4% say they would not use the internet in their life insurance buying journey at all.
  • 52% of millennials have visited the website of a life insurance provider and 54% have sought information about life insurance online.
  • 41% of this cohort also reported that they have bought or attempted to buy life insurance online.
  • 49% of millennials note that they have visited insurance comparison or quote websites after researching insurance somewhere else and "getting a good idea of what they wanted."
  • On the other hand, 15% of this cohort used insurance comparison or quote websites as their first port of research before researching elsewhere.
  • Another three percent only used insurance comparison or quote websites in their research. 33% of millennials have never used these platforms before.
  • 54% of millennials will likely ask their social media followers or friends to recommend agents or advisors and 57% are likely to check an agent or advisor's social media presence and activity. Also, 39% of millennials want to communicate with an agent through social media.

Important Factors When Choosing Life Insurance

  • The top three factors important to millennials when choosing life insurance are:
    • that the life insurance plan is easy to understand (79%)
    • the ability to chat with a live person (68%)
    • the ability to pick insurance type from categories (67%)

Gen X

Biggest financial concerns for millennials

  • The biggest financial concern for gen X is building a comfortable retirement (51%), followed by having disabling illness or injury (45%), and medical expenses (38%).
  • Another 36% are scared or concerned about their long-term care, while 31% are concerned about the financial state of their family when they die.
  • Additionally, only 28% are concerned about their burial or funeral expenses.

Purchase Barriers to Life Insurance

  • 39% of gen X don't know how much or what type of life insurance to buy. This figure is on par with the average of 40% across all generations.
  • Only 19% of gen X reckon that they would not qualify for life insurance. This is four percent lower than the average of 23% across all generations.
  • Also, 19% of gen X claim that no professional finance person has approached them to buy life insurance.
  • In terms of financial reasons, 69% of gen X cite the cost of living expenses as a barrier to getting life insurance. This is followed by additional living expenses (55%), and managing accumulated debt (50%) such as credit cards.
  • 37% of this cohort note that they putting money towards their savings account or emergency funds is one of the reasons for not owning life insurance.
  • Other financial reasons cited by gen X include saving for retirement (30%), health expenses (25%), day-today recreational activities (25%), saving or paying for things like a home, boat or a new car (22%), and paying student loans (20%).
  • Additionally, 14% of gen X are choosing vacation over life insurance.

Online Purchase Behavior

  • 43% of gen X would research life insurance online and then buy a plan from an advisor or agent. However, 32% indicated that they would research online and complete their life insurance purchase online.
  • Another 14% note that they would research online, but buy directly from the company either via phone or mail.
  • 11% of this cohort say they would not use the internet in their life insurance buying journey at all.
  • 52% of gen X have visited the website of a life insurance provider and 52% have sought information about life insurance online.
  • 33% of this cohort also reported that they have bought or attempted to buy life insurance online.
  • 20% of gen X note that they have visited insurance comparison or quote websites after researching insurance somewhere else and "getting a good idea of what they wanted."
  • On the other hand, 18% of this cohort used insurance comparison or quote websites as their first port of research before researching elsewhere.
  • Another seven percent only used insurance comparison or quote websites in their research. 55% of gen X have never used these platforms before.
  • 42% of gen X will likely ask their social media followers or friends to recommend agents or advisors and 44% are likely to check an agent or advisor's social media presence and activity. Additionally, 24% of gen X want to communicate with an agent through social media.

Important Factors When Choosing Life Insurance

  • The top three factors important to gen X when choosing life insurance are:
    • that the life insurance plan is easy to understand (80%)
    • the ability to pick insurance type from categories (65%)
    • the ability to chat with a live person (64%)

Baby Boomers

Biggest financial concerns for baby boomers

  • While baby boomers also have financial concerns, the percentage who list certain concerns pales in comparison to that of other generations. For example, only 34% of this generation are concerned about having a comfortable retirement, followed by having long-term care (31%) and medical expenses (28%)
  • Only 23% rate having a disabling illness or injury as a financial concern of theirs, while only 17% are perturbed about their burial or funeral expenses.
  • Of note, only 15% are concerned about the financial state of their family when they die.

Purchase Barriers to Life Insurance

  • Only 29% of boomers don't know much or what type of life insurance to buy. This is 11 percent lower than the average of 40% across all generations.
  • 16% of this cohort also believes that they would not qualify for life insurance. This is considerably lower than the average of 23% across all the generations.
  • Also, 12% of the boomer generation say that no professional finance person has approached them to sign up for life insurance.
  • In terms of financial reasons, most boomers (58%) cite the cost of living expenses as the reason they do not have life insurance. This is followed by additional living expenses (42%), and managing accumulated debt such as credit cards (37%).
  • 32% of this cohort cites health expenses as the reason they do not have life insurance, while 31% say saving for retirement is one of the financial reasons for not buying life insurance.
  • Other reasons cited by this cohort include building savings or emergency funds (30%), saving or paying for a new car, boat, or home (12%), day-to-day recreational activities (8%), and paying for student loans (7%).
  • Only 6% of boomers are choosing vacation over buying life insurance.

Online Purchase Behavior

  • 38% of boomers would research life insurance online and then buy a plan from an advisor or agent. However, 29% indicated that they would research online and complete their life insurance purchase online.
  • Another 12% note that they would research online, but buy directly from the company either via phone or mail.
  • A whopping 20% of this cohort say they would not use the internet in their life insurance buying journey at all.
  • 45% of boomers have visited the website of a life insurance provider and 37% have sought information about life insurance online.
  • 22% of this cohort also reported that they have bought or attempted to buy life insurance online.
  • 12% of boomers note that they have visited insurance comparison or quote websites after researching insurance somewhere else and "getting a good idea of what they wanted."
  • On the other hand, 11% of this cohort used insurance comparison or quote websites as their first port of research before researching elsewhere.
  • Another five percent only used insurance comparison or quote websites in their research. 72% of boomers have never used these platforms before.
  • 19% of boomers will likely ask their social media followers or friends to recommend agents or advisors and 26% are likely to check an agent or advisor's social media presence and activity. 9% of boomers want to communicate with an agent through social media.

Important Factors When Choosing Life Insurance

  • The top three factors important to boomers when choosing life insurance are:
    • that the life insurance plan is easy to understand (87%)
    • the ability to chat with a live person (66%)
    • the friendly conversational language used (65%)


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