P&C agents looking to supplement personal-lines income might be well positioned to broaden their books of business with individual life-insurance sales—but first they need to better understand what's stopping many people from buying the coverage in the first place.
Those P&C agents looking to enter or expand in the life-insurance market could gain insights into what they are up against by studying the results of a pair of surveys by Deloitte Research of 1,071 consumers with the coverage and 1,000 who are uninsured.
Specifically, the Deloitte surveys examine how respondents perceive the value of life insurance, where the coverage ranks among their other financial priorities, as well as their sales channel preferences. The surveys also identify some of the marketing challenges life sellers face in expanding their penetration among both the uninsured and underinsured.
The surveys focus on three distinct time perspectives: how respondents think about life insurance today, a look at their past purchase experiences, as well as a peek ahead into how (and how much) respondents intend to buy in the near term.
The results are summarized and analyzed in a report by Deloitte Research on "The Voice of the Life Insurance Consumer: What Makes Prospects Tick," with some of the highlights as follows:
• Current buyers more strongly understood the value and benefits life insurance traditionally offers than did those without coverage. Yet the surveys found plenty of opportunity to further educate even existing policyholders, as half or fewer of those with coverage don't associate their policy with certain common needs that can be filled by life-insurance products.
• While life insurance is not the top financial priority for most, the coverage is very prominent on the to-do list for many respondents. The survey found that a significant number of consumers intend to buy a new policy in the next two years, both among those currently without insurance as well as among respondents looking for additional coverage beyond what they already have.
• The surveys revealed a fundamental failure to communicate, as many of those who are currently uninsured noted that a prime reason they don't have coverage is no one has asked them to buy it. Even those with insurance open to buying additional coverage often say they have not received offers from their agents or carriers.
• However, most of those who have received solicitations to buy a policy said those pitches ended up not influencing their purchase decision. So they are either not hearing from life-insurance sellers, or the sales message they are receiving is not persuasive.
• At the same time, the surveys indicate that carriers cannot afford to wait for prospects to seek them out, as many respondents said they don't shop for life insurance on their own initiative.
• A generation gap was uncovered in a number of responses, including the fact that the youngest consumers were much more likely than older buyers to find the application and underwriting process to be too onerous.
• Financial triggers are very significant in the life-insurance purchase decision (such as getting a raise, thereby easing affordability concerns), and so are familiar life events (to provide income replacement and asset protection after getting married, having children or buying a home).
• However, because many respondents are either not aware of or don't understand the broader roles and benefits of various types of life insurance beyond merely providing death benefits, they don't necessarily think of the product as a more comprehensive, longer-term financial-planning solution—for example, how certain kinds of life insurance can help them fund their retirement or college expenses for their children.
Life insurers and their agents have some serious macroeconomic hurdles to overcome as they look to increase sales and bolster profitability, with life insurance for many taking a back seat to other financial priorities as families deal with unemployment, a severe drop in the value of their homes or other pocketbook challenges.
However, from these surveys it is clear that life insurance is very much on the minds of many consumers—both those respondents without coverage as well as those who already have a policy.
Regardless of the state of the economy, life insurance fulfills a variety of financial needs, but it must be more effectively marketed to make sure both the uninsured and underinsured populations understand all that a life-insurance policy can offer them.
A marketing campaign focused on educating the general population (perhaps even a joint, industry-wide initiative) might be called for since the survey showed that many respondents—even those who already have the coverage—do not fully appreciate the potential benefits versus the likely cost of life insurance. Such information-based outreach efforts could help spur greater penetration, higher market share and organic growth for carriers and agents alike.
Far from being a mature market, there is a large uninsured and underinsured population to target if the right products, marketing messages and delivery systems can be devised and implemented to bring these prospects into the fold. In some cases, all you might need to do is ask.
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