LIFE
Listen to a full Podcast where LIMRA talks with Jennifer L. Douglas about her latest report, Consumer Confidence in Life Insurance Companies bitly.com/limrastudy2012
The Good and Bad: What People Really Think About Life Insurance L IMRA research reveals some surprising demographic perceptions about life insurance. By Jennifer L. Douglas
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t is the moment that we all hope we never to have to face, yet it is also the time when the unquestionable value of what the life insurance industry provides shines through: filing a death claim for a loved one. This is the single greatest event where companies and producers will make a profound and lasting impression on the insured’s immediate family and, many times, on their broader circles of family and friends. In LIMRA’s recent study Consumer Confidence in Life Insurance Companies, a significant theme emerged. Among the consumer attributes explored, seeing the positive difference life insurance can make following the death of a loved one is one of the most compelling factors associated with confidence in the life insurance industry. Nearly half of consumers (45 percent) have seen or experienced this – and the closer they were to the experience, the more confidence they hold.
The Good and the Bad
Indiv idua ls w ith favorable claims experiences are also much more likely to agree with positive statements about the life insurance industry. For example, four in five consumers believe the life insurance industry plays a critical role following the death of a loved one. Among the remainder of this experienced group, most were undecided and only 4 percent disagreed. One area where there is notable disagreement is pricing, among those with positive statements. Having not seen the value of the coverage for themselves, forty-one percent of those with either no experience or a less than favorable experience suspect that life insurance products aren’t priced appropriately. This compares with 26 percent of those with a positive claims experience. Slightly fewer agree with the statement about transparency. It is interesting, though, that some consumers find carriers trustworthy despite questioning their 36
InsuranceNewsNet Magazine » February 2013
pricing and transparency. It would seem that trust would be all-encompassing. However, trusting that the company will pay at claims time is surely most important to consumers. Although not as significant as their propensity to agree with the positive statements, consumers who have seen life insurance make a difference are less likely to agree with negative statements about the life insurance industry. As with taxes and the weather, Americans just may enjoy complaining about the financial services industry. Only one or two out of 10 respondents disagree with these negative statements. At the same time, however, the industry has some champions. Consumers who have seen the positive benefits of life insurance are up to two times as likely to disagree with negative statements about life insurers as those without this experience.
Experience and Ownership
The impact of a positive experience is evident among both insureds and uninsureds. Further, the compounding effect of ownership and experience leaves 91 percent of this group expressing at least some confidence in the life insurance industry. Compare this with a 55 percent confidence rate among people who lack both coverage for themselves and exposure to such experiences. As the data also suggest, a favorable experience is an equally good, if not better, predictor of confidence than ownership alone. Owners are indeed more likely than non-owners to express confidence in insurers. But ownership and confidence are not interchangeable. In fact, life insurance owners as a whole do not agree with positive statements about the industry nearly as often as those with confidence or as those with a positive claims experience. The industry’s image has much room to improve among insureds and uninsureds alike.
Additional Differences
Other noteworthy relationships exist – including some that, again, are distinguished by whether the person has had a first-hand experience with the benefits of life insurance. In