A recent survey says more consumers than ever are purchasing their individual life insurance policies directly rather than going through a financial professional, and the data reveals that direct purchasing of individual life insurance has rocketed up more than 25 percent in each of the last periods studied. During 2016, the data says consumers went direct to the source for their life insurance policies, and that represents the highest proportion ever recorded in the study at some 29 percent of total purchases.
“There are many factors that contribute to the increase in direct purchasing, but the overriding cause is the evolution of technology. Direct marketing through mail, phone, radio and television each acquired a share of the market when they were introduced. All those methods still hold a share of the market, and now powerful online marketing capabilities are taking a share of the market. As consumers and businesses become more comfortable with technology, we can expect to see that market share grow,” says Jim Scanlon, the senior director of LIMRA Insurance Research.
Term Life Insurance Now Outstrips Permanent in Total Sales
A separate study found that, among households that own individual life, there’s been an increase in the number of those households who own both permanent and term coverage. The study adds that 30 percent of life insurance owners have both policies, a record. That figure represents an increase of more than 12 points over the last six years.
“While the average number of life insurance policies people own remains two, there has been a shift in the type of products owned. Today, Americans are more likely to own one permanent life insurance policy and one term life insurance policy rather than two permanent policies,” Scanlon says.
One factor which might be a contributor to the trend is that term life insurance now offers more coverage for the dollar than a permanent life policy, and due to increases in the cost-of-living and higher amounts of household debt, consumers are focused on getting the coverage amounts at an affordable price.
Survey Says You’re More Likely Than Ever to Buy Your Insurance Directly
The study has been compiled periodically since 1960, and data showed that for the first time in its history life insurance owners are more likely to own term life insurance products – 68% -than permanent life insurance – 62%). Permanent life insurance ownership dropped by 18 points since 1992. Term life policy ownership jumped by 26 points over that same stretch of time.
Based on a sample of more than 4,100 households, the survey was completed in 2016. Results were weighted to the U.S. household population by income, race, age and region.