Consumers who receive a financial needs analysis are more likely to buy life insurance, and purchase larger face amounts, than those who don’t receive an analysis, according to LIMRA’s 2011 U.S. Buyer-Nonbuyer study.
“What surprised us was that only 43% of consumers received a needs analysis from the sales rep they met with about buying life insurance. Our research shows that consumers who received a needs analysis were considerably more likely to buy than consumers who didn’t,” says Cheryl Retzloff, senior research director of LIMRA markets research. “Moreover, producers who recommended an amount to buy to their clients not only had more clients close the deal but on average those clients bought 60% more coverage.”
Life insurance shoppers who meet face-to-face with sales reps are the most likely to buy. In fact, if there was any face-to-face contact during the shopping process, more than seven in 10 bought.
Consumers who use only the Web while shopping and never meet with anyone are the least likely to buy after shopping — only 36% bought. Those consumers who started shopping on the Internet and then met with a sales rep were 1.5 times more likely to buy than those who only shopped online.
Respondents consider financial advisers, life insurance agents, brokers, and/or parents as the most useful sources of information to help with decisions about the purchase.
At least seven in 10 shoppers using these sources rate them as providing very useful information.
Although respondents feel that their advisers are trustworthy they could improve in some areas, the survey reveals.
Almost half of consumers say that after meeting with their adviser someone else in the household still needed life insurance. Many feel their producer didn’t consider whether the suggested policy was affordable to them and wanted help in determining how to fit the payments into their budgets.
Most troubling was the fact that 35% of shoppers say the producer should have followed up with them because they were still deciding on whether to buy.
“No doubt, producers play a critical role in whether a life insurance shopper actually buys a policy,” says Retzloff. “As an industry, we need to remember that buying life insurance is a big decision for consumers — one they make once or twice in their lifetimes. Our behavioral research indicates that consumers may need time to consider their decision and, as our study found, if we don’t follow-up with them, we may be leaving money on the table.”
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