Every year, new life insurance statistics get published as the life insurance industry evaluates how it is evolving into the future. This is especially important in determining how its effectiveness has changed, both with individual consumers and companies alike, and it allows us to see through facts, figures and statistics exactly what has improved, and what has not.
2016 Life Insurance Statistics: The Tech Year Expands
If you recall from last year’s statistics, the focus was on the paradigm shift throughout the life insurance industry, mostly through the introduction of technology used by both consumers and producers. This year presents itself as a deepening involvement in tech. Where the focus used to be on just computers, tablets, and even phones…
But now we can add wearables to the equation!
What is a wearable?
A wearable is a piece of technology which has been integrated with commonplace jewelry, clothing or other accessories already worn on the body.
Several years back, we were restricted to buying our life insurance directly from an agent or the insurance carrier, and this is staggering considering we now purchase from the comfort of home and can have insurance coverage in force in minutes while we surf the web on our phone or watch our SmartTV.
Consumers can now compare every life insurance company in seconds, apply online and over the phone, and get covered right away, though this isn’t without aid from the life insurance carriers who are most engaging this new pathway of connecting themselves to new clients. This also impacts the new digital selling age for life insurance agents, as they can no longer depend on antiquated means of selling life insurance.
The third group, consumers, have finally entered the equation of hands on use of technology, where they can attach a wearable to themselves to prove to the insurance company just how healthy or active they are–and this can lower premiums.
But is fun technology truly a way for life insurance companies and consumers to meet on common grounds for a product which has been a traditionally, well, hated product by most?
We’ll let the numbers speak for themselves.
Consumer Sentiment: Better or Worse?
Generally speaking, people are more likely to recommend buying life insurance than any other year in which the study was conducted. This hosts a positive outlook for expansion throughout the industry, as a whole.
- Last year, 55% of Americans would recommend life insurance to someone else, where this year showcased 66%, an increase of 11%.
This is most definitely good news, as life insurance has always had a stigma surrounding it. Yet, what is the cause for the raise in awareness and progressive sharing of thoughts about such a poorly regarded financial product?
Maybe it’s the new guys on the block.
- When considering younger demographics, exclusively, as much as 77% would be happy to recommend life insurance to friends and family.
In the super social Millennial crowd, is having a conversation about life insurance becoming easier, or do they truly understand the value in the product itself? Is the technology age finally breaching the young families who likely need life insurance more than any other age group?
It’s likely not that simple.
- 86% of all those surveyed mentioned they would agree that most people would require some amount of life insurance coverage.
There was no distinguished segment of the surveyed crowd who didn’t, in some way, show an unapologetic understanding of the necessity in owning life insurance (though, you’d be surprised how many still don’t carry it).
Of course, while we know these numbers seem positive, actual buying patterns are the most true tell to whether or not consumers truly mean it.
But maybe there’s innovation, like wearable technology, which is seriously allowing insurance companies to integrate themselves at the forefront of a consumers interest. Check this out:
- 33% of the Millennial age group and 27% of the aggregate group of Americans surveyed said they would experiment with biotech over a longer period of time.
When considering the financial side of things, it’s even more popular.
- Nearly 1/3 of Americans would consider adorning some type of activity tracker or biotech accessory in order to save on their premiums, and this number is over 50% when speaking direct to the Millennials. In addition, nearly two thirds of people who are already actively using this tech would use it for insurance purposes.
It’s becoming more and more clear that the driver in positive outlook is the younger generation, the Millennials and Gen X’ers, who are practically born in the age of technology. For them, this is just another gadget, but perhaps the tie to financial benefits and discounts is making it much more appealing.
Maybe the life insurance companies of old have finally started to crack the mold. Perhaps the meshing of biotech and insurance is the future, after all.
Life By The Numbers
With all this increased awareness and optimism, where do we really stand, though? Is it just hype?
Maybe not. Since the inception of the annual study, numbers are as high as ever.
- 3 in 5 people own some type of life insurance, and another 34% report a likelihood of making a purchase within the coming year.
Again, this is very likely to be directly tied to the younger generations, but this is still good news. The young buyers are one of the faster growing segments of the population, and, if kept the same, would provide an excellent example to aging children, who tend to take the financial habits of their parents more consistently not.
Perhaps somewhat enlightening, there is still a persistence among the crowd to resist the new buying behaviors.
- 51% of consumers would still choose to meet with someone in person before making a purchase.
Based on previous studies, this is a relatively odd-man-out as the purely online purchasing group was expected to surpass the face-to-face preference this year. Just as the Millennials and Gen X’ers have begun to flip the industry into a new direction, many assumed the strictly digital behavior would increase.
But, perhaps that’s not the case at all.
There is still plenty of room for insurance companies to make it more seamless for consumers to make the purchase where their questions can be answered in a timely fashion, which was precisely the reason cited for consumers still considering an insurance advisor.
There are other possible hurdles, too.
- Still, 66% of American consumers cited as being concerned with a comfortable retirement, which was the highest concern of all.
The tight squeeze on pensions over the past few years, losses in IRA’s and 401(k)’s, and other retirement reform takes precedence over life insurance, despite the direct relationship where a retirement plan could be compromised for a surviving spouse should an untimely death occur.
In fact, life insurance isn’t even second or third on the list. It’s further down.
- Tied for second, the next major worries for Americans are long term care costs and long term medical expenses, where 58% show concern.
With a largely busted health care system and extreme hikes in costs of healthcare for all ages, life insurance just doesn’t beg the attention as much as the others. But, leave it up to the life insurance companies once again to attempt to instill themselves in the wake of the technological and financial future.
Enter, the “combo” products. For the first time, the study implemented a set of structured questions about long term care, should it be dually implemented within a life insurance policy.
- 40% of Millennials showed some level of interest in a life/LTC combination policy, and 25% of all consumers said they would be interested in such insurance products.
This would have to be one of the more surprising statistics revealed from the study, as the young generation is the most removed from a long term care situation. But, maybe the idea of having to pay for their parents’ situation, should it arise, makes it more real than ever.
Hands down, the focus is now on the younger generations. With a chance to infiltrate a massive demographic, insurance companies are moving the needle by injecting themselves into very unfamiliar territory to make their mark. By encapsulating the attention of those who are interested in technology, namely through wearables and instant products, insurance companies may be, for the first time, truly stepping up to the plate to meet consumer expectations.
In its sixth year now, the 2016 Insurance Barometer Study was once again conducted in partnership with Life Happens and Limra. There were 2,074 participants surveyed, all between the ages of 18 and 75. All accumulated data was adjusted to reflect the general United States population, where it was weighted by race, gender, age, income level and education level. After a propensity scoring adjustment, the estimated error is 3%.