The amount clients think they would be paying for insurance beggars belief – and that could benefit advisors.
It’s a case of good news, bad news for advisors as new research suggests just how astronomical consumers think the cost of life insurance is.
A new LIMRA study finds that 80 per cent of consumers misjudge the price for term life insurance, with millennials overestimating the cost by 213 per cent, and Gen Xers overestimating the cost by 119 per cent.
“We’ve consistently seen over the last five years that consumers think life insurance is more expensive than it really is, and now we’re seeing many are also confused as to what factors determine the cost for life insurance,” said Marvin Feldman, President and CEO of Life Happens.
But consumers’ ignorance offers advisors an opportunity to win them over when they point out just how cheap insurance can be.
“We need to help educate the public about how affordable life insurance can be and the factors they can control to ensure they get the best and most comprehensive protection possible,” said Feldman.
While most consumers have a moderate understanding on how age and health factors can affect the cost of life insurance, many are unaware of other factors that can impact how much they pay for life insurance.
“Only about a third of consumers knew that their credit histories and driving records could affect how much they pay for life insurance, and less than half realized their hobbies and lifestyle could impact the cost of their life insurance policy,” said Todd A. Silverhart, corporate vice president and director LIMRA Insurance Research.
“In addition to believing life insurance is too expensive, our research has shown that consumers are intimidated by the process of buying life insurance — 4 in 10 don’t know how much they need or what to buy. Having a better understanding about the factors that influence pricing might help consumers feel more confident and encourage them to pursue getting coverage they believe they need.”
A new LIMRA study finds that 80 per cent of consumers misjudge the price for term life insurance, with millennials overestimating the cost by 213 per cent, and Gen Xers overestimating the cost by 119 per cent.
“We’ve consistently seen over the last five years that consumers think life insurance is more expensive than it really is, and now we’re seeing many are also confused as to what factors determine the cost for life insurance,” said Marvin Feldman, President and CEO of Life Happens.
But consumers’ ignorance offers advisors an opportunity to win them over when they point out just how cheap insurance can be.
“We need to help educate the public about how affordable life insurance can be and the factors they can control to ensure they get the best and most comprehensive protection possible,” said Feldman.
While most consumers have a moderate understanding on how age and health factors can affect the cost of life insurance, many are unaware of other factors that can impact how much they pay for life insurance.
“Only about a third of consumers knew that their credit histories and driving records could affect how much they pay for life insurance, and less than half realized their hobbies and lifestyle could impact the cost of their life insurance policy,” said Todd A. Silverhart, corporate vice president and director LIMRA Insurance Research.
“In addition to believing life insurance is too expensive, our research has shown that consumers are intimidated by the process of buying life insurance — 4 in 10 don’t know how much they need or what to buy. Having a better understanding about the factors that influence pricing might help consumers feel more confident and encourage them to pursue getting coverage they believe they need.”
