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Life Insurance Perceptions Study: Key Findings

We’ve already blogged about the challenges life insurance marketers will face this year, and how these insurers can effectively reach untouched consumer segments (e.g. low to middle markets) and adapt to changing consumer bases.

Since then, FGI surveyed over 1,500 consumers about their perceptions of life insurance (LI) coverage. From this data, we discovered consumer attitudes towards purchasing LI and found common patterns among those who do and don’t choose coverage. Below is an overview of some key findings.

Education and marriage

Of the 1,151 people (71%) who indicated that they do carry life insurance, most tend to have higher levels of education (a four-year college degree or higher) and are married than the 475 (29%) who are uninsured.

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College graduates have higher employment rates than those who have attained less than a bachelor’s degree. This increased financial stability, paired with a husband or wife to lessen the individual economic burden of life insurance, helps explain this trend among those with coverage. 

Major barriers to purchase

For the 475 respondents remaining uninsured (29%), many cited expenses and cost as a major barrier to purchasing life insurance. These expenses included mortgage/rent and employment situations. Others felt purchasing LI as unnecessary for the time being.

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Economic trends of the past 2 years—namely instability and lack of growth that lead to higher levels of unemployment—help explain these attitudes. People directly affected by the slowed economy are uncertain about spending their limited income on an expense like life insurance. Other financial burdens, like student loans, mortgages, and credit card debt, remain at the forefront.

Click Now to Get in Touch With FGI's Life Insurance Market Research Practice

Furture purchase likelihood

Of those currently uninsured, 51% felt as though life insurance was not necessary in the future, especially when household income is greater than $75,000.

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This attitude likely results from younger consumers’ lack of knowledge about life insurance, how it ties into overall future financial plans, and the benefits it offers.

Additionally, a lack of trust in financial institutions and their agents to fulfill their promises and give objective advice contributes to the overall feeling that life insurance is simply not a necessity, according to Deloitte’s 2013 Life Insurance and Annuity Industry Outlook.

How age comes into it

Finally, age is a major factor in likelihood of purchase. Of those respondents who indicated they will not purchase life insurance in the future who belong to Generation Y (which consists of adults ages 18 to 34), 50% said they do not see the value in life insurance. On the other hand, the Silent Generation (ages 77 and up) and Baby Boomers (ages 56 to 76) have made other plans to secure their future, such as a 401K, IRA or CD, for example.

With those likely to purchase life insurance, the differences in attitudes between generations is apparent as well. Generation X and Y feel it is an important part of future planning, but not so much as Baby Boomers. At 74% Baby Boomers describe life insurance as a necessary expense.

There is one thing all generations appear to agree upon, however: they don’t think LI is affordable yet at this point in their lives.

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Overall, insurers must be aware of the many factors that influence attitudes towards life insurance coverage, including the state of the economy, marital status, education, and differing generational beliefs.

Whether it’s showing members of Generation Y the inherent value and benefits of LI or gaining consumer trust, understanding the above trends will help insurers succeed in the current market.

Click Now to Get in Touch With FGI's Life Insurance Market Research Practice

Dino Fire
Dino Fire
Dino Fire

Dino serves as President of Market Research and Analytics. Dino seeks the answers to questions and predictions of consumer behavior. Previously, Dino served as Chief Science Officer at FGI Research and Analytics. He is our version of Curious George; constantly seeking a different perspective on a business opportunity — new product design, needs-based segmentation. If you can write an algorithm for it, Dino will become engaged. Dino spent almost a decade at Arbitron/Nielsen in his formative years. Dino holds a BA from Kent State and an MS from Northwestern. Dino seems to have a passion for all numeric expressions.