Life insurance ownership falls 9% in past decade

[Insurance Forums Staff]

Insurance Forums Staff submitted a new article

Life insurance ownership falls 9% in past decade

2020 Insurance Barometer Study from Life Happens and LIMRA reveals a significant decline in life insurance ownership over the past 10 years.

Continue reading the Original Article.

 

[marindependent]

"One thing that deters consumers is their perceived cost of life insurance. Since the study began, consumers have consistently overestimated the cost of life insurance. " I wonder why that is?

 

[InsuranceVeteran]

The industry defines "ownership" as those who have universal or whole life insurance. They further refer define those who have term at "renting" insurance, both are meant as sales manipulators to get buyers to purchase more expensive life insurance which is more financially rewarding to the insurance agent. However as people get more sophisticated and they further go online and research, they know that buying term and investing the different is a significantly better way to go.

 

[Allen Trent]

The industry defines "ownership" as those who have universal or whole life insurance. They further refer define those who have term at "renting" insurance, both are meant as sales manipulators to get buyers to purchase more expensive life insurance which is more financially rewarding to the insurance agent. However as people get more sophisticated and they further go online and research, they know that buying term and investing the different is a significantly better way to go.

Yeah, that is not what LIMRA counts in surveys as life products

 

[Allen Trent]

Biggest reason is there is massively fewer agents selling life insurance as a primary or somewhat main focus. Captive life only carriers have far fewer agents & most have gravitated to investments.

Main cause is very few consumers are ever directly contacted by an agent in a manner they can recall. Online & direct from carrier has not made up for agents like has occurred slightly more in the auto insurance market

 

[RichMcK]

Reduced life insurance ownership is a direct result of the decline of insurance agents and the ageing of these agents. The problem rests on the shoulders of insurance companies. The more agents marketing life insurance, more will be sold. An agent field force is vital and vibrant to the profitability of insurance carriers. It also produces wealth for the agents and their families.

 

[marindependent]

I think its probably a complex reason:

• Less Agents Selling Life Insurance Products
• Longer Longevity of Consumers
• Decline in Birth Rate (and hence a need for Life Insurance)
• And potentially changes in Consumers appetites for Life Insurance Products

There are probably other reasons as well.