When it comes to purchasing life insurance, consumers are engaging online and through social media platforms as a way to evaluate financial products and financial professionals.
The new study, conducted jointly by the non-profit educational organization Life Happens and not-for-profit research industry trade association LIMRA, highlights the fact that social media is a critical marketing tool for agents and advisors to be successful today.
The annual Insurance Barometer Study tracks consumer understanding and preferences when it comes to life insurance ownership, and uncovers common purchase barriers and misconceptions. In addition to focusing on life insurance, long-term care and disability insurance, the study also reveals how average consumers feel about their financial situation and outlook.
Consumers often ask social media contacts for recommendations on a variety of products and services, including financial services. Social media sites have become a common source for reviews and recommendations, as consumers seek peer-approved products and professionals. The study found more than a third of Americans (34%) —and more than half of Millennials—are likely to ask for recommendations for an insurance agent or financial advisor on social media.
Vetting professionals on social media
In addition to using social media as a way to source recommendations, consumers are also using these platforms to evaluate an insurance or financial professional they would like to work with. More than half of Millennials (54%) and 44% of Gen Xers are likely to check an agent’s or advisor’s social media presence on sites such as Facebook, Twitter and LinkedIn—a clear signal that a social media presence is quickly becoming a “must-have,” just like a website or email address.
Consumers use social media platforms to get a complete picture of an advisor to determine if they are a good source of information and a good fit personally.
“This year’s study reinforces the increasingly important role that social media has on an advisor’s marketing efforts,” said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens. “Advisors and agents must ensure their profiles are regularly updated and provide consumers with quality content and information.”
Online activity in the life insurance purchasing process
Beyond leveraging social media, 87% of consumers indicate that during the purchase process they would use the internet to research life insurance, regardless of how they purchase their policy. In their research, consumers visit the websites of life insurance companies and seek educational information online.
Almost half of respondents that had sought life insurance information or attempted to purchase life insurance online indicate they also used insurance comparison/quoting sites as part of the research process. Sixty-seven percent of Millennials use comparison/quoting websites as part of the life insurance purchase process, compared with 45% of Gen X and 28% of Boomers.
As consumers are increasingly interested in using professionals’ websites to educate themselves, it is critical for advisors and agents to keep these sites refreshed and current. Two-thirds of consumers would not do business with an advisor who has an out-of-date site.
A perfect balance: Importance of personal touch
While online resources are increasingly important to consumers, the majority still want personal contact with a professional when buying life insurance. Millennials are most likely to want to meet with a financial professional before purchasing life insurance (73%), compared with Gen X (64%) and Boomers (69%).
“This year’s study paints a clear picture of what consumers expect from the life insurance industry today,” said James Scanlon, director, LIMRA Market Research. “Financial professionals need to provide consumers with a more seamless experience, blending online resources, social platforms, with in-person consultation.”
Consumers want to take advantage of both personal networks and professional help, online research and in-person guidance. Agents and advisors must present an “always on” persona as consumers utilize a multi-channel approach to purchasing insurance.
Study Methodology: In January 2018, LIMRA and Life Happens engaged an online panel to survey adult consumers who are financial decision makers in their households. Responses were received from 2,082 individuals. The data were weighted by age, gender, education, race, region, and income to be representative of the general population. A propensity score adjustment was added to correct for biases inherent in Internet panels. The margin of error in this study is 3 percentage points.