A prime reason many uninsured individuals don't have insurance coverage is that no carrier has invited them to purchase their products, according to a Deloitte survey of life insurance buyers. Even insured individuals who are open to buying additional coverage often say that they have not been solicited by carriers.
"From our survey it is clear that life insurance is very much on the minds of many consumers," said Rebecca C. Amoroso, Vice Chairman and U.S. Insurance Leader for Deloitte LLP, who was the survey's executive sponsor.
Adds Amoroso, "A significant percentage of respondents have simply not been offered coverage recently; many also noted that they never shop for coverage on their own initiative. Not soliciting their business exacerbates this gap between insurers' interests and consumers' needs."
The survey – "The Voice of the Life Insurance Consumer" – was conducted to provide life insurers with insights into how people perceived the value of life insurance, including where coverage ranked among their other financial priorities, as well how consumers preferred to be reached. The survey covered buyers and non-buyers' related beliefs, motivations, influences, priorities and preferences.
Deloitte also identified some of the marketing challenges life insurers face in expanding their penetration among the uninsured and underinsured. "A significant number of respondents frankly don't know if they need more insurance – or if they do, they don't know how much they might need to buy," said Sam Friedman, Insurance Leader for Deloitte Research, who led the project. "Still others say they want life insurance but cannot afford it – leaving open the question as to whether these cost-conscious prospects might in fact purchase a policy if they realized what the price and value for coverage might actually be."
"Even current buyers did not overwhelmingly recognize many of the financial needs life insurance can fulfill, such as a source of cash in retirement, a way to save money for financial emergencies, or to help finance a child's college education," Friedman said.
Those who are insured more strongly identified with the value and benefits of life insurance than did those without coverage; yet even half or fewer of those with coverage do not associate their policy with all of the benefits that it can provide.
• 33 percent of respondents said they did not have coverage because no one had offered to sell them a policy.
• While life insurance is not the top financial priority for most, 45 percent of non-buyer respondents and 70 percent among those who have life insurance included it among their top five financial priorities.
• A significant number of the insured and uninsured intend to buy new or additional insurance in the next two years.
• Older prospects are harder to persuade with solicitations than younger consumers.
• The youngest respondents found the application and underwriting process to be much more onerous than was the case among older consumers.
• Financial triggers and familiar life events are very significant in the life insurance purchase decision. Yet because many respondents are either not aware of or don't understand the broader roles and benefits of permanent life insurance, they don't necessarily think of the product as a more comprehensive, longer-term financial planning solution.
"Regardless of the state of the economy, life insurance continues to serve certain vital financial needs. From this survey it is clear that insurance companies can grow their business by customizing and expanding their educational outreach and marketing to consumers, based on their current insurance status, age and other key factors," concluded Amoroso.
About Deloitte's Insurance Group?Deloitte's insurance group is comprised of more than 2,000 professionals, including seasoned insurance executives and former regulators, and serves many of the world's premier insurance, reinsurance and brokerage firms. The group and its leaders are the recipient of many awards, including the Reactions Global Awards Best Consultancy Firm in 2010 and 2011.