Like the old saying that a journey of a thousand miles begins with a single step, so too does the decision to buy life insurance.
A LIMRA study Shopping for Life Insurance: The Uneasy Path to a Decision surveyed more than 5,800 consumers who seriously shopped for life insurance within the past two years and looked at the different steps they took. Among all shoppers, talking with family and friends was the most popular first step. Researching online and talking with a professional closely followed as first steps. When looking at those who actually bought life insurance or those who tried to buy a policy, meeting with a professional was more likely their first step.
Surprisingly, two of the most popular steps by shoppers, talking with family/friends and researching life insurance on-line, can actually slow down a decision to buy. Shoppers who are on-the-fence or still searching are more likely to confer with family and friends than those who have made a decision. These shoppers may eventually buy, but the decision takes more time. With online research, many consumers go online to better understand life insurance, but too much information can confuse shoppers, causing them to feel stuck. Forty-three percent of those who are still shopping sought information online as did 36 percent of consumers who are still on-the-fence. Both rates are higher compared to those who eventually bought or tried to buy (only 21 percent).
The study found that one third of all shoppers met with a financial professional at some point in their search. Forty-three percent of consumers who bought or tried to buy life insurance met with a professional at some point in the process.
No matter what point the meeting with a professional takes place, 56 percent of shoppers who do so become buyers (or attempt to buy) compared to 38 percent of those who do not meet face-to-face. Meeting with a professional is the last step taken by just over a quarter of all shoppers, which suggests that this step often leads to a decision.
Whether the decision results in a purchase or not, the consumer benefits from an efficient and conclusive process. It's now up to the industry to implement options to allow consumers not wishing to meet in-person to better reach a similar decision point.