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A new LIMRA study found that 6 in 10 Americans would prefer to pay a flat fee when buying life insurance.  About one quarter of Americans indicated they have no preference on how the financial professional is paid and 14 percent said they would prefer to have the financial professional paid through a commission (% of purchase).

When it comes to advice, Americans are more likely to want to pay a flat fee up front rather than pay an hourly rate, an annual percentage of assets under management, or through commissions.

But how much are Americans willing to pay?

The survey found that the median one-time fee Americans are willing to pay for advice about financial risks and insurance needs is $75; 7 in 10 would only spend $100 or less. Consumers are willing to pay slightly more for a comprehensive analysis of their financial situation with a median one-time fee of $100, yet 62 percent of said they wouldn’t pay more than $100.

“In today’s world, most Americans are solely responsible for their financial security. Having a solid understanding about their finances, including their risks and needs, seems critical,” said Jennifer Douglas, research director, LIMRA Developmental and Strategic Research. “Prior LIMRA research shows that one of the top reasons people don’t buy life insurance they say they need is because they don’t know what to buy or how much they need.  The fact that the majority of Americans are unwilling to pay a realistic amount to get professional advice is troubling.”

The study found 8 in 10 Americans would want to know in advance how the advisor is getting paid for working with them.  This is true for those who already work with an advisor and those who don’t.  That said, 84 percent of Americans who work with a financial professional believe their advisor provides excellent value for the costs associated with his or her services and believe their advisor puts their interests first.