Direct Sales of Life Insurance Growing

The Internet is becoming a more viable sales channel for life insurers, a new study from LIMRA reveals.
The findings, released by the nonprofit LIFE Foundation and LIMRA as part of the organizations’ “The 2011 Insurance Barometer Study,” revealed that 26 percent of the adults surveyed now prefer to purchase life insurance direct via the Internet, mail or over the phone. While 64 percent of consumers still prefer to buy life insurance from an insurance or financial professional, that number is down from 1996; 80 percent preferred to buy the product face-to-face.
“Obviously, the Internet has fundamentally changed consumers’ buying practices over the past 15 years,” said Marvin Feldman, president and CEO of the LIFE Foundation. “Recognizing the growing consumer interest to use the Internet to conduct research and buy life insurance, life insurance companies and agents have developed and implemented innovative strategies to engage and serve consumers through their websites and social media platforms that are more convenient for the customer.”
Not surprisingly, younger consumers showed the most interest in purchasing life insurance through the Internet.  Among those ages 25-44, a prime group for purchasing life insurance, 31 percent said they would prefer to buy direct, with three in four citing the Internet as their preferred means of direct buying.
The study also found that consumers generally view life insurance as a necessity, with 86 percent agreeing that most people need life insurance. However, the figure drops to 70 percent when people are asked if they personally need life insurance. Only 63 percent of individuals surveyed say they own some sort of life insurance, which is similar to other recent research conducted by LIMRA in 2010.
“Life insurance has never been as easy or inexpensive to buy, yet millions of Americans continue to put off making a purchase that they, by their own admission, say is an important one,” noted Feldman.