Consumer awareness of bank-sold life insurance has improved, and much of this improvement can be credited to generations X and Y, according to a report from LIMRA. The periodic report, "Bank on It! Opportunities With Today's Bank Customer,” found the majority of generations X and Y would consider buying life insurance policy from their bank—significantly higher than members of the older baby boomer and silent generations, where only about a third of these consumers say they would consider it.
"Growing up in a post-Gramm-Leach-Bliley environment, the younger generations are open to receiving a broad spectrum of products and services from their bank," said Patrick Leary, AVP, LIMRA distribution research. "We also know these consumers are more likely to need life insurance than older generations. In addition, many of these younger consumers have no existing relationship with a life insurance agent or financial advisor so buying life insurance from their bank is not just another convenience — it provides an opportunity to get the financial protection these consumer really need."
The report also revealed that 7 in 10 consumers who said they would consider buying life insurance from a bank were interested in simple products. Even looking at more affluent or high-net-worth consumers, only one third would consider buying more complex life insurance policies from their bank.
"Recognizing the desire for simplicity, carriers have designed single premium, simplified issue solutions that leverage technology to meet more complex needs in a simplified way," according to Leary. This approach has worked well. Based on LIMRA's findings, much of banks' success with life insurance has been as a wealth transfer solution, selling single premium whole life and universal life.
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