Term Tops Perm for First Time in Latest Trends Study

[Brian Anderson]

The newest LIMRA Life Insurance Trends Study, released yesterday, showed that for the first time in the study’s 56-year history, U.S. life insurance owners are now more likely to own term life than permanent life (68% vs 62%). Permanent life insurance ownership has decreased by 18 points since 1992, while term life ownership has increased by 26 points.

The study also found that among households owning individual life there has been an increase in the number owning both permanent and term coverage. The new version shows a record high of 30% of life insurance owners having both types of policies – an increase of 12 points in six years.

Another item of note from the study was that more consumers than ever before are saying they have purchased individual life insurance policies directly from a carrier rather than from a financial professional. The direct purchasing of individual life insurance has increased by more than 25% in each of the last two study periods, with 2016 recording the highest proportion ever recorded in the study at 29%.

Insurance Forums | More Americans buying life insurance direct

 

[NinjaNic]

Our lead study of the last 100,000 leads generated thru our forms shows us some interesting things. 1. Term by a long shot. 2. Term by a LONNNG shot in the minds of the consumer.

Consumers running quotes on direct response websites:

40% run 10 year term
12% run 15 year term
26% run 20 year term
3.5% run 25 year term
13.5% run 30 year term
5.5% run Guaranteed UL

Average consumer directed quote is $336k.

Some very interesting correlations when you break it down even further by what the sexes are doing, and what the other demographics (ages, geography, device type) spell out.

Another interesting correlation: consumers are running term/GUL quotes at an average premium of $2139, while agents are running quotes in the average of $1493. WHY? Do agents feel like life insurance is less valuable than clients do?? Ponder.

 

[WinoBlues]

Our lead study of the last 100,000 leads generated thru our forms shows us some interesting things. 1. Term by a long shot. 2. Term by a LONNNG shot in the minds of the consumer.

Consumers running quotes on direct response websites:

40% run 10 year term
12% run 15 year term
26% run 20 year term
3.5% run 25 year term
13.5% run 30 year term
5.5% run Guaranteed UL

Average consumer directed quote is $336k.

Some very interesting correlations when you break it down even further by what the sexes are doing, and what the other demographics (ages, geography, device type) spell out.

Another interesting correlation: consumers are running term/GUL quotes at an average premium of $2139, while agents are running quotes in the average of $1493. WHY? Do agents feel like life insurance is less valuable than clients do?? Ponder.

What do they tend to buy?

Nice post Nic

 

[LGilmore]

Where has income gone during this time? People buy what they can afford. This shouldn't be a surprise to agents or insurance companies.

 

[Mattschmidt]

Where has income gone during this time? People buy what they can afford. This shouldn't be a surprise to agents or insurance companies.

They also buy what they think is the "proper" coverage because Suze Orman and Dave Ramsey say TErm is the best coverage.

When in reality, may not be the proper solution in the long run.

 

[LGilmore]

You run into a lot of insurance rationalization out there.

A person can't say they can't afford Whole life, so they find a way to bash the product.

I mean I am sure Katy Perry is a terrible person, because I know I will never get the chance to sleep with her....... I certainly would feel differently if I had to the means to sleep with her, because I would have a choice.

When a person doesn't have a choice, of course the product they can't afford is bad.

 

[jboussea]

I think Term insurance is more lucrative for the average insurance agent.. it's a lot less effort.. the mainstream media does the advertising for you... you don't have to persuade anyone to buy... and at the end of the day.. the number of insurance agents is going down.. Best thing about term is that they have to come back to buy more later on at a steeper price... their health might be worse. .more money for the insurance company and insurance agents

 

[DHK]

Actually, I believe it's probably due to the larger MLM companies - Primerica and WFG - who typically target lower to middle America. There are lots of these agents, and if they are all selling their 5 policies a year... they're probably doing a better job of selling term insurance than many of the other large career agencies.

I disagree with their philosophy and company culture of how they go about selling these policies (selling policies to people they recruit)... but you've got to admit that they do a good job of selling their (inferior) product.

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Remember that even a "bad policy" will still pay out a death benefit.

 

[toolbelt]

Actually, I believe it's probably due to the larger MLM companies - Primerica and WFG - who typically target lower to middle America. There are lots of these agents, and if they are all selling their 5 policies a year... they're probably doing a better job of selling term insurance than many of the other large career agencies.

Actually, the historical average is approx 2 1/2 policies (which may include the policy they themselves purchased). That figure is before any cancellations.