I always have been interested in consumers’ perceptions, attitudes and financial concerns — you know, how they think and act when making buying decisions. How can we learn these things about consumers, and why would it matter?
What would it mean to our business if we could predict what problems our prospects are most interested in solving, how they make their buying decisions, where they prefer to make these purchases, and why they make the investment in their lives and the lives of their families?
The 2017 LIMRA, Life Happens Insurance Barometer Study might provide us some insights. I have been using their annual survey since the first one came out in 2011. They begin with a broad overview, then drill down into some specific consumer buying behaviors. Each year, I get something different out of the report and find I can incorporate some of the nuggets of insight into my marketing plan, business model and vision to grow my business.
I thought I would share some insight that jumped out to me.
One issue we often hear about is “the most common financial concern is the ability to afford a comfortable retirement.” This is particularly interesting given all the news coverage about tax cuts, health care, state tax deductions, jobs, homeownership and other socioeconomic issues that have a direct impact on people’s perception of the quality of retirement they must look forward to — or not.
I found one conclusion they made in the survey to be of particular interest, given what I hear from my peers about this topic.
You know how you get a lead, marketing piece or inquiry about one topic (product), and you can develop tunnel vision to the point where you talk to the prospect about only that particular product? Well, a conclusion they made on this topic opens an ancillary issue that we might start including in the client conversation.
More Room for Life Insurance
The conclusion was “Estate/legacy concerns and health care concerns have decreased, suggesting there is more room for life insurance in the minds of consumers.” Did you get that? Consumers’ concern about estate/legacy and health care matters has decreased, so life insurance may be something to discuss with prospects when talking about other concerns.
In this 2017 Insurance Barometer Study were some buying behaviors we might pay attention to, some behaviors that might be indicators of other products consumers have an interest in. Respondents of the survey indicated their other concerns include “long-term care, financial security of dependents, credit card debt and having a comfortable retirement.”
What this means to me is that maybe the initial qualification conversation (and it should be a conversation, not an interrogation) should center on the things that matter most to people. This is not just a list of what features a product has, but a conversation of what prospects are concerned about. You know, make sure you ask questions not to reply; instead, ask questions to “understand.”
Eight in 10 respondents say that a married person with one or more young children needs life insurance. How many of your prospects or clients have children, yet you never bring up life insurance for the kids because you are there on a particular “market” lead? If for no other reason than to protect their kids’ “insurability,” that’s reason enough to bring it up, isn’t it? In fact, the survey showed that “consumer demand for life insurance is greater than actual ownership.”
Moreover, the survey found that 70 percent of respondents say they need life insurance, yet only 59 percent own life insurance; 57 percent say they need long-term care insurance, but 14 percent own it. This is some valuable information when putting together your marketing plan, lead orders or income models.
Another finding in the survey was “life insurance owners are more interested in other financial products.” So if you are selling life insurance, but your message fails to include life event issues, you may limit your prospect pool.
For example, the survey found that consumers see life insurance as a way to save for retirement. This means that retirement is now one of the top five reasons for owning life insurance. Another interesting finding — and one that you may want to make part of your marketing language — is that 39 percent of respondents wish their spouses or partners had more life insurance.
Did you know that people recognize their own dependence on the primary wage earner? The survey found that “69 percent of respondents would have trouble paying living expenses in two years or less if they were to lose their primary wage earner.” What marketing message could you use that would uncover this “trouble”?
We often think that we are what matters to our prospects. Of course we matter, but maybe not as much as we think. The survey addressed this when it found “almost two-thirds of respondents report that buying from a well-known company is an important factor in the purchase process of life insurance.”
Selling Has Evolved
I hear all the time that selling has changed, that the “old” way of selling doesn’t work. I don’t agree at all. But I do agree that where and how we get in front of prospects have evolved. Are you evolving?
Another nugget from the survey found that consumers added another avenue to researching if not purchasing their solutions. The survey revealed that online purchases of life insurance have tripled since the barometer’s inception in 2011.
Another evolution in the sale of insurance product is the interest consumers have demonstrated in simplified underwritten plans. According to the report, “seven in 10 respondents indicate they would be likely to purchase life insurance priced by using data without a physical exam.”
So while consumers are evolving, I must ask the question: “Are we as an industry providing enough information to help consumers make informed and intelligent buying choices?” Maybe not, as one concerning finding was that “four in 10 millennials believe a term life policy costs more than $1,000 a year (which is more than five times the actual cost).”
Another helpful bit of information from the study showed that consumers “allocate their household budget across a number of competing financial priorities.”
From the first Barometer in 2011 to the most recent one six years later, we learn that the financial mindscape of American consumers contains a stable hierarchy of financial concerns.
Health coverage - When combined, concern over disability, long-term care and medical expenses consistently occupies the top tier of this hierarchy.
Saving goals - Concern over savings occupies the second tier, primarily due to concern over a comfortable retirement.
Living expenses - Everyday expenses occupy the third tier; the level of concern on these items is roughly equal to savings goals.
Life coverage - These concerns occupy the lowest tier, which implies they get the least amount of attention and share-of-wallet.
Now what does all this mean? What can you get out of the 2017 Insurance Barometer Study? I constantly talk about predictable buying behaviors. People talk from their frame of reference, and people hear from their frame of reference.
Is your message to the marketplace from your frame of reference or from the consumer’s frame of reference?