More consumers in the US than ever before have purchased individual life insurance policies directly – rather than from a financial professional – according to a study by US-headquartered insurance association, LIMRA.
The study found that 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%.
Jim Scanlon, senior director of LIMRA Insurance Research, said: “Direct marketing through mail, phone, radio and television each acquired a share of the market when they were introduced. All those methods still hold a share of the market, and now powerful online marketing capabilities are taking a share of the market. So the effect is cumulative. As consumers and businesses become more comfortable with technology, we can expect to see that market share grow.”
Term Life Insurance now outpacing permanent
Separately, the study found that among households that own individual life there has been an increase in the number owning both permanent and term coverage.
The study shows a record high of 30% of life insurance owners having both policies, an increase of 12% in six years.
While the average number of life insurance policies people own remains two, there has been a shift in the type of products owned,” said Scanlon.
“Today, Americans are more likely to own one permanent life insurance policy and one term life insurance policy rather than two permanent policies.”
The study showed that for the first time in its history, conducted periodically since 1960, life insurance owners are now more likely to own term life insurance products than permanent life insurance (68% vs 62%).
Permanent life insurance ownership has decreased by 18% since 1992, while term life ownership has increased by 26%.
This report was based off a sample is 4,167 households. The survey was completed in 2016 and was weighted to the US household population by age, income, race and region.