The State of Life Insurance Ownership in 2019

The State of Life Insurance Ownership in 2019

Who Owns Life Insurance?

According to, 57% of Americans own life insurance today. And since 2011, that’s been pretty stable. 

Life insurance, by definition, is “a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured. The insurance company promises a death benefit in consideration of the payment of premium by the insured.” (Investopedia, 2019)

Basically, life insurance provides financial peace or reassurance to your loved ones in the event of your death.

There are two general types of life insurance: term and whole (permanent). Term life insurance is just as it sounds: coverage for a specified term, like 20 or 30 years, for example. Whole life insurance covers you for life and builds up a cash value for the insured.

As you know, both serve their purpose for your clients. As an agent, you help your clients identify which (or even what combination of both) will be best for them throughout their life. 

With this in mind, let’s look at the reasons why people buy life insurance so you can best navigate those conversations as your clients’ lives continue to change and evolve.

Why People Buy Life Insurance

The obvious reason people buy life insurance: financial peace of mind for their loved ones. 

They want to know that, in the event of their death, their family or other loved ones don’t have to worry about paying for their funeral expenses, debts, or other expenses.

But, with only 57% of Americans owning life insurance, we can see a large percentage of people actually don’t buy life insurance. Why?

Bestow, a life and health insurance agency originating in Texas, put together a survey to dive into this.

Here’s a snippet of what they found:

Reasons Why Americans Don't Have Life Insurance - Bestow

From this, they then asked what would make respondents more likely to purchase life insurance? Most (74%) said a more affordable price.

Which would make you likely to buy life insurance? - Bestow

Further, they asked what life event specifically would entice respondents to buy a life insurance policy. And, fitting with the response above, most said if they attained a certain income level, they would purchase.

What life event would trigger you to purchase life insurance? - Bestow

So while people are motivated to buy life insurance by life events like having children, they want to be at a certain income level before making the purchase.

Finally, Bestow identified the 3 main reasons Americans don’t have life insurance:

  1. They can’t afford it (58% said they can’t afford it)
  2. They want more options (43% said having to work with an agent has contributed to their not having a life insurance policy)
  3. They’re uninformed (35% don’t understand the benefits of life insurance, and 24% don’t know their policy options or how to purchase)

So, keep these in mind when talking with prospects or clients!

Shopping Behavior for Life Insurance

Since people have a hard time understanding why they need life insurance and are restricted by income, education is key.

Deloitte conducted in-depth research on buyer behavior for life insurance, and this image is especially helpful to visualize the buyer journey.

Life insurance buyer cycle - Deloitte

Your prospects’ awareness might (or probably will) come from being exposed to carrier marketing/advertising. They will then do their own online research of carriers and/or local agencies to actually work with when they decide they’re close to purchase.

This is the point where your service is CRUCIAL and will be the deciding factor on whether they work with you or find another agency. After purchase, clients prefer to manage their policy digitally. Upon renewal, your service is again crucial to keep your client. 

There are plenty of places here to insert yourself as an agency. In the Customer Awareness stage, promote your educational resources via email and social media to reach prospects. 

Not sure what educational resources you should be providing? Identify the questions prospects are asking! 

For those who are researching life insurance and considering purchase, they’re asking Google things like:

  • What is life insurance?
  • What is term life insurance?
  • How much life insurance do I need?
  • How does life insurance work?

Questions buyers ask about life insurance - Wordtracker

By taking thorough notes during your prospect/client meetings and using tools like Wordtracker or Google Keyword Planner, you’re able to monitor the questions people are asking about life insurance and be proactive and ready with your answers. Bottom line: Educate them on what life insurance is, its benefits, and the actual cost.

During the Purchasing Decision stage, utilizing life insurance needs assessment tools help tremendously during your prospect and client meetings. See our blog, Life Insurance Needs Assessment Resources for Insurance Agents, for a list of some great free resources.

Finally, Postpurchase Interactions are incredibly important for client retention. Make sure you have an effective client onboarding process in place. Check out this resource for building that: [Free PDF] 7 Steps to Onboarding a New Client.

Throughout the year, use AgencyBloc’s Automated Workflow, to ensure you maintain regular communication with your clients, whether it’s simply wishing them a Happy Birthday or being proactive about policy renewal communication.

To sum up, since people who don’t buy life insurance cite not understanding it and not being able to afford it as the reasons why, center your educational resources around those topics. Be ready with these resources and your expert advice to guide them on when it might be best for them to purchase based on their income level and life events.

Life Insurance Needs Assessment Resources for Insurance Agents

In this blog, we gathered some online resources for assessing the need for life insurance. Use these in tandem with what you already have to provide the best experience possible for your clients.

Check it out

Kelsey Rosauer

By Kelsey Rosauer on October 4, 2019 in Customer Experience

Kelsey is the Marketing Brand Specialist at AgencyBloc. She plans and creates educational resources to help our customers organize, automate & grow their insurance agency. Favorite quote: "I am convinced that life is 10% what happens to me and 90% how I react to it." —Charles R. Swindoll  More articles


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