While the benefits of life insurance are certainly well-documented and absolutely widely known, many American still manage to neglect it. In fact, astoundingly enough, more than 100,000,000 Americans have no life insurance protection.
Apparently, according to a recent study completed by LIMRA, most Americans claim their chief financial concern is whether or not they will be able to afford a comfortable retirement. However, how a man or woman can claim their retirement is comfortable without having purchased a life insurance policy seems curious, to say the least. One would think that a primary facet of retirement is ensuring the ones you care for are looked after in case you are no longer able to provide for them. What’s perhaps more amazing is that the aforementioned 100 million Americans make up the equivalent of 40% of the domestic adult population.
Just to look at the numbers, it has been largely reported that a full 50% of American households would immediately feel the financial impact within a year if their primary earner was incapacitated for one reason or another. Yet, even in spite of that remarkable fact, the majority of America’s adults also claim they would not be willing to spend money on a life insurance policy within the next year.
While this sounds nearly ridiculous, the truth is that the “perceived cost of annuities and life insurance policies” nearly halts all thoughts of purchasing a policy; especially when viewed in conjunction with things like mortgages and college tuition. That said, please note the term “perceived cost.” In that light, it is also true that eighty percent of American insurance consumers clearly overestimated the price of a standard 20-year term life insurance policy, by double.
While I’m sure it’s certainly a variety of factors that have fostered this misperception, I believe the strongest reason for such is likely that of a simple lack of understanding. Though many insurance campaigns are fine tuned for proper marketing, they often fail to articulate the nuances and subtleties of even the most simple of plans. While I understand this is generally a sacrifice in order to make the marketing content more appealing, I would also just like to posit that perhaps sharing some information, like a plan’s true cost, may bring in substantially more traffic.
However, this is not to say the public is entirely uneducated about the insurance industry despite the lack of tangible information in marketing efforts. Most consumers definitely understand that their age and health, for instance, influence the price of their the price of their policies, but so few realize that things like gender, occupation, driving, and even credit history also play a notable role in determining the monthly cost and premium. Yet, it also seems these same consumers who don’t understand the industry are also, to a degree, unwilling to learn it. In fact, a third of participants testified that they “do not trust life insurance agents and find the information they provide confusing,” which is naturally an enormous hindrance in the dissemination of proper information.
While I believe more effective marketing may be able to start rectifying this clear flaw in the insurance industry, I am unsure of how to comprehensively fix the issue. How are consumers supposed to learn the significance of life insurance if they are unwilling to listen to someone who understands the industry? Perhaps through sincerity, accessible education, and a resilient spirit, we will be better equipped to change this unfortunate trend in the insurance industry.
