Monthly Archives: September 2012

Life Insurance a Hot Financial Planning Tool?

Piggy BankIs life insurance becoming a hot financial planning tool? According to new research from Northwestern Mutual, that seems to be the case. Americans are obtaining life insurance to help secure their financial future and are incorporating into their financial plans.

Because of marriages, growing families and a looming retirement, the flexibility that life insurance products offer are attractive to those who are seeking to maintain a peace of mind no matter what life may throw at them.

According to the research:

  • Twenty-three percent of Americans ages 18-34, are the most likely demographic to purchase life insurance because of a birth.
  • Thirty-six percent of Americans age 55 or older and 39 percent of 45 to 54-year-olds were prompted to buy life insurance because of a marriage.
  • Thirty-one percent of Americans age 55 and older bought it as part of their retirement plan, while 25 percent of 45 to 54-year-olds did the same.
  • Twenty-five percent states home ownership among Americans 45 to 54-year-olds.
  • Thirty-five 18 – 34-year-olds are significantly more likely than those ages 35-54 to have peace of mind as a result of knowing all their debts are paid.
  • Both 35 – 44 (34 percent) year olds and 45 – 54 (36 percent) years olds derive the greatest peace of mind knowing that their family will be provided for in the event of their unexpected death, and those aged 18-34 (68 percent) and 45-54 (58 percent) who have life insurance were significantly more likely to have been motivated to purchase life insurance in order to provide for their loved ones.

LIMRA report for Sept. 2012

Bad Economy SignThe shaky economy has left families scraping to survive. According to the latest LIMRA study, Americans are more concerned with paying their mortgage and bills than they were a year ago.  Here is some information that National Agents Alliance team members should find interesting and potentially helpful.

Identifying those at risk.

The numbers: Three in 10 households, roughly 35 million, are uninsured and half say they need more life insurance.

More than half of Gen X and Y homes, 30 million people, need MORE life insurance.

The middle market represents the largest segment of uninsured households, with 36 million – half – admitting they need more coverage.

Seven in 10 women agree that life insurance is a necessity and all people should have it – only 62 percent of males believe this to be true.

One-third of wives own no life insurance at all – despite the fact that seven in 10 homes are dual-income households, and nearly 30 percent of wives earn more than their spouse.

Why aren’t people buying?

The LIMRA study found the top two reasons people don’t buy life insurance are competing financial priorities or because they think they cannot afford coverage.

Another recent LIMRA study discovered that consumers overestimate the cost of life insurance by as much as 3 times the actual cost.

Shockingly, six in 10 consumers don’t recall being approached to buy life insurance in the last 24 months. Further, 35 percent of shoppers who met with an agent did not buy life insurance and said that the agent never followed up with them.

Another factor in play is the clients’ lack of knowledge about life insurance. This held people back from buying for the following reasons: 12 percent couldn’t decide what type was needed or how much to buy, 10 percent were afraid of making the wrong decision and eight percent did not know enough about life insurance.

What’s the motivation?

41 percent of potential clients said LIFE EVENTS – getting married, having a child or buying a home – prompted them to shop for life insurance.

One quarter of possible clients were looking for coverage because their financial advisor or agent initiated contact or suggested the need for life insurance.

25 percent of life insurance shoppers looked at buying coverage because they thought they might need more and wanted to review their coverage.

One in eight shoppers said a friend or family member recommended a sales rep or financial advisor, prompting them to shop for life insurance.

From window shopping to buying!

78 percent of shoppers with previous relationships with an agent bought life insurance – almost 10 percent higher than shoppers who had no prior relationship with their agent.

Providing a needs-based outlook for customers helps them see how insurance can work for them and their families. 75 percent of shoppers who received a needs-based analysis bought insurance, compared to less than half of those who didn’t have an analysis.

Agents should also recommend an amount to buy for their clients. LIMRA’s study found shoppers are more likely to buy insurance – and larger policies – after getting a recommendation from their agent.

Following up is critical for agents to provide coverage to clients. 35 percent of non-buying prospects said they were still shopping and agents never followed up with them. Additionally, a third more were still making a decision about life insurance.

Big Picture

Americans value life insurance. Eight in 10 consumers say they’ve had a positive experience with life insurance and add that the industry is critical should a loved one pass away. Nearly 67 percent of all Americans feel life insurance gives people peace of mind.

The top financial concern for half of consumers is having enough money to enjoy a comfortable retirement. Almost a third of consumers are most worried about paying their mortgage or rent – 31 percent are extremely or very concerned.

Myth vs Fact: September Celebrates Life Insurance Awareness Month

Life Insurance Awareness MonthSeptember marks Life Insurance Awareness Month, and National Agents Alliance wants to know what are you doing to create more awareness of the benefits of life insurance products?

Life Insurance Awareness Month is a great opportunity to inform consumers about the benefits of life insurance and dispel the myths.

In celebration of Life Insurance Awareness’ month, it’s time we separate the myths from the facts:

  • Myth: Life insurance is expensive.
  • Fact: Life insurance is much cheaper than widely believed. The 2012 Insurance Barometer Study revealed that 2,011 respondents between ages 18 and 75, estimated that annual coverage for a healthy 30-year-old was $400—a total of $250 more than the actual cost of life insurance.


  • Myth: Life insurance is a luxury, not a necessity.
  • Fact: Life insurance is as much as a necessity as health insurance. Should the main income provider or a parent die unexpectedly, that income would need to continue coming in so that the family can pay their bills and provide childcare.


  • Myth: You only need enough life insurance to cover burial expenses.
  • Fact: You not only need life insurance to cover any burial expenses, but you also need the continued income of the deceased person. If a stay-at-home parent dies unexpectedly, you’ll now need someone to care for the children, in which the average salary of a stay-at-home parent is about $75,000. You will also need to cover the bills for at least six months in order to help your family make it through the grieving process and make plans for their future income.


  • Myth: Life insurance is only something you need to think about as you reach retirement.
  • Fact: The earlier you begin thinking about purchasing life insurance the better. Death can occur at any moment, which is why now is the time to consider purchasing a policy. In addition, you can lock in lower premiums due to your age.


  • Myth: I’m single, with no children. I don’t need life insurance.
  • Fact: Just because you’re single with no dependents doesn’t mean you don’t need life insurance. Should you unexpectedly die who would cover your burial costs and pay off your debts? Don’t leave a burden on your family.

Don’t let the myths keep you from protecting your family and loved ones.  Life insurance can offer that peace of mind that no matter what happens, your family will be taken care of after you are gone.   And for the National Agents Alliance team members, be sure that your clients and potential clients are aware of these common myths, and their corresponding truths!

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