More people would consider buying life insurance if they didn’t have to take a physical exam, according to the 2017 Insurance Barometer Study, jointly conducted by LIMRA in Arlington, Va. and Life Happens, a Windsor, Conn.-based educational nonprofit.
A majority (70 percent) of the 2,031 U.S. adults surveyed by the two groups say their likelihood of purchase would increase if carriers would conduct “simplified underwriting,” defined in the study as making use of publically available data for risk classification decisions for life insurance pricing, enabling purchase without requiring blood and fluids for medical testing.
The alternative process would not only be faster and easier, but would also provide greater transparency of risk and price, and would be unbiased because there would be no medical exams, a majority of the survey respondents say.
Other factors that are important to survey respondents when purchasing life insurance include having a product that was “easy to understand” (83 percent); having the “ability to chat with a person” (66 percent); and a “faster sign-up process” (51 percent).
“Our research shows increasing interest among consumers for speed, ease and transparency in the life insurance purchasing process, including an evolving trend to buy online,” Life Happens’ president and chief executive Marvin Feldman says in a press release.
Indeed, online life insurance purchase attempts have tripled since the Barometer's inception in 2011, and the percentage of completed online sales has increased by more than 15 percent in the past four years, according to Jim Scanlon, senior research director at LIMRA.
Moreover, 30 percent of survey respondents say they would be open to purchasing life insurance via a peer-to-peer (P2P) platform, if available.
“While P2P insurance platforms are still in their early stage, it's a trend on the horizon that's worth paying attention to,” Scanlon says. “Our research shows consumers value interacting with insurance companies in new ways such as simplified underwriting, P2P models and online sales. While the industry has been slow to adapt, we continue to see progress.”
Other survey findings include:
While 85 percent of respondents agree most people need life insurance, only 59 percent say they have life insurance.
Nearly 40 percent of respondents say they wish their spouse or partner had more life insurance coverage.
Only 60 percent of respondents say a single person with one or more young children needs coverage, versus 80 percent of respondents who said the same of a married person.