Sorry, brokers. Banks may have a better opportunity to score life insurance sales.
The majority of Generations X and Y consumers say they'd consider buying a life insurance policy from their bank—significantly higher than older generations, where only about a third of these consumers say they would consider it, according to a LIMRA report.
"Growing up in a post-Graham-Leach-Bliley environment, the younger generations are open to receiving a broad spectrum of products and services from their bank," says Patrick Leary, assistant vice president, LIMRA distribution research. "We also know these consumers are more likely to need life insurance than older generations. In addition, many of these younger consumers have no existing relationship with a life insurance agent or financial advisor so buying life insurance from their bank is not just another convenience — it provides an opportunity to get the financial protection these consumer really need."
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Awareness of bank-sold life insurance has reached 54 percent; 44 percent of all consumers would consider buying life insurance from a bank.
They survey also revealed simplicity works: 7 in 10 consumers who said they would consider buying life insurance from a bank were interested in simple products. Even looking at more affluent or high-net-worth consumers, only one third would consider buying more complex life insurance policies from their bank.
Based on LIMRA's findings, much of banks' success with life insurance has been as a wealth transfer solution, selling single premium whole life and universal life.
"These findings offer a great opportunity for banks wishing to sell more life insurance," Leary says. "Traditionally, banks have focused on selling single premium permanent life insurance products for the purposes of wealth transfer—something banks should absolutely continue doing. Our research suggests if banks expand their energy on selling term and other basic protection products broadly to their customers, they would have more success."
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