By Juliette Fairley  Financial Planner

Uninsured individuals do not have insurance coverage because no one had offered to sell them a policy, according to a new survey that explored life insurance buyers and non-buyers’ beliefs, motivations, influences, priorities and preferences.

Deloitte’s “The Voice of the Life Insurance Consumer” study found that 62 percent of non-buyers had not received an unsolicited offer to buy life insurance in the past year compared to 44 percent of buyers. Another 30 percent said their employer does not offer life insurance as a benefit while 46 percent of buyers compared to 66 percent of those currently uninsured said they had not looked for life insurance on their own initiative.

“Many life insurers are not dealing directly with prospects,” Deloitte Research Insurance Leader Sam Friedman told Insurance Networking News. “Instead, insurers distribute their products through agents and financial planners. Part of the challenge facing carriers is how to work more proactively with their agency force to provide the tools, marketing and advertising support to better educate consumers about everything life insurance can do for them and their families and create more demand for their products and services.”

Older respondents who were current buyers found unsolicited offers to be less influential. About 70 percent of current buyers 50 years old and older—compared to 12 percent of those 26 years old and under—said such offers were not at all influential compared. The same age-related trend was evident with the uninsured sample as well.

“Among a variety of other steps, insurers are getting more involved in social media to highlight to a younger generation especially the importance of financial protection,” American Council of Life Insurers Spokesperson Jack Dolan told Insurance Networking News.

The Deloitte study found that the Internet was a vital information source for both buyers and non-buyers. About 32 percent of current buyers and 27 percent of non-buyers did a general Web search about life insurance, while another 21 percent of buyers and 16 percent of non-buyers had surfed specific insurer websites. In addition, 8 percent of buyers and 10 percent of non-buyers had surfed insurance agency websites.

“The Web and social media in particular can play a huge role in helping insurers distribute information to demystify life policies, educate prospects about all the financial needs life insurance can fulfill beyond simple death benefits and create awareness about the product’s affordability,” said Rebecca Amoroso, vice chairman and U.S. insurance leader for Deloitte and the survey’s executive sponsor.

About 26 percent of respondents found the application and underwriting process too difficult, according to Deloitte.

“The process could be discouraging many prospects from going through the application process because invasive medical tests may be required, such as blood and urine tests,” Deloitte’s Friedman said. “In many instances, insurers can make the process easier and faster by using predictive analytics, eliminating the need for invasive tests for many prospects and speeding up the sale without compromising the integrity of the underwriting process.”

While life insurance is not the top financial priority for most, Deloitte notes that consumers desire life insurance coverage.

About 45 percent of non-buyer respondents included life insurance among their top five financial priorities and 21 percent ranked it in their top three. Life insurance ranked even more prominently among those who already have life insurance with 70 percent putting life insurance among their top five priorities and 34 percent included it in their top three.

“Life insurers can proactively market a positive message either individually or perhaps as part of an industry-wide ad campaign showing how a policy can support a family or business in so many different ways in the short- and long-term,” Friedman said.

Among the non-buyers, 37 percent of those who had life insurance in the past said the workplace was a big source of sales with 43 percent automatically securing a policy through their employer and 20 percent buying additional benefits through their group plan. Only 16 percent had bought coverage on their own through an agent compared to 13 percent through a carrier. And 5 percent bought through a group or association.

“Life insurers could work more closely with employers to promote automatic and voluntary life benefit options since many of those surveyed prefer to buy coverage through their places of work,” Deloitte’s Amoroso said.

By GREG RISLING Associated Press

LOS ANGELES April 23, 2012 (AP)

MetLife Inc. will pay nearly $500 million in a settlement involving more than 30 states that claimed it didn’t provide life insurance benefits to some of its policyholders, the company said Monday.

The largest life insurer in the United States said it expects to pay about $188 million of the $478 million this year, and the remainder over the next 17 years.

State regulators investigated MetLife’s use of the Social Security Administration’s “Death Master” file, a database of people who have died.

California Controller John Chiang said a joint investigative hearing held last year revealed MetLife had information about the deaths of some of its life insurance policyholders but failed to pay what was owned.

“These settlements make it clear that if the industry isn’t willing to make the payments legally required, we will take action, including lawsuits, to compel them to do right by their customers,” Chiang said.

MetLife maintains it pays more than 99 percent of life insurance claims and it has been working with regulators to ensure everyone is paid.

“The company has been working with regulators to develop industry best practices and is pleased to announce new processes that will provide an even stronger safety net for the limited number of beneficiaries who do not submit a claim to the company in the normal course of business,” the company said in a statement.

MetLife has undertaken a variety of steps to locate policyholders who have lost contact with the company, including the creation of a website to help customers find their policies.

The agreement, which was reached last week, is expected to be worth a total of about $40 million for about 30,000 Californians, officials said.

It’s not immediately known how much the other 33 states will receive.

Among those included in the settlement are Florida, Illinois, North Dakota and Pennsylvania.

Chiang reached similar agreements with insurer John Hancock and Prudential Insurance last year both totaling more than $40 million.

Life Health Pro
by Robin S. Weinberger

Life settlements are sometimes viewed by financial services professionals as only a personal insurance or estate planning tool. As a result, policies that are business-owned or paid for frequently get overlooked as prospects for a life settlement. However, a change in business ownership, personnel or condition can cause a decreased need for life insurance and, consequently, the opportunity for a life settlement. Continue reading…

USInsurance Online

Nearly eight in 10 Americans polled noted they would like insurance professionals and other financial experts to inform their customers about a life settlement, according to the report. Continue reading…